Pretty much any person to write, talk, blog or Twitter about music streaming service Spotify has praised it to no end. In a world in which the term “iTunes killer” is tossed out without caution, Spotify is being hailed as a legitimate successor to Apple’s market-dominating player/store. Capturing some of that market share would depend on two things: (a) a great product and (b) the ability to generate revenue and be an ongoing concern. The former is a lot easier than the latter.

Brand Republic continues the praise but gets to the heart of the matter: Can it make money? Can it integrate advertising and keep its non-paying customers?

Opinions vary, but some feel Spotify has as good a chance as any to successfully merge advertising and streaming music. The head of technology at an interactive agency calls Spotify “the start of the future of audio advertising” and ads it is more targeted that radio advertising and allows for direct response ads for brands. An ad-supported version of Spotify inserts a one-minute audio ad every 30 minutes. An ad-free version costs £9.99 per month. (U.S. users cannot yet use the service.)

Spotify CEO Daniel Ek talked with The Telegraph just last week about what it offers to advertisers:

We can facilitate a number of other things for brand advertisers such as mood targeting. We can also target demographics more clearly than offline media channels. In light of a financial crisis, the focus should be on providing the ad industry with a value that they don’t currently get. Those services that can provide that value will survive and those that can’t will have a hard time.

Posted by: Amy Sikkes