4 ms·

This will hurt Google and may destroy Spotify. If they’re the only ones that get the 0/4% deal and the other services like tidal are paying full price that’s a

by vGPU 3y ago

This will hurt Google and may destroy Spotify. If they’re the only ones that get the 0/4% deal and the other services like tidal are paying full price that’s a blatant anti-competitive agreement.

htrp 3y ago
>This will hurt Google and may destroy Spotify. How does this destroy Spotify?
- oliwarner 3y ago
  They could be fined and then forced to pay full whack. But I'm not sure they meet the threshold for anti-competative practice. You'd need to show some sort of paid exclusivity (eg a bribe so only Spotify could get a better rate). 30% for market access is a bigger net evil that anything Spotify might be doing IMO.
- vGPU 3y ago
  They run very slim profit margins, regulators could fine them more than they could afford to pay.
  - pests 3y ago
    Why would Spotify be fined here? What wrong doing?
  - lotsofpulp 3y ago
    They run negative profit margins: https://www.macrotrends.net/stocks/charts/SPOT/spotify-technology/net-income https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn... https://www.macrotrends.net/stocks/charts/SPOT/spotify-technology/profit-margins https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn...
notyourwork 3y ago
Agreed and this news comes just 6 months after Spotify hiked their subscription price. Which at the time was well received by the stock market. How profitable would Spotify be if they were paying full price?
- Mindwipe 3y ago
  > How profitable would Spotify be if they were paying full price? They're not profitable now so very not.
  - notyourwork 3y ago
    Last quarter they posted 1.94% profit margin.
    - FirmwareBurner 3y ago
      Question: how does Spotify pay so well when they have profit margins lower than a restaurant?
      - twosdai 3y ago
        Scale. A restaurant can only serve 100's or maybe 1000's of guests in a single day. Spotify has Millions of subscriptions. 2% at scale is significant. Here is their recent Q3 earnings report: https://newsroom.spotify.com/2023-10-24/spotify-reports-third-quarter-2023-earnings/ https://newsroom.spotify.com/2023-10-24/spotify-reports-thir... Their revenue was 3.4 Billion Euros at 2% they can take away 68 Million dollars. Which is more than enough for the business to be viable.
      - callalex 3y ago
        For the same reason you buy nicer toilet paper for your home than the stuff you find at a truck stop: it’s not a significant portion of their expenses.
- carstenhag 3y ago
  Netflix went a different route. After being offered to only pay a 10% cut, they made calculations and decided to not offer in-app-subscriptions at all. This article has details: https://www.theverge.com/23954852/google-netflix-app-store-deal-play-10-percent-revshare https://www.theverge.com/23954852/google-netflix-app-store-d...

by vGPU 3y ago

This will hurt Google and may destroy Spotify. If they’re the only ones that get the 0/4% deal and the other services like tidal are paying full price that’s a blatant anti-competitive agreement.

htrp 3y ago

>This will hurt Google and may destroy Spotify. How does this destroy Spotify?

oliwarner 3y ago
They could be fined and then forced to pay full whack. But I'm not sure they meet the threshold for anti-competative practice. You'd need to show some sort of paid exclusivity (eg a bribe so only Spotify could get a better rate). 30% for market access is a bigger net evil that anything Spotify might be doing IMO.
vGPU 3y ago
They run very slim profit margins, regulators could fine them more than they could afford to pay.
- pests 3y ago
  Why would Spotify be fined here? What wrong doing?
- lotsofpulp 3y ago
  They run negative profit margins: https://www.macrotrends.net/stocks/charts/SPOT/spotify-technology/net-income https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn... https://www.macrotrends.net/stocks/charts/SPOT/spotify-technology/profit-margins https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn...

notyourwork 3y ago

Agreed and this news comes just 6 months after Spotify hiked their subscription price. Which at the time was well received by the stock market. How profitable would Spotify be if they were paying full price?

Mindwipe 3y ago
> How profitable would Spotify be if they were paying full price? They're not profitable now so very not.
- notyourwork 3y ago
  Last quarter they posted 1.94% profit margin.
  - FirmwareBurner 3y ago
    Question: how does Spotify pay so well when they have profit margins lower than a restaurant?
    - twosdai 3y ago
      Scale. A restaurant can only serve 100's or maybe 1000's of guests in a single day. Spotify has Millions of subscriptions. 2% at scale is significant. Here is their recent Q3 earnings report: https://newsroom.spotify.com/2023-10-24/spotify-reports-third-quarter-2023-earnings/ https://newsroom.spotify.com/2023-10-24/spotify-reports-thir... Their revenue was 3.4 Billion Euros at 2% they can take away 68 Million dollars. Which is more than enough for the business to be viable.
    - callalex 3y ago
      For the same reason you buy nicer toilet paper for your home than the stuff you find at a truck stop: it’s not a significant portion of their expenses.
carstenhag 3y ago
Netflix went a different route. After being offered to only pay a 10% cut, they made calculations and decided to not offer in-app-subscriptions at all. This article has details: https://www.theverge.com/23954852/google-netflix-app-store-deal-play-10-percent-revshare https://www.theverge.com/23954852/google-netflix-app-store-d...