[troupo]

The comments I saw were you just claiming it's half of the 70%.

According to 2022 annual statement, audit section, page F-3

--- start quote ---

For the year ended December 31, 2022, the Company's cost of revenue was €8,801 million. As of December 31, 2022, trade payables and accrued fees to rights holders was €588 million and €1,665 million, respectively. As explained in Note 2 of the consolidated financial statements, cost of revenue and rights holder liabilities consist predominantly of royalty and distribution costs related to content streaming.

--- end quote ---

- total cost $8.9 billion

of that:

- trade payables $0.59 billion

- fees to rights holders $1.67 billion

The rest (~7 billion aka 78%) is royalties and cost of distribution.

Unless you can argue and show that cost of distribution is over $2-3 billion, only then can you claim that only half of that 70% is going to the labels.

[jbverschoor]

First of all, every single article talks about 70% of revenue (not of the net income)

  Revenue: 11,727
  Fees to rights holders: 1,665

See my list of costs of revenue, all straight out of the financials. With 2 estimates. (all for Q3, not a full year). It added up to about about 720 without support employees, infra, software, hardware, no other cloud partners, real estate etc.

So yeah, that's more than 3B annualized

And some nice crappy disclaimer to further obfuscate their practices:

Auditing cost of revenue and rights holder liabilities was complex due to the number of royalty calculation variables in addition to complex IT systems and a significant volume of data. There was significant auditor judgment related to circumstances where rights holders have allowed the use of their content while negotiations of the terms and conditions or determination of statutory rates are ongoing.

[troupo]

> First of all, every single article talks about 70% of revenue (not of the net income)

Yes. Because payments to right holders are based on revenue. That is what literally all of streaming services do.

> revenue: 11,727 / Fees to rights holders 201,665

Fees to rights holders are not the entirety of payments to rights holders

> See my list of costs of revenue

Where?

> And some nice crappy disclaimer to further obfuscate their practices:

Tell me you have no idea what you're talking about without telling me that. I worked on the system handling contracts and royalty calculations for a much smaller company (Storytel).

Royalty calculations and payouts are insane.

> There was significant auditor judgment related to circumstances where rights holders have allowed the use of their content while negotiations of the terms and conditions or determination of statutory rates are ongoing.

That is

a) a very common thing

b) one of the many, many things that complicate royalty calculations and payouts