We won't know for sure until they file for IPO and release their financials, but remember that Spotify doesn't own any music. Every stream they play they have

We won't know for sure until they file for IPO and release their financials, but remember that Spotify doesn't own any music. Every stream they play they have to pay the artists/labels for, so their margins on subscriptions are probably slim to start with. LinkedIn also tells me they have over 2,200 employees, which to me is insane. Even if their salaries are merely market average, that is a huge chunk of change they are paying in labor costs. Add in office space, marketing spend, server/bandwidth fees, etc. and you get to where they are today.