Spotify just bought "music intelligence" company, The Echo Nest. In other words, it just bought the data machine that powers rival services like Rdio, iHeartRadio, Nokia MixRadio, Twitter Music and others.
The Echo Nest is a "music intelligence" company that uses a combination of machine listening and intense web scraping to build up the databases that power features like personalised radio. Many companies use their own data and proprietary systems, but a lot of them are pretty reliant on The Echo Nest.
So if you use a Spotify competitor "Powered By The Echo Nest" what can you expect? According to Spotify's Graham James:
The Echo Nest does work with direct competitors we will work with their team to understand these relationships and determine the next business steps. The bottom line is that The Echo Nest will meet all contractual obligations to all customers.
In other words, it's not totally clear what will happen after The Echo Nest's contracts with companies like Rdio are up — whether Spotify will pursue licensing or just pull the rug out. It's also important to remember that not every company The Echo Nest serves competes with Spotify.
Echo Nest data nerd and evangelist Paul Lamere took his personal blog to expound, saying (unsurprisingly), that The Echo Nest will only be stronger for the acquisition:
I am incredibly excited about becoming part of Spotify, especially because of what it means for The Echo Nest API. First, to be clear, The Echo Nest API isn't going to go away. We are committed to continuing to support our open API. Second, although we haven't sorted through all the details, you can imagine that there's a whole lot of data that Spotify has that we can potentially use to enhance our API. Perhaps the first visible change you'll see in The Echo Nest API as a result of our becoming part of Spotify is that we will be able to keep our view of the Spotify ID space in our Project Rosetta Stone ID mapping layer incredibly fresh. No more lag between when an item appears in Spotify and when its ID appears in The Echo Nest.
So Spotify will be better, and as long as you don't compete with Spotify, The Echo Nest will probably will get better too.
What is clear is that some big competitors like Sony Music Unlimited, Google Music and Beats Music are already operating largely independently of The Echo Nest. I've been told that while The Echo Nest is impressive, it doesn't take very long to replicate the product with their own user data.