SPOTIFY, the online music service is losing £1m a month by offering free music funded by advertising, it was revealed yesterday.
The web based music streaming site which is attempting to challenge i-Tune’s dominance in the market finally reported its 2009 figures which showed its advertising revenue was £4.5m while subscription-based revenue reached £6.5m, compared with £380,000 in 2008.
However, it suffered net losses of £16.6m over the period as a result of hefty payments to music rights-holders.
The Swedish-based company had 7m users at the end of 2009, compared with only 1m at the start of the year. But only 250,000 of those were paying a monthly fee to subscribe.