Will Spotify's American Debut Crush New York's Thumbplay?

All our favorite tech rumors are coming to a head. First Verizon announces an iPhone and now the streaming music service Spotify, a favorite in Europe, will be launching soon in the U.S., Mashable reports.

This is great news for the music fans who have been pining after Spotify for a year, but it could be trouble for New York’s Thumbplay. Thumbplay is a streaming music service that lets you stream from a library of eight million songs, make playlists and get song recommendations, similar to Florida-based Grooveshark. While Grooveshark is a Web-only application, Thumbplay and Spotify are both applications that you download for your desktop or mobile.

The crucial difference between Thumbplay and Spotify is that Spotify is an entirely freemium model (like Pandora) where users can listen to as much music as they want as long as they put up with ads. Thumbplay is launching as a subscription-based service (like Rhapsody) for which users must pay $9.99 a month.

The freemium proposition was the hangup in bringing Spotify to the U.S., according to Mashable.

Thumbplay was founded in 2004 and has collected $41.5 million from investors, according to Crunchbase. Thumbplay’s advantage on its home turf? Good relationships with labels. The company already has partnerships with Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Music, as well as CD Baby, INgrooves, IODA, The Orchard and dozens of additional independent labels.

ajeffries | @adrjeffries

Will Spotify's American Debut Crush New York's Thumbplay?