When users’ initial response to a new piece of software is a disbelieving ‘This is free?’, it’s worth installing. Although Spotify launched last year, it was invitation only until last month. Now everyone’s free to join, and they have been, with the millionth signing up in early March.

Spotify is a small application for Windows and Mac which allows you to stream music for free. The interface looks like iTunes and the streaming is instant – you can even pause using the spacebar. The sound quality is pretty good at around 160 kb/s and you can use it on more than one computer, meaning your playlists are stored with your account. In short, it’s akin to having every piece of music ever recorded in your iTunes music library. Unlike Last.fm, you can listen to whole albums without interruption. Unlike Limewire, it doesn’t fill your machine with treacle. Unlike torrent sites, there’s no tedious searching and waiting. There’s no DRM either, meaning Linux users join the party too.

What’s the catch? Well, there isn’t one. There are a few audio ads in the free version – if you can tolerate Zane Lowe regularly telling you how great Kings of Leon are, it’s a comically small price to pay. The ad-free version is £9.99 a month or £99 a year.

The content is terrifyingly comprehensive. Pretty much everything recorded by Bob Dylan, Kate Bush, Neil Young, Björk and New Order is there. Have a long hard think about that. Can, Alice Coltrane, Sigur Rós, Nico, The Phantom Band? All there.

So what’s not to like? There are a few absences, falling roughly into three categories: massive acts who opted out for now (Led Zeppelin, Beatles, Metallica, AC/DC, most Radiohead), smaller labels that haven’t signed up yet (no Fugazi) and some labels who are probably building their own version (Warp). The music licensing is country specific, so it won’t work abroad and it’s not available at all in the US. It differs from Last.fm in that there’s none of the social stuff such as messaging, friends or comments – no bad thing for some – and the Spotify radio station functionality is completely haywire. There’s also no sign of a mobile version or links to download music through the site, so no music on the move. However, despite it being a potential ‘iTunes killer’, there’s no reason why an iPhone application shouldn’t appear if Apple are comfortable enough with a Last.fm one.

The genius of Spotify is in how they approached the major labels. The majors know they now have to ‘compete with free’ and to them Spotify represents the first way to do that – Spotify see their competition as Piratebay.org and torrent sites rather than iTunes or Amazon mp3 store – and it enables monitoring who listens to what and in turn, targeted advertising.

Given the tiny royalty fee paid per track, something about this model is going to have to change – perhaps more ads or the removal of the free version. Until then, enjoy.

www.spotify.com