Spotify shares dropped 9% after its first earnings report as a public company disappointed investors.
The Swedish company said losses reduced to 41 euro (£36.1 m; $49m) in the three months to the end of March from the 139m euros the year before.
But while the results were largely in line with estimates, investors remain worried about Spotify is losing money.
“Investors were hoping for a little more,” Atlantic equities analyst James Cordwell told Reuters.
He pointed to slowing growth in North America – which is seen as an indicator of how you compete against Apple and Amazon.
But Spotify chief executive and co-founder Daniel Ek said that he did not see any “significant impact” from the competition.
“When you look at this, we do not believe that this is a winner-takes-all market. In fact, we believe more services available on the market, and we are all in a growth market,” he said.Discount problem
Spotify sales hit 1.14 billion euro (£1bn; $1.37 billion euros) in the three months to the end of March.
And while the music streaming pioneer’s total user base reached 170 million, less than half have been subscribers for a fee.
Morningstar analyst Ali Mogharabi suggested that part of the problem might be that it is equipped with “too many discounts” on music subscriptions, and to extend the length of free trials as it tries to convince users to pay, rather than the free, advertising-funded service.
Spotify was valued at about $26bn in its market debut in New York last month.
Since its announcement, it was reported that Sony – a key to the investor – had cashed in nearly half of his actions.