Spotify still isn’t profitable

Music streaming service Spotify likes to crow about how it hands 70% of the revenue it generates right back to artists in the form of royalty payments. Such a massive expense has led the company to be wildly unprofitable in recent years, but Spotify may be slowly crawling its way out of the red. A new regulatory filing released in Luxembourg shows Spotify had revenues of 747 million euros (around $1 billion) in 2013, up 74% from 2012, according to The New York Times. The startup posted a loss of $80 million, but that was smaller than its $115 million loss in 2012.

Spotify may be a big name when it comes to music streaming, but the company is hardly rolling in the dough. The private company disclosed today that it took in 747 million euros (around $1.03 billion at the time) in 2013, up about 74 percent from 2012. However, shelling out a good portion of that to record companies and publishers led to net losses of $80 million for the year — a near 70 percent cut that takes the majority of the service’s revenue. The numbers reveal that Spotify isn’t quite lining its pockets with cash. In fact, more folks opt for the free option instead of paying a monthly fee. Only 8 million of the 36 million active listeners at the end of last year were opening their wallets. Some quick math shows that to be a little less than a quarter of the total user base. In the financial statement, Spotify said 91 percent of sales ($897 million) are from subscriptions with an additional $90 million coming from ads. If the same 70 percent cut heads to licensing fees for both, the free listeners are obviously earning labels, and in turn artists, much less.