Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

[H2SO4]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box there was a note that asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

LOL. Shortsighted. There are certain people/organisations that are in a very powerful position and abuse this, I wouldn’t mind betting Apple are one of these. A fee for selling, fine. The rest of the rules, crap.
Apple are like Tesco, they squeeze the life out of their suppliers and always will do but try to look whiter than white. SO you want to sell in the Apple store………remember the cannot duplicate functionality? How about if the supermarkets said to the big brands open your own damned stores because Mr. McCain we already sell oven chips, and you Mr. Fairy get lost we got our own washing up liquid.

 

[Applestock]

No, what Apple is doing is asking for 30% on your electricity bill from your power company, because you downloaded an app on Apple store. basically if you sign up using an app, apple wants 30% of what-ever for providing nothing else than the initial download. And you can't add a signup here in your app.

That's a crap analogy. First, they are handling most of the accounting for you when you go through the app store for payment. Second, Apple has to invest in creating the best platform to attract the most well healed users... users that are willing to pay a premium for the best experience. That investment comes in many forms, from APIs/SDKs so the iOS version of the app runs smoothly and beautifully, to network infrastructure so Spotify can distribute not just the initial download, but the constant updates. Finally, it's no longer 30%. It's 15% for subscribers over a year, which would be a majority of Spotify's users. Google play store charges 15% for subscription as well (they actually changed their rates as a response to Apple's change). If 15% is too much money, Spotify should just either 1) remove sign up features completely and let educated consumers figure out how to sign up on the web, or 2) pack up and leave the App store. Complaining like a whiny bitch is not the way to compete in the market.

 

[peteo]

All those citing Walmart analogy, if I buy a video game from Walmart and then go home insert the disc in my PS4 and buy additional content (DLC), should Walmart get a share of the DLC purchase?

You are not using walmart at that point. With spofity the app is still using apple services for updates, notifications, storage, bandwidth, API's, engineers to keep all those running 24/7, App support, power etc... This stuff isn't FREE

 

[skit911]

All those citing Walmart analogy, if I buy a video game from Walmart and then go home insert the disc in my PS4 and buy additional content (DLC), should Walmart get a share of the DLC purchase?

No, PlayStation or Microsoft would. They get a cut of the game too if you buy it on their online store. THIS ISNT HARD TO UNDERTAND PEOPLE, EVERY DIGITAL STOREFRONT TAKES A CUT. Especially when you get the exposure and such a good purchase rate per capita like the App Store, deal with it, or offer your services via a browser.

 

[bilboa]

No, what Apple is doing is asking for 30% on your electricity bill from your power company, because you downloaded an app on Apple store. basically if you sign up using an app, apple wants 30% of what-ever for providing nothing else than the initial download. And you can't add a signup here in your app.

Apple isn't just providing a download, they're providing an incredibly popular platform that provides Spotify with many new opportunities to get new subscriptions. That's why the Walmart analogy is pretty good. When Walmart lets you put your product on their shelf, you're not just getting some shelf space, you're getting access to the millions of Walmart customers as potential buyers of your product. Walmart isn't going to let you use their shelf space if they're not getting anything out of it.

 

[Michael Scrip]

People need to realize the subscription fee is because the subscription is being billed through apple, which requires more than just hosting an app for download.

That's absolutely correct.

However... since you mentioned Apple's billing system... remember it doesn't cost Apple $4 a month to process my credit card. It's around 70 cents or so.

Which means the other $3.30 every month, per user, goes to storage and bandwidth... which is still high since the app is already sitting on a server and I've already downloaded it to my phone.

It just seems like Apple is getting a whole lotta monthly revenue for not much monthly work.

But those are the rules. And I understand why Apple does it.

Apple is right to charge extra for this and is starting to charge less (e.g. 15%) after it has built up economies of scale.

It doesn't cost Apple $2 a month to process my credit card either.

I know, I know... there's more than just the credit card fees. I'm just being outrageous.

Apple sets the rules and 3rd-parties must abide by them.

I'm on Apple's side.

