Spotify has two different levels for the users:
- Premium: grants access with payed subscription.
- Freemium: grants access without paying in exchange for being exposed to ads in between songs.
In this last case, the money Spotify collects does not come from subscriptions, but rather from advertisers, which pay for the ads to be included in between songs. This is the money that comes from free users.
But this means that, for example, if in order to generate 1€ with streams from paying users it is necessary to stream a song 250 times, it needs about 6000 streams from a freemium user. This is what causes they royalties coming from Spotify to differ drastically from one month to another.