Originally Posted by Top100EbooksRank
Which is why Spotify is opting for GROWTH GROWTH GROWTH instead of PROFITS PROFITS PROFITS. They are thinking long-term instead of short-term profits.
The free streaming is the bait. It is costing them a lot of money but as long as 20-25% of the free users eventually switch to paid users, it is well worth the money that Spotify is losing right now.
Yesss, we saw how well this strategy works with FACEBOOK.
Facebook didn't become profitable. It just became uncool
I think such a strategy can only work if you're actually selling something real - real stuff for real money - like Amazon and Apple do. But as long as a user is used to get everything for free (like MP3s or Facebook Spam) it's a bit more difficult. User habits change every few years, and when your mom is on Spotify, you need something else..