 

[thisisnotmyname]

Amazon has not released a prime app for appleTV (used it on my google TV all the time)
Its annoying, but i like my appleTV so much that I'm keeping it

I have Prime Fresh which comes with Amazon Prime Video and I don't use it at all given that I'm on Apple TV throughout my home and prefer all of the other benefits it provides. With Netflix, HBO Now, Showtime app, etc... I don't feel I'm missing out with the lack of Amazon but I would install the app if they release it. I definitely will NOT be purchasing a FireStick.

That reminds me to check whether Transparent is on iTunes.

 

[CarlJ]

Apple's rules are not hard to understand: they want a cut if an app is sold through the App Store, or if a subscription is sold through an app from the App Store. And as a necessary part of this, you can't advertise in your app, "hey, let's go around the corner and do a deal where Apple can't see". If their terms weren't across-the-board, if, say, they allowed in-app subscriptions without taking a cut, then before long most apps would switch to free-but-in-app-subscriptions, because, of course, developers like money - that's understandable. But if there's a way to not pay the App Store, then in practical terms the App Store will not get paid - some tiny loophole will become every developer's preferred avenue. And Apple's not going to run the App Store at a loss.

Amazon has a Kindle app for iOS - it's a great app, I have it on my home screen. It's only useful for reading books purchased from Amazon, which you can't buy in the app. Amazon doesn't seem to have a problem playing by the rules they agreed to, and they sell tons of books. They have attracted people to their business of selling ebooks, and to the Kindle "brand" - they've gotten the word out, and they're very successful.

Spotify wants a way to reach their subscribers to tell them to pay Spotify directly so Apple doesn't get any money out of the arrangement - understandable, because Spotify likes money (so much so that they pay the actual artists a pittance - if I understand correctly, Spotify is the streaming service that most artists like the least). And there are plenty of ways that Spotify can get the word out: they can advertise on the Internet, they can put ads in magazines and newspapers and on TV. But that would cost them money. And they like money, so, effectively, they'd much rather do the advertising for their service, for free, on Apple's dime. Now, if I came into your restaurant with signs and banners advertising my restaurant, how well do you think that would go over?

And they're lying about how this has played out. They're playing this as them being pushed around by Big Bad Apple, when Apple just wants them to play by the rules that they - like everyone else - accepted to get into the App Store. They paint themselves as the underdog here, when just a little while back they were crowing about how much bigger they are than Apple Music - you can't have it both ways. I don't have a lot of respect for Spotify at this point.

 

[applesith]

This is exactly right. They are forcing Spotify to sell their services APPLE's way instead of how they want to.

Lets use Walmart again as an example:

They have an app in the app store. If I order something using that app does Apple get a 30% cut of the product I ordered from Walmart? Of course not. Thats just stupid.

Apple is 100% making an exception for Spotify. Its just not in Spotify's favor, its in Apples. Apple gets more disgusting every day...

No. Apple's fee applies to in-app purchases. Wal-mart and Amazon type apps allow you to shop their site- making a purchase in the Walmart app doesn't add any new functionality to the app itself.

 

[sudo1996]

Can't we just stick to good old car analogies?

Here it goes!
Spotify wants to do a muffler delete on their BMWs, but Apple, the government, doesn't want that due to noise issues. Spotify should go make their own roads if they want to drive their muffler-deleted BMWs.

 

[peteo]

That's a crap analogy. First, they are handling most of the accounting for you when you go through the app store for payment. Second, Apple has to invest in creating the best platform to attract the most well healed users... users that are willing to pay a premium for the best experience. That investment comes in many forms, from APIs/SDKs so the iOS version of the app runs smoothly and beautifully, to network infrastructure so Spotify can distribute not just the initial download, but the constant updates. Finally, it's no longer 30%. It's 15% for subscribers over a year, which would be a majority of Spotify's users. Google play store charges 15% for subscription as well (they actually changed their rates as a response to Apple's change). If 15% is too much money, Spotify should just either 1) remove sign up features completely and let educated consumers figure out how to sign up on the web, or 2) pack up and leave the App store. Complaining like a whiny bitch is not the way to compete in the market.

I think spotify should just come out with their own amazing music player so they dont have to pay apple or google.
Then maybe apple can sue them for being "anti competitive" when they wont let apple music on the device.

 

[dannyyankou]

So, Apple has time to write a letter on a Friday. Why can't they release beta 2 on a Friday too?

