Spotify: You have to lose some money to make money

Spotify rakes in money from advertisers and subscribers to earn its revenue. 

Now available in 12 countries, including the US, Spotify has begun to have a strong influence over online music listening. To use it, you search for one of millions of songs and play it whenever you like. This is unlike other music apps, which limit how many songs you can skip and which songs come on next (like Pandora). The app is free to your computer, but on your smartphone, you must  subscribe to Spotify Unlimited ($4.99/month) for the radio feature or Spotify Premium ($9.99/month) for all the options. 

This product appeals to mobile audiences because, although similar to other online music sites,  you can listen to almost any song without having to buy it. But because of the licensing, Spotify loses $57 million on its $236 million revenue. Overall, however, licenses make the revenue for Spotify.