Swedish music streaming provider Spotify says it has 15 million paying subscribers, boosting claims that its revolutionary and controversial model can work.

The expanding startup said late on Monday it had added 2.5 million subscribers since November amid widespread reports that the unlisted company was going public.

Spotify has become a major power broker in the music industry since its US launch in 2011, drawing criticism from stars like singer Taylor Swift and propelling lesser known artists into the spotlight.

The company’s two tier service allows users to stream an extensive catalogue for free with audio and display advertising, while those who subscribe pay eight to 11 euros ($A12 to $A16) a month for ad free music streaming.

Mobile and smartphone users, however, have to pay to be able to choose tracks.

At the end of 2014, Spotify had 60 million “active users” of whom 15 million were paying subscribers, the company said.

While the unlisted company does not disclose its finances, Spotify has said that it keeps 30 per cent of its revenues, while 70 per cent goes to artists and rights holders.

The company, which has entered markets in Europe, North and South America and Asia, has been criticised for not paying enough to artists.

In November, US star Swift pulled her catalogue from the service, citing low compensation.

Spotify founder, Daniel Ek, responded that his company provides an alternative to listeners downloading music online for free.

“Piracy doesn’t pay artists a penny – nothing, zilch, zero,” Ek wrote on the company’s website.

“Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists,” he said.

AFP0