84/264 Ad­Supported business revenue Our Ad­Supported revenues increased in each of the quarters presented with the exception of a decrease in the quarter ended March 31, 2017 due to seasonality. Ad­Supported revenue was typically the highest in the fourth quarter of each year due to greater advertising demand during the holiday season. The increase in Ad­Supported revenue throughout the year ended December 31, 2017 was due primarily to increases in the number of impressions sold, driven largely by the growth in our programmatic channel. In the year ended December 31, 2016, there were quarterly increases in Ad­ Supported revenue due primarily to increases in average rates per impression based on the product mix sold during the year. The number of impressions sold was consistent with the previous year. We curtailed the number of desktop impressions in order to promote mobile formats and higher value desktop placements. Cost of revenue Premium cost of revenue Similar to our total revenues, our total cost of revenues increased in each of the quarters presented with the exception of the quarter ended June 30, 2017. The quarter ended June 30, 2017 decreased in comparison to the quarter ended March 31, 2017 due to charges of €32 million recorded in the first quarter of 2017 related to disputes with certain rights holders. The increase in cost of revenue in the year ended December 31, 2017 was less than the increase in Premium revenue as we entered into new licensing agreements with rights holders throughout the year. The increase in cost of revenue in the year ended December 31, 2016 was less than the increase in Premium revenue due to a reduction in discounted trial costs as a percentage of revenue. The quarter ended March 31, 2016 included charges of €16 million related to disputes with certain rights holders. The amount of discounted trial costs included in Premium cost of revenue for the quarters ending March 31, 2016, June 30, 2016, September 30, 2016, December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017, and December 31, 2017, was €24 million, €8 million, €27 million, €9 million, €33 million, €10 million, €27 million, and €7 million, respectively. Ad­Supported cost of revenue Since the quarter ended September 30, 2016, we have seen an increase in Ad­Supported cost of revenue resulting from Ad­Supported MAU growth in all periods presented. The increase in Ad­Supported MAUs has led to higher royalty and streaming delivery costs. The quarter ended June 30, 2017 was relatively flat in comparison to the quarter ended March 31, 2017 due to charges of €8 million recorded in the first quarter of 2017 related to disputes with certain rights holders. The quarter ended March 31, 2017 decreased in comparison to the quarter ended December 31, 2016 due to the seasonality of Ad­Supported revenue. The quarter ended September 30, 2016 decreased in comparison to the quarter ended June 30, 2016 due to a reduction in the amortization of certain non­music content as well as changes in the allocation of costs between Premium and Ad­Supported due to an increase in the content hours consumed by Premium Subscribers relative to Ad­Supported Users. The quarter ended March 31, 2016 included charges of €10 million related to disputes with certain rights holders. Gross profit Our gross profit increased in each of the quarters presented with the exception of each of the quarters ended March 31, 2017 and September 30, 2017. The increases in the other quarters were due principally to growth in revenue that outpaced the growth in content costs, due primarily to a decrease in content costs pursuant to new licensing agreements. Premium Subscriber growth accelerated due to bi­annual trial programs in the summer and winter, which began in the last month of the second and fourth quarters. This led to decreases in gross margin in the first and third quarters of each year, as we absorbed the promotional expenses of discounted trial offers. The quarters ended March 31, 2017 and March 31, 2016 were affected by charges of €40 million and €26 million related to disputes with certain rights holders respectively. 77