Spotify has made an acquisition, snatching up Echo Nest for an undisclosed amount. The company powers recommendations and playlists for a wide variety of media firms, including Spotify competitors like iHeartRadio, Beats Music, and Rdio. They also have a hand in more mainstream content suggestions, though Spotify doesn’t hint any many changes taking place.
For their part, Spotify claims the service will remain free to use, and open for noncommercial use. It can be licensed for those wishing to take advantage of the more robust features of Echo Nest, so it’s a revenue builder for Spotify.
Spotify CEO and Founder Daniel Ek said they’ve “been fans of Echo Nest for really long time”. The two companies have collaborated previously, with a visual playlist tool called MixShape. That service analyzed your music and created a playlist meant for “optimal flow” between songs. Essentially, it created a really nice playlist flow, and created a visual tool so you could “see” your music.
Though the API will remain free for noncommercial use, we have to wonder about the licensing. Will Spotify use it as leverage to muscle other players out with increased fees, or just take a piece of everything out there using their Echo Nest? Time will tell, but it seems as though Spotify is just creating a new revenue stream for themselves, and muscling those using your service out of the way is bad in that respect.