Spotify operates under a freemium business model (basic services are free, while additional features are offered via paid subscriptions).
Spotify makes its revenues by selling premium streaming subscriptions to users and advertising placements to third parties.
BBC Music Week editor Tim Ingham wrote: "Unlike buying a CD or download, streaming is not a one-off payment.
Hundreds of millions of streams of tracks are happening each and every day, which quickly multiplies the potential revenues on offer – and is a constant long-term source of income for artists." In March 2014, Spotify introduced a new, discounted Premium subscription tier for active students.
Spotify offers an unlimited subscription package, close to the Open Music Model (OMM)—estimated economic equilibrium—for the recording industry.In 2011, it reported a near US million net loss from revenue of 4 million, while it was expected to generate a net loss of million from revenue of 0 million in 2012.In May 2016, Spotify announced "Sponsored Playlists", a monetisation opportunity in which brands are able to specify the audiences they have in mind, with Spotify matching the marketer with suitable music in a playlist.) is a Swedish entertainment company founded by Daniel Ek and Martin Lorentzon.It specializes in music, podcast, and video streaming service that launched on 7 October 2008. It provides DRM-protected content from record labels and media companies.
Students in the United States enrolled in a university can pay half-price for a Premium subscription.