this post was submitted on 22 Jul 2023
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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/[email protected]
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[–] [email protected] 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?

[–] [email protected] 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.