My original understanding of Spotify’s value proposition is that it’s great because of its unique freemium consumer pricing model. You can get all the bells & whistles for $10/mo, or some of the bells & whistles for $5/mo, or some of the bells & whistles plus banner and audio ads for $0/mo. This free option and freemium model is particularly enticing—companies like Napster and Rhapsody have been doing paid streaming services since at least 2005 when I was a sales floor rep at Best Buy, but you don’t see those guys making headlines. Spotify, on the other hand, has amassed something like 15 million users (4 paid, 11 ad-supported), and were recently valued around $3 billion.

And that all said: I don’t think the freemium desktop model is where the lion’s share of Spotify’s value lies.

First, for context: I’m a Spotify Free user. I put up with the ads. Repeat: I put up with them. I’m surprised at how irrelevant the ads are to me, considering how closely intertwined Spotify is with Facebook and how much they should know about my interests.

To be fair, Spotify needs to sell ads first before they can be relevant. Feels to me like 75% of the ads I listen to are just self-bumps from Spotify. These all essentially say “Hey! These ads are annoying! If you give us $10/month, then we won’t subject you to this very ad that you’re listening to!” (Which, reading between the lines, I think essentially says “We needed to fill space but didn’t sell anything here!”) Which seems silly and disingenuous. Worse, the majority of these ads will tout a 30-day free trial for Spotify Premium…which I’ve already exhausted. Even when I click through the ad, I can’t have another 30-day trial. That’s very frustrating.

The other 25% of the ads, these days, are from Harley Davidson. I guess one sales exec closed a huge sale, and now for some reason I (a 25-year old city-based grad student) am reminded every four songs to go out and buy a motorcycle.

Second, as to value: Everyone’s going mobile. Internet traffic through cell phones is up something like a bazillion percent (exaggeration). And nobody seems to have any idea how to monetize it. Ads don’t seem to work. Facebook spent a billion dollars on Instagram (not exaggeration), and neither phone app appears to have any advertising present. Zynga’s company value is plummeting.

I think Spotify can monetize free-for-consumers on mobile without doing ads. In fact, I think they’re planning on it.

There’s one overwhelming difference, in my mind, between Spotify’s desktop and mobile experiences: Apps. And what’s ironic, with the Apple and Android phones being so app-centric, is that it’s Spotify’s desktop platform—not its mobile version—which is app-rich.

I’m not sure how Spotify’s desktop apps are monetized currently. On the iPhone, I know Apple takes a clean 30% cut of all app proceeds…but my guess is Spotify’s current app library is completely free. Maybe when I listen to a playlist on the Pitchfork app, Spotify sends the appmaker a small fee. Not sure.

How would this work on a mobile phone?

Can Spotify have its advertisers curate (and pay for) playlists, which I can listen to or even temporarily download for free for a period of time?

Here’s the thing with radio- and stream-based phone apps: They require ubiquitous connectivity to the network. There’s a crisis here. Internet radio is okay because I can relatively easily ensure that my laptop will remain in range of an internet signal for the duration of my listening session. The entire point of listening On-The-Go through my phone is that I’m actually on the go, and invariably will be passing through an elevator or a subway train on the way. My connection dies, the music stops, broken experience.

Let’s say Pitchfork, or heck, even Harley Davidson, now let me download a playlist which I could listen to for a week. Instead of ads after every other song, build in liner notes. “We picked Dawes / ‘That Western Skyline’ because  it reminds us of being out on the open road; troubles in our wake but still front of mind. This next track…” Sort of like a radio host who can add a bit of color and personality. His bits are catered so that they’re both relevant to the sponsor and to the music, so that all of a sudden the ads aren’t an apologetic interruption to the listening experience.

Here’s the best part: In Spotify’s original model, the ads are implemented in a way that they feel like a detraction from the intended good. I’ve actually casually spoken with members of the Spotify team who’ve brought up this sentiment, and suggested that it makes selling ads and building for the free product especially difficult. In my model, the advertiser is intrinsically adding value, both providing tangential content and affording me the ability to do something I couldn’t have done without their participation. Detracting is bad, adding is good.

As a result: One less reason for someone to say “I don’t have Spotify,” and one step closer to Spotify taking over the world.