The world of music licensing is complicated enough, let alone the world of streaming digital music. Royalties need to be sorted out and licensing agreements regarding streaming music rights need to be struck in every country in which Spotify operates. Advertisers need to get on board, too.
That’s why, although digital music is an immediate product with minimal overheads, it took years for Spotify to launch in the U.S.
When you first register and install Spotify, you need to agree to the terms before you can start using it. Spotify’s terms are updated every now and again (usually when new features are introduced), and when this happens, you have to accept any significant changes to the terms when you log into the updated software.
You can access the terms by clicking a link that appears on every Spotify page and, for the most part, the terms are written in normal language that mere mortals can understand. That’s great because you’re probably already busy enough and don’t want to be bogged down in legalese. You just want to start listening to the music.
Spotify operates in the following countries: Finland, France, the Netherlands, Norway, Spain, Sweden, the United Kingdom, and the United States. You can pay for Spotify only by using a credit card registered to one of these countries, which also must be the same country you’re in.
For example, European law requires Spotify to offer a cooling-off period for download bundles and subscriptions, which gives you the right to ask for a refund within a certain time period, provided you haven’t started using the services. And the U.S. version of Spotify doesn’t have a download store or the Spotify Open listening tier yet, so the U.S. terms don’t include those bits.
To get a look at the terms for your region, you can check out the end-user-agreement. (It should detect your location and direct you to the country-appropriate page.)
So, what do you need to know and agree to before signing up to Spotify? Spotify asks you to agree to the following restrictions:
Age: You need to be 18 years of age or older, or confirm that you’re 12 years of age or older (13 in the U.S.) and have parental or guardian consent.
Residence: You must live in one of the countries in which Spotify operates.
Accuracy: You need to enter correct registration information.
Noncommercial, personal use only: If you run a shop or cafe, and are playing Spotify for your customers, that’s considered a commercial use and isn’t permitted. And if you play Spotify in a school, that’s also not personal use.
Subscription tiers: The differences between the listening options available to your region are listed here.
Pricing: Spotify could change the prices at any time. But download bundles you’ve already bought are valid until their expiration date.
Basically, this section says that Spotify uses file-sharing technology to run its service. It makes use of your computer’s resources and Internet connection to exchange music between other Spotify users. Spotify stores recently listened to tracks in a folder (or cache) on your hard drive and uses your computer to help deliver this content to anyone else looking for it.
This setup is why Spotify is so fast and immediate: Your computer is fetching music from other users’ computers it finds nearby, and because one good turn deserves another, you are also helping deliver content to others.
The main mechanism it uses is a technology called peer-to-peer (P2P) sharing. File-sharers who use tools such as BitTorrent have been doing peer-to-peer sharing for years — this just a commercial, encrypted, and quality-controlled version of it.
Spotify's use of your data
No data Spotify collects and aggregates is ever personally identifiable. All major online companies, such as Google and Facebook, do this kind of data collection.
If you have one of those supermarket loyalty cards or do a lot of online shopping, companies can build up a picture of the kind of stuff your demographic is buying and could give this information to companies that want to know buying trends.
They also know what you’re into on a personal level and can recommend stuff to you. Spotify does this kind of thing, only for music.