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Google Music has location-based recommendations. Not sure why Spotify couldn't incorporate something similar.

Does location matter when dealing with music taste? Just because I'm in Nashville doesn't necessarily mean I love country music?

Music you listen to at the park may be different from the music you listen to while programming at work, for example. So yes.

It's more contextual to the user. Music suggestions for when you are at the office. Music suggestions for when you're at home etc...