When Spotify entered the market it offered the classic music streaming services as any other player in the domain without charging listeners, gaining tremendous popularity on the European continent. Last year, the company decided to limit the number of free streaming to 20 per month and is now having over 1 million paid subscribers and plans to extend to the US. The company has not yet launched the service on the American continent just yet, but is preparing intensely by hiring staff for the New York office. In a blog post, Spotify CEO Daniel Ek explains thoroughly the changes that will take effect starting with today:

New Spotify users will be able to enjoy our unrivalled free service as it is today for the first 6 months.

As of May 1st, any user who signed up to the free service on or before November 1st 2010 will be able to play each track for free up to a total of 5 times. Users who signed up after the beginning of November will see these changes applied 6 months after the time they set up their Spotify account.

Additionally, total listening time for free users will be limited to 10 hours per month after the first 6 months. That’s equivalent to around 200 tracks or 20 albums.

It is curious how Spotify will attract the US listeners’ attention considering that it will no longer offer free services as it did in Europe; a major competitive advantage for a product that’s already developed a pre-launch presence in the States. Spotify is going through the same process many other free music streamers developed–freemium-to-subscription.  Popularity begets pressure from the music labels, all of which want more money for their music.

Our Editor Mark “Rizzn” Hopkins gripes at the early responses to Spotify’s move, which question the stability of free streaming music.  “Most of the analysis on this story is dead wrong. Bobbie Johnson at GigaOM said something like ad ‘supported music is a group hallucination we’ve been sharing.’ We’ve had ad supported music for more than a century. We call it radio. This is greed on the record labels’ parts.”

Let’s not forget that internet radio is becoming more and more popular. According to the Internet Radio Advertising & Impact Study from TargetSpot and Parks Associates, 49% of internet radio users spend 22 or more hours online per week, compared to 43% of non-internet radio users. Internet radio has now reached 39% of broadband households, and 86% of study respondents listen to both online-only internet radio and broadcast radio streamed on the internet.

Add to this the competitor scene, which is intensifying around music’s opportunities as a personal cloud service.  The major consumer cloud companies have all struck a move in recent weeks.  There’s the new Amazon Cloud Player, Google Music seems to be just around the corner, and Apple’s Ping reformation . Google for example is at the moment in the internal testing phase of Google Music and negotiating with leading music labels and music publishers the streaming of their products.