The company believes you have to spend money to make money.

Spotify almost doubled its revenue in 2015, but net losses increased due an increase in royalty payments, The Wall Street Journal reports.

While the company’s revenue was a massive €1.95 billion last year, an increase of 81% from €1.08 billion in 2014, Spotify’s net loss was €173.1 million, up 6.7% from €162.3 million the previous year.

The streaming service has never been profitable, but there’s no indication it’s going anywhere soon. According to a legal filing made on Monday, Spotify believes that it will make “substantial revenues” as its international reach expands, part of a long-term strategy which involves reaching profitability by spending money from outside investors.

Spotify said in the filing that a sharp increase in royalty payments to labels and artists was partly to blame, with distribution and other costs adding to the €1.63 billion in total expenses for 2015 – up from just €882.5 in 2014.

Despite an increase in royalty payments, Spotify also managed to increase revenue from paid subscriptions: €1.74 billion came from paying users last year, up from €978.6 million in 2014.

Advertising revenue also increased from €98.8 million in 2014 to €195.8 million last year.

“We face competition from players with substantial resources at their disposal,” Spotify directors Martin Lorentzon and Par-Jorgen Parson said in the filing. “The group intends to continue making significant investments in developing new products.”

Spotify has faced increased competition from Apple Music, Tidal and most recently SoundCloud in the streaming business, but the company indicated recently that competition isn’t necessarily a bad thing.

Earlier this month, Spotify vice president Jonathan Forster revealed that the company had grown faster since the launch of Apple Music in June 2015 than the period that preceded it.

“It’s great that Apple is in the game. They are definitely raising the profile of streaming. It is hard to build an industry on your own,” he said.

The company reached 30 million paid subscribers in March.



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