[julien040]

France did something like that last month. To support the "Centre national de la musique", a new 1.2% tax was added on digital music streaming services. But rather than absorbing the cost, Spotify just raised its subscription cost. In the end, the government just taxes its citizens more instead of getting a bigger share of revenue from these companies.

https://newsroom.spotify.com/2024-03-07/spotify-to-adjust-it...

[gbanfalvi]

That’s not necessarily always true. Spotify may very well pass costs on _right now_, but it may choose to lower its rates if it sees that enough people start unsubscribing.

Companies are constantly adjusting subscriber count vs revenue per subscriber and will charge the absolute maximum they can get away with. Doesn’t make sense not to as a profit-driven company.

[bravetraveler]

We're decades in on Netflix specifically ratcheting their prices like clockwork. One may say inflation, doubt - they adjust more often than anyone.

It overwhelmingly goes in one direction. A new sucker is born every day

The network effect of this is "the money machine must grow/demands more". They don't have to do this - everyone knows how well-paid their people are. It's a system of systems.

There's an academic understanding and then the practical one. Everyone stands to benefit from a Boogeyman

[kbelder]

Right, it generally settles into a new optimum where customers are paying a little more, the company is earning a little less, and the state gets its so-well-deserved cut.

[fmobus]

Not sure why you are getting downvotes, you are absolutely right.

It's a positive outcome of economic science that procuders can't fully pass taxes to consumers. There's always some sort of division of the overall dead weight loss, and it's always proportional to that market's conditions (competition, market share, elasticity, etc). If a producer decides to try to fully pass the price, it's because they believe their costumers are inelastic or that competition will not be able to undercut them.

To put it another way: if companies were fully passing tax hikes onto the customer... then companies wouldn't be complaining about taxes!

[chrisandchris]

That will be a first, a company lowering its subscription prices.

I mean, Microsoft raised their prices last year substantually. And they had a "record year 2023".

[pleb_nz]

Not very often companies will absorb the costs IME. Sometimes though it’s delayed or through some other side effect.