I Want My MP3

Any song, anywhere, anytime–all for less than $10 a month. that’s how the world should consume music, according to the folks behind services like Spotify, Rdio and Pandora, which collectively reach almost 100 million active users (up from just 45 million two years ago). Despite that breakneck growth, however, none of them are making any money. Spotify, for example, lost $78 million last year. The revenue from its paid users, who shell out as much as $120 a year to stream songs on their mobile devices, could not offset the licensing costs–fractions of cents per play, for artists–generated by users of its free, ad-supported service. Pandora, which is mostly ad-supported, faces similar struggles. “That’s the opposite of getting economies of scale,” warns Catherine Moore, a music-business professor at New York University.

Both market leaders are working hard to find profits–Spotify by capping listening hours on its free service and Pandora by upping its mobile ad plays. In the meantime, artists are griping (Pink Floyd has called some of Pandora’s actions “less than scrupulous”) and competitors are circling. Here’s how three new streaming-music services stack up, including the much anticipated iTunes Radio, which is expected to get a national rollout in September.

[This article contains a table. Please see hardcopy of magazine.]