The most vivid description of their strategy may well have come from Sean Parker, the billionaire Napster founder, Facebook investor, and Spotify board member, who phrased it in terms Tony Soprano would have appreciated.

Spotify makes little to nothing on the ads, so their whole business model hinges on convincing people to pay to listen to music - something that's obviously been a bit of a challenge ever since most of us got cable modems. Or, they can pay up to $10 per month for an unlimited, ad-free subscription with mobile access. Users can sign up for the free basic plan and play 10 hours of music per month on their computer from the company's massive searchable library, in which case they'll occasionally have their playlists interrupted by piercingly irritating advertisements. So what, exactly, are the money men putting their faith in?įor those not familiar, Spotify is an online jukebox that works on a 'freemium' model, like LinkedIn or Pandora. That's a big vote of confidence from Wall Street in yet another hot web upstart with millions of devoted users and millions in annual losses to show for it. The digital streaming service is reportedly in the process of closing out a deal that would raise $100 million from a group of investors including Goldman and peg its value at around $3 billion total, according to the Wall Street Journal. It somehow seems to have convinced Goldman Sachs to bet on the battered wreck otherwise known as the music business. Spotify hasn't turned a profit, but give the company credit.

What is spotify worth