First off, there is competition from subscription offerings offered by Microsoft, Rhapsody, Napster, Rdio, MOG, and Thumbplay. In Europe, where Spotify has taken off, such a variety of subscription services simply doesn't exist. Furthermore, most music listeners buy their music from Apple's iTunes or they don't pay for music at all.
Secondly, Spotify still has to do content deals in the US, which are complex due to the nature of the service. In fact, the online music service has been trying for more than a year, but it hasn't signed a single US deal with any of the four major labels.
Last but not least, Spotify saw a huge financial loss in 2009. The music-streaming company enjoyed revenues of £11.32 million, but endured distribution costs of £608,711, cost of sales equal to £18.82 million, and administrative expenses of £8.29 million. The result was an operating loss of £16.4 0million, and a net loss of £16.66 million after taxation.