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Spotify’s first US price hike for Premium is coming next week (www.theverge.com)

submitted 1 year ago by [email protected] to c/technology

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[–] linearchaos -2 points 1 year ago (3 children)

Here's a good estimate on their hosting, streaming and licensing costs

https://www.theguardian.com/technology/blog/2009/oct/08/spotify-internet

They tack it down to about 6 million a month that is of course excluding lawyers and other salaries.

[–] LetMeEatCake 3 points 1 year ago* (last edited 1 year ago) (2 children)

Interesting. That's dated October of 2009 and says Spotify had 5m users. Looks like they have ~200m users today. At a linear scaling it'd be twenty times larger, or £120m=$154m per month. That's $1.85b/year.

In reality it wouldn't scale linearly, but it also accounts for zero salaries, which was the major component of my comment.

[–] linearchaos 1 points 1 year ago (1 children)

Look I appreciate the downvotes and all, but didn't you just say that fixed costs don't go up and down with users?

[–] LetMeEatCake 1 points 1 year ago* (last edited 1 year ago)

(1) I didn't downvote you.
(2) I said something similar but critically different:

Building a streaming platform that expects to have multiple billions of dollars in revenue across hundreds of millions of users is going to have enormous fixed costs that cannot be trivially scaled down if user counts are lower. If they plan around a much lower user count they can scale it down at that planning phase, but not after the fact (at least not easily).

The intended size of the platform dictates the fixed costs.

And...
(3) The data you provided wasn't fixed costs. It was variable costs like server time, music rights, and bandwidth.