Music streaming service Spotify released its financial figures for 2010 on Monday, displaying dramatic revenue increases as well as increasing losses.
The figures released are from the seven European countries where Spotify operated last year, and do not reflect the service’s July launch in the United States. Those numbers won’t be public until next year.
In 2010, Spotify’s revenue climbed to $99 million, up 458% from 2009. Of that total, $71 million was generated by subscriptions, with $28 million coming from advertising. Losses for the year stood at $42 million, however, an increase from $26 million the year before.
These figures underscore the central challenge facing the company — though its offer of a free, ad-supported tier helps attract users, converting free users to paid subscribers is key to its long-term sustainability. At the end of 2010, the company had 750,000 paid subscribers; it now claims 2 million.