216/264 Notes to the 2017 consolidated financial statements Impact of IFRS 15 2017 Pre­adoption Adjustments 2017 Post­adoption (in € millions) Revenue 4,066 24 4,090 Cost of revenue 3,163 78 3,241 Gross profit 903 (54 ) 849 Sales and marketing 621 (54 ) 567 Operating loss (378 ) — (378 ) Loss before tax (1,233 ) — (1,233 ) Income tax expense 2 — 2 Net loss attributable to owners of the parent (1,235 ) — (1,235 ) The impact to the opening equity attributable to owners of the parent is not material. Revenue from contracts with customers (i) Disaggregated revenue The Group discloses revenue by reportable segment and geographic area in Note 6. (ii) Performance obligations Subscription revenue The Group generates subscription revenue from the sale of the Premium Service in which customers can listen on­demand and offline. Premium Services are sold directly to end users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand­alone subscriptions from their end customers. The Group satisfies its performance obligation, and revenue from these services is recognized, on a straight­line basis over the subscription period. Typically, Premium Services are paid in advance. Premium partner services are based on a per­subscriber rate in a negotiated partner agreement and may include minimum guarantees for the number of subscriptions that will be purchased from the Group. Under these arrangements, a premium partner may bundle the Premium Service with its existing product offerings or offer the Premium Service as an add­on. Payment is remitted to the Group through the premium partner. When a minimum guarantee is within an agreement and the partner is not expected to meet the commitment, management has concluded the revenue is constrained to the revenue amounts for the actual subscriptions sold in a given period. The Group therefore only recognizes the associated revenue when it is highly probably that this will not result in a significant reversal of revenue when the uncertainty is resolved. The Group assesses the facts and circumstances, including whether the partner is acting as a principal or agent, of all partner revenue arrangements and then recognizes revenues either gross or net. Premium partner services, whether recognized gross or net, have one material performance obligation being the delivery of the Premium Service. Advertising revenue The Group’s advertising revenue is primarily generated through display, audio, and video advertising delivered through advertising impressions. The Group enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold F­23