LONDON, Aug 5 (Reuters) – Spotify is enjoying a fairy-tale success as Europe’s hottest Internet start-up this year, thanks to music industry support and rapid adoption by avid listeners. The trouble is that the young company appears to have no special technology or business model that will help it compete in an online market where many consumers expect music to be free. The company, founded by two Swedes, combines some of the best features of other music discovery sites with the aim of taking on no less a rival than Apple Inc and its iTunes media store. It has certainly caught on — despite being on the market for only 10 months, the advertising-supported service has attracted 2 million users in the UK, Sweden and other European countries.
Unlike iTunes, which sells songs or videos by the download, Spotify is one of the many services that offer consumers streaming access over the Web to a more or less unlimited library of songs. In Britain, Spotify has rocketed to become the 10th most visited music site, up from 27th a few weeks ago, according to Web measurement firm Hitwise.