Swedish music streaming service Spotify recorded an 80% increase in revenues, reaching €173 in 2015 and claimed it had 89m active users, more than 28m of whom subscribed to its paying services. However, despite doubling its advertising revenue, Spotify still reported a loss of €1.95bnm, partly attributed to the heavy costs associated with royalties and distribution fees and also because Spotify is heavily reliant on paying subscribers for revenue, and they only accounts for a third of its total number of active users. In fact, it is this over reliance that has led several observers to express concerns about Spotify's business model and whether it needs to include more paid for services such as advertising.
Swedish music streaming service Spotify recorded an 80% increase in revenues, reaching €1.95bn in 2015 and claimed it had 89m active users, more than 28m of whom subscribed to its paying services. However, despite doubling its advertising revenue, Spotify still reported a loss of €173m, partly attributed to the heavy costs associated with royalties and distribution fees and also because Spotify is heavily reliant on paying subscribers for revenue, and they only accounts for a third of its total number of active users. In fact, it is this over reliance that has led several observers to express concerns about Spotify's business model and whether it needs to include more paid for services such as advertising.