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So what? Radio is free. iTunes have free podcasts with or without ads.

This requires an internet connection and a computer. Not iPod / iTunes rival.

And for most listeners, it's free as long as they are willing to hear 20 seconds of ads between songs every half hour. Otherwise they can pay a subscription fee of $14 a month or a daily charge of $1.30.

Not sustainable as a business with that ad duration. Radio give much longer ad time. All subscription based music business fail because most users would actually pay more in the long term, paying every month FOREVER then just to buy their music.
 
I have been using Spotify for over a month now and I really like it. When I'm listening to music on my MacBook, it is now more frequently with Spotify than iTunes.
 
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