Basically, Pandora is paying out a huge amount of money to artists you’ve never even heard of. Meanwhile, Spotify is [losing money like crazy](http://hypedsound.com/news/details/SPOTIFY-FINANCIALS-DEEMED-UNSUSTAINABLE). I don’t know any details about how Spotify works, but I’m guessing they pay a lot more in license fees per customer than Pandora does because of the ability to play any song at any time — even on free accounts. I’ve always wondered how their ads could possibly cover that.
Engineer, Automattician, Wisconsin Badger