Spotify, a new music streaming service currently in invitation-only beta, announced today its launch and the involvement of all four major music groups as well as Merlin and The Orchard (press release). The service is launching first in the UK, Germany, France, Italy, Spain, Finland, Norway and Sweden. Spotify has offices in the UK and Sweden.

Advertisers on board for the launch are Ford, T-Mobile and Xbox.

Since US users are not allowed, all I have seen is this screen shot, this explanatory screen shot, this screen shot and this concept video.

Spotify is positioning itself as a replacement for downloads and ownership of music files. That is, I believe, a long-term view that ignores today's technical limitations of streaming any music any time, anywhere. And it ignores the risk the user puts in assuming a company will always be a going concern -- MP3 files still play after the seller goes out of business. Spotify does not even allow for download purchases as do MySpace Music, Pandora and last.fm. In the short term, a service such as Spotify can definitely act as a compliment to downloading and, at the very least, target the growing market for online streaming services.

The company was wise enough to recognize the different segments within the streaming market. Its business model has three levels: free, ad-supported; a day pass; and a paid, ad-free premium service (which will cost £10 per month or £100 per year in the UK). The service allows for sharing and playlist creation, and it creates radio stations based on artist similarities.

On its website, Spotify woos ISPs seeking a legal alternative for their customers. "Offer Spotify Premium to your customers," it says, "to create differentiation and value-adding services, with increased ARPU and reduced churn as a result." The company also singles out hardware manufacturers ("mobile phones, connected TVs, set-top boxes, ADSL modems etc") as potential partners.