Spotify hits 100m users but still yet to make a profit

Swedish music streaming service Spotify said on Monday its user base had grown to 100 million monthly listeners, up from 75 million a year ago. However, majority still tune in for free with commercial breaks, reports The Independent.

The new figures show that the Stockholm-based company remains the industry’s clear market leader with 30 million paid monthly subscribers.

Competition in the sector is becoming fiercer however. Apple Music, launched in June last year, has already amassed million paid users. It does not offer a free option to users.

French rival Deezer claims over 6 million paid users and 15 million monthly listeners. It boasts around 40 million tracks to Spotify’s 30 million.

Amazon also entered the market last year with its cheaper Amazon Prime Music service which it bundles with video-on-demand and delivery services.

Spotify, founded in 2006, has never made a profit as it continues to invest in growth.

This has led to some analysts to question the long-term viability of its ‘freemium’ business model which requires it to convert large numbers of users to paying subscribers.

Despite rapid growth in the number of users, last year’s operating loss of €173.1 million was an increase from €162.3 million in 2014.