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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?

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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...

> 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.

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