78/264 Cost of revenue Year ended December 31, Change 2015 2016 2017 2015 to 2016 2016 to 2017 (in € millions, except percentages) Premium 1,487 2,221 2,868 734 49 % 647 29 % Ad­Supported 227 330 373 103 45 % 43 13 % Total 1,714 2,551 3,241 837 49 % 690 27 % Premium cost of revenue For the year ended December 31, 2017 as compared to 2016, Premium cost of revenue increased €647 million, or 29%, and Premium cost of revenue as a percentage of Premium revenue decreased from 84% to 78%. This decrease in cost of revenue as a percentage of Premium revenue was driven largely by a reduction in content costs pursuant to new licensing agreements. The increase in cost of revenue was driven primarily by the increase in new Premium Subscribers, which led to higher royalty and streaming delivery costs of €632 million and €35 million, respectively. Additionally, there was an increase of €9 million related to discounted trial costs. These increases were partially offset by a reduction in payment fees of €26 million. For the year ended December 31, 2016 as compared to 2015, Premium cost of revenue increased €734 million, or 49%, and Premium cost of revenue as a percentage of Premium revenue decreased from 85% to 84%. This decrease in cost of revenue as a percentage of Premium revenue was driven largely by a higher proportion of discounted trial costs in the prior year. The increase in cost of revenue was driven primarily by the increase in content costs related to the increase in new Premium Subscribers, a €27 million provision for legal disputes with certain rights holders, and an increase of €18 million related to discounted trial costs. In addition, we had an increase of €11 million in other costs of revenue, such as payment processing fees and customer service centers, due to our growing Premium Subscriber base. Ad­Supported cost of revenue For the year ended December 31, 2017 as compared to 2016, Ad­Supported cost of revenue increased €43 million, or 13%, and Ad­Supported cost of revenue as a percentage of Ad­Supported revenue decreased from 112% to 90%. This decreased percentage was driven largely by a reduction in content costs pursuant to new licensing agreements. The increase in cost of revenue was driven primarily by the increase in new Ad­Supported MAUs, which led to higher royalty and streaming delivery costs of €30 million and €5 million, respectively. For the year ended December 31, 2016 as compared to 2015, Ad­Supported cost of revenue increased €103 million, or 45%, and Ad­Supported cost of revenue as a percentage of Ad­Supported revenue decreased from 116% to 112%. The decreased percentage was driven largely by the impact of reduced streaming delivery costs as a percentage of revenue. The increase in cost of revenue was driven primarily by the increase in content cost of €68 million related to the increase in new Ad­Supported MAUs and a €18 million provision for legal disputes with certain rights holders. In addition, we had an increase of €10 million in other costs of revenue, which include the costs of our customer service centers due to our growing Ad­Supported User base. 71