Today, during his keynote address at the SXSW festival in Austin, Texas, Spotify CEO Daniel Ek had a big revelation: "On certain days, we're consuming more Internet capacity than Sweden has as a country."
Ek made the statement when asked why Spotify chose to use a P2P model, rather than centrally store all of its music in one place and stream it from there. Ek noted that if they were to stream from one UK datacenter, they'd consume all the bandwidth. So instead, they leverage the power of the Internet to get their users to help them stream to other users.
Ek also said this was primarily the reason that Spotify is a native application, rather than a web app. P2P streaming is a bit more complicated than streaming from one source on the backend of things, obviously.
When asked why Apple (which of course, runs the largest music store in the world, iTunes) doesn't use the P2P method, Ek said that was the "million dollar question." He then speculated that they will move more towards Spotify in terms of being in the cloud (something we've written about a few times), and having a subscription model.
Ek noted that Spotify is now in six countries and has over 320,000 paid subscribers. That's up from 260,000 the last time they mentioned it. Overall, they have some 7 million users now. And yes, that's largely without the U.S. where the service only exists in a very limited closed beta as the company negotiates with the labels for music rights.