Spotify is a free on demand music service, the only cost of which is the price of your monthly internet.  There’s a premium subscription service available that kicks up the bitrate, eliminates ads and allows mobile usage and offline play, but the base service itself can be had for free.

According to the NPD’s Russ Crupnick, who spoke at the Digital Music Forum East, said that users of on demand music services make 13 percent fewer download purchases.  Users of internet radio sites that provide a more random stream, like Pandora, purchase 41 percent more music digitally.

This could cause a bit of trouble for the service, though current speculation is that Spotify may create a subscription based system for all US users, much like the Zune Pass.