Spotify's fine, if, and it's a big if, you can guarantee you get a phone signal, and it's got data. I have an unlocked iPhone with a 3 SIM, which allows unlimited data.
Which would be fine if there was any sort of consistent network connection, let alone data; I barely get two bars of signal, and that can vanish every ten minutes or so, and that's at work and at home. I can only imagine those who advocate the use of a cloud-based system of music storage, or streaming for all their music, either never leave home, or have an astonishing amount of luck in always having a strong network-data connection, 'cos I never, ever get a signal that would allow the use of music streaming on 3, and O2 cap data at 1Gb/month, which is bloody useless.
And free wifi hotspots? They're a joke, most require having to register, then sign on every time you want to use it, if you can find one.
How do I manage my music? It's all ripped into iTunes, from the CD's I buy, or get free with magazines like Uncut, and formerly The Word, and the few I download. Then I use Remote on my phone or pad to select what I want to listen to via my A/V system, and I put selected stuff on my old iPhone, which I use as an iPod, or on my 160Gb Classic.
Which is pretty much full up now, so I'm looking at a LaCie 1Tb portable self-powered HDD with wifi, which allows music to be streamed to up to five devices via a dedicated Seagate app.
At around $200, that's a cheaper option than a new iPod, and means that I can carry far more music than any regular device is likely to have available internally for the foreseeable future, plus it's an extra backup.