For lots of people, buying music on iTunes is second nature. For others, the program is little more than a repository for gigabyte upon gigabyte of pirated tunes. Excepting the once controversial 99 cents per song experiment, the iTunes Store has always more or less emulated the process of purchasing music that was established by brick and mortars decades ago: You can only listen to as many albums as you're willing to pay for. Under this system, the dividing line between those willing to buy music and those who had come to expect it for free remained in tact.
Programs like Rhapsody and Rdio established an alternative to the a la carte system by following the pay cable model: One flat fee per month for all the content your heart desires. But these players live in a web browser and don't play well with the music collection you already have stored on your hard drive.
Spotify, on one level, is exactly like iTunes or any other music manager. It lives on your computer or phone as a desktop or mobile app and easily organizes and plays your entire music collection. From an aesthetic viewpoint, it even looks like Apple's software.
But on another level, Spotify is the ultimate streaming service. In place of the iTunes Store is a massive catalog of 15 million legal songs instantly at your fingertips. You don't have to buy them, they're just there for you to play-- as many times as you want. And its seamless toggling between the music you own and the music that's in the cloud.
Spotify's mobile app recreates the same experience on your phone. Plus, with the premium version, you can store songs to be played offline in situations where you don't have a connection.