Except Spotify isn't for discovery and virality. What your talking about is getting people to discover music. Usually done through blogs, social media, youtube. But when your talking about a service like spotify which is really a one dimensional store for storing, putting music on your mobile device that doesn't drive merch sales or concert tickets or even fans then they should be paying there fair share to artists. Granted maybe with FB open graph integration this is changing. And of course this isn't just a Spotify problem this is a label problem (of course now they're one and the same). Anyways the question isn't whether giving your music away for free or not is a good idea -- The question is why isn't Spotify doing what they say there are there to do?... Pay artists.
I disagree - I've been using Spotify for a couple of years to discover new music. The 'Related artists' panel, and then the 'Top Hits' easily lets you find similar bands/musicians and sample their most popular songs.
I'd prefer someone to discover a song of mine of Youtube, or read about me in a blog or a Twitter post, and spend the day streaming everything I've done - come to my show and singalong. Looking at listings for my local venue, I'll regularly spend the preceding days / week listening to who's coming to play before I go and see them live.
I'm aware my views differ from some, but we're in an age where you can pirate an album in 30 seconds. Those that are going to steal it, will. Similarly, those that want to pay, will. Until you have enough loyal fans/generic TV/radio coverage to buy your single on iTunes, why not just let them hear it wherever and ask them to donate or buy a t-shirt or vinyl?
Answering the question as to why Spotify isn't paying artists - the system may not be perfect at the minute, but it's certainly pushing the boundaries much better (and more legally) than anything previously. Which is a great, great thing, IMO.
