You (perhaps deliberately) miss the point. Assuming you have a family account, where do you draw the line?

No need for a family account, a single personal account works just fine for all the uses you've described - which is my point.

Let's try again.
"anyone within earshot" can be more than one person. In this case, more than one person in the same family. The case where two members of the family are sitting in the lounge listening together is pretty straightforward. Now if one person is listening in the lounge at home and another person is listening on the bus, streaming to their phone from the same source, how many licenses are needed?

ONE. Assuming they are all listening to the same thing at the same time no matter where they are, I don't care. If each person in each place wants to listen to something different, buy yer own account.

Sort of sums up the online debate about entertainment (not to sound too harsh).
But you offer consumers a super cheap, super convenient service, and they're still critical about the cost and any restrictions.
I still honestly feel no one will be happy until anything they want, is available at anytime, and for pennies.

Assuming they aren't listening to the same track at the same time:
Case 1: Buy 2 CDs, rip both to the home server.
Case 2: Buy 2 tracks from an online retailer, put them both on the home server.

Case 3. Buy my CD and let all your friends rip it.

We's in a world of hurt, boys.

then it sounds like they're not using spotify. sounds like you answered your own question, purchasing sounds like a better solution.

it's rare in my experience that in small circles of people they actually share a broad and similar taste in music - so even if someone has something, they probably a very limited of people they know who would even want a copy.

if on the other hand, anyone could get any music they wanted, instantly, online, for free (but illegally), and without consequence... that sounds like a world full of hurt doesn't it.

I'm positive you're right about the latter statement (though I don't necessarily hold the same implied negative value judgement on it: market-driven price competition is one of the defining elements of the theory of capitalism), but not so much about the former. Don raises a very reasonable question in my opinion, and without a tone of criticality; there's no harm in seeking clarification on the terms of any service or agreement. Many (most?) other online service agreements do explicitly mark that accounts are exclusively personal and that violations of this exclusivity are grounds for termination of service -- it's not at all surprising to me that Don would wonder whether Spotify's policy was similar. Looking through Spotify's End User License Agreement we potentially find the answer:
It would seem as though a Spotify account is intended to be used exclusively by the single licensee. Along the lines of initialsBB's remarks, there would appear to be an opening for a family-plan styled multi-license service.

Weirdly what I've seen is regardless of whether it is your style of music or not, people will copy it. I personally don't think people rip cd's or other content to listen/watch , I think we have become a nation of hoarders. Music, books, movies - it is all about the acquisition rather than the experience.

A Look at Digital Music Income Streams — Boomspot

I think it's both.
People will grab anything going free, just in case, whether they want it or not. People also look for a site that offers free product they do want.

yes, there's always an opening to devalue music further... I mean it's not like payment is optional or anything... why even attempt to create sustainable business models?

I've said for a while (and I still think this) that what is needed is a tax-like system, where your ISP account includes a 'content fee' which gets distributed through a royalty system. If you visit GS 10x a day, GS should get some small bit of money, a penny maybe. If you watch a movie online, that content owner gets a cut. I understand this is a complicated idea, implementation would be a challenge. But I don't see another way to really get a grasp on all of this. Ad-driven services like spotify (or subscription based, like Spotify-premium) have some potential, but as has been pointed out, they need to pay a much higher royalty, since they are replacing (in most cases) the purchase of music by a listener.

I like Spotify, just a couple of days ago, I listened to the single from Bob Mould's new album. I liked it, so I bought the album on iTunes, so I could listen on my (ancient) iPod. If streaming the whole album to an iPhone (which I don't have) were an option, I might not have bought it.

It's a very hard problem to solve. I go to the store with my boys (3 and 5) and they want to buy DVDs. If it's something that's on Netflix streaming, I say 'We can get that on netflix, let's buy something else.' But, of course, most of the shows they like are the ones they watch on netflix. So we end up buying episodes that haven't become available on netflix, of shows that are available on netflix (Curious George being a current favorite.)

I think netflix, spotify, etc, have great potential for opening up new markets for films, artists, etc. But there needs to be a percentage of that artist's content that isn't available for free. Or there needs to be a royalty that's high enough to provide a decent income to an artist with a good size, but still not mainstream audience.

Who knows the right path, but I don't think we're going to go back in time, so this needs to be resolved in a way that makes the future creation of music and film lucrative enough. Or we'll be entering the end of the creative economy, as someone around here put it.

the problem with the "tax" system is you have to be able to track consumption to fairly distribute the tax.

once you can track consumption you no longer need a tax and can charge on a metered consumption basis.

unfortunately the creative economy has been replaced by the exploitation economy. it's not that access to music is not getting paid for, it's that the wrong people are getting paid... observe...

http://thetrichordist.wordpress.com/...now-thy-enemy/

http://thetrichordist.wordpress.com/...rateandbarrel/

http://thetrichordist.wordpress.com/...ercial-target/

http://thetrichordist.wordpress.com/...in-rapidshare/