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A huge percent of the premium users likely started as free accounts, or heard about Spotify from someone with a free account, etc. It also gives more bargaining power, listener data, mind share.

Even if they lost money per free account, it’s worth it.

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And after all of these years they still aren’t profitable.

So their strategy doesn’t seem to be doing to well.

Haven't you heard? In startup land you don't need to be profitable as long as you're famous. All you need is investors to keep that runway going. Line goes up!

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