During 2011, the music streaming business improved its revenue to €187.8 millio from €73.9 million in 2010, but sustained an overall deficit because of the cost of securing licences from the major record labels.

Based on the Wall Street Journal, a slump in advert-generated revenue could also take into account the downturn. Spotify recorded an increase of just €6.5 million from this method, a figure which was lower than predicted.

Nevertheless, it absolutely was better news for the firm in the premium subscriptions front, with revenue totalling €156.9 million a €52.6 million increase when compared with 2010.

The financial results haven’t deterred the company from entering new territories, with Canada next in the agenda along with countries in Asia and South America.

The deficit came regardless of the company increasing its revenue for the year to €187.8m, in comparison with €73.9m in 2010.

The loss continues to be related to the heavy costs involved with licensing from record labels the music Spotify offers.

The service confirmed intends to expand to Canada, in addition to some countries in Asia and South America.

It is already obtainable in 15 countries, including the UK and US.

Nevertheless Spotify’s other revenue model – playing ads inbetween music for non-paying subscribers – has slowed.

The organization recorded merely a minor increase – €6.5m – in advertising revenue, making €27.6m in 2011.

Premium fee
Customers to the service can either pay 9.99 for a total membership, allowing mobile listening, or4.99 for unlimited, ad-free listening on a desktop or laptop.

It’ll need to boost further if the company is to balance the cost of licensing its huge catalog of about 15 million tracks.

Spotify pays record labels a little fee every time a song is streamed, whether or not the member is a paying subscriber or not.

Despite Spotify apparently paying out in the region of €200m to labels since 2008, some designers have removed themselves in the library, suggesting that the comparatively low fees for streaming failed to provide enough payment for any potential lost sales through more traditional means.