Is Spotify the answer to the music collection?

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I've lately started using Spotify. So far it's the free subscription that I use at work. I wish there were more ads on it, though, based on the type of the music I listen to.

I have been wondering if I should get the premium subscription for $10/month to use on my phone as a portable music player.

It seems that now there is really no point in buying physical media or download music from online vendors.
 
Spotify.com

They have a huge library of music that you can listen to by building playlists, or you can select a "radio" of genres. With the premium version, you can have an app on your phone to play from their music or your local files on the phone.
 
Yeah, it's probably the answer to your music collection. The downloads are good quality (they use a high-quality codec at a reasonable bitrate, even on the mobile service), and they have a ton of music.

I'm been avoiding it, mainly because I feel the screw the small artists and labels. My dad was a musician, so I'm probably more sensitive to this issue than most. He was able to convince to do something (anything) else with my life, but the music business is a tough one for the folks actually making the music. Additionally, two of my neighbors are professional musicians and both gave me repeated earfuls about Spotify. In a funny twist, one of the guys is on Barsuk records, who fairly recently made their whole catalog available to Spotify. Obviously, they didn't consult this guy...

All that said, it just seems inevitable that this is where the business is going, and the service itself is awesome.
 
How does Spotify affect the artists? I thought it was the labels that took the lion's share of the profits - Spotify seems like a retail outlet for me like radio.
 
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