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Comment by Justin_K | Hacker News Reader

Nothing says Anti-Trust like secret deals that violate their published TOS.

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.

>This will hurt Google and may destroy Spotify.

How does this destroy Spotify?

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.

They run very slim profit margins, regulators could fine them more than they could afford to pay.

Why would Spotify be fined here? What wrong doing?

They run negative profit margins:

https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn...

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?

> How profitable would Spotify be if they were paying full price?

They're not profitable now so very not.

Last quarter they posted 1.94% profit margin.

Question: how does Spotify pay so well when they have profit margins lower than a restaurant?

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-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.

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.

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-d...

Don’t tell anyone. But Netflix doesn’t pay retail for AWS and Spotify doesn’t pay retail for GCP. Heck Epic has special deals with console makers

AWS and GCP aren't monopoly/duopoly. Console may be interesting but seems no one cares if that market.

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