Why are people so obsessed about this? Lol

 

[tkatz]

I struggle with this argument as I'm sure most of it is automated no? Are their a fleet of Apple employee's dealing with these transactions every day? I do believe if you have any issue with an app you contact the developer and NOT Apple. But perhaps I'm wrong?

Apple is handling the transaction in this case and they have to pay a small fee every time there's a credit card transaction (google merchant fees). When someone signs up on Spotify's site directly, Spotify is then handling the transaction. So when someone purchases through the App store, Spotify doesn't have to pay the fees, they just have the money deposited to their account.

Apple also then has to deal with unhappy users, charge backs, cancellations, etc..

 

[miknos]

Crystal clear: Apple wants a cut if you're getting subscriptions thru their platform. 15% (after a year) seems reasonable. But for Spotify who's losing money due to increasing managing costs, it's a he'll lot of difference.

Spotify can continue to publicly their service online and not pay Apple. But no. They want to advertise in the App Store circumventing the in-app purchase.

They're desperate.

 

[waitandwait]

I said this in the last thread.

Spotify isn't exactly a saint and stop trying to justify Spotify's actions.

Spotify wants the publisher's cake, Apple's cake and everyone else's cake and eat it. They already squeeze money from composers and tried to get an exception from Apple for their app because they want to maximise their profits and revenue. The main beneficiaries are not the consumers but Spotify themselves.

 

[Applestock]

LOL. Shortsighted. There are certain people/organisations that are in a very powerful position and abuse this, I wouldn’t mind betting Apple are one of these. A fee for selling, fine. The rest of the rules, crap.
Apple are like Tesco, they squeeze the life out of their suppliers and always will do but try to look whiter than white. SO you want to sell in the Apple store………remember the cannot duplicate functionality? How about if the supermarkets said to the big brands open your own damned stores because Mr. McCain we already sell oven chips, and you Mr. Fairy get lost we got our own washing up liquid.

Walmart has every right to decide what they want to sell in their stores and what they don't want to sell. They actually wield that power to great effect to get the best prices. Look at Amazon, who decided that they didn't want to sell AppleTVs because they don't include amazon prime video. Everyone is doing it so you can't hold Apple to a different standard just because they're making good money.

 

[apolloa]

LOL. Shortsighted. There are certain people/organisations that are in a very powerful position and abuse this, I wouldn’t mind betting Apple are one of these. A fee for selling, fine. The rest of the rules, crap.
Apple are like Tesco, they squeeze the life out of their suppliers and always will do but try to look whiter than white. SO you want to sell in the Apple store………remember the cannot duplicate functionality? How about if the supermarkets said to the big brands open your own damned stores because Mr. McCain we already sell oven chips, and you Mr. Fairy get lost we got our own washing up liquid.

Yeap, take this website, they post a story like this, because we can have a good argument about it, but also because they get increased clicks and views, and they can then use that information to charge more for advertisers and thus increase profits. It's called business, everything Apple does is for profits first, they just manage to paint it in a pretty un-harmful picture that people lap up. Not saying their products aren't good, but some of the business tactics they do, like 16GB RAM, are shocking and so obviously done for profit.

 

[Rogifan]

Where did I say nobody would? If 8m people moved from Spotify to AM, AM would be ahead in paying customers. I'm arguing that, nothing more. I don't get the point of your second questio. They're providing access to iOS devices and asking a cut from everything.

Well that's Apple's argument - that Spotify has the paying customers it does because it has an app on the App Store. As far as my second question, Apple only gets a cut of digital sales, which also just happens to be areas where they directly compete. And Apple isn't charging itself 30% for digital content sales. If Spotify had another way to get on an iOS device outside of the App Store I'm sure they'd use it.

 

[sudo1996]

Amazon has not released a prime app for appleTV (used it on my google TV all the time)
Its annoying, but i like my appleTV so much that I'm keeping it

I've been annoyed with all these TV boxes. I gave up. I got a Windows PC hooked up to my TV. Every paid service supports it without question. It also has qBittorrent and Adobe Flash. It even has a DVD drive, just in case. Now I can watch whatever the heck I want without jumping through hoops. It just works.

 

[smallcoffee]

I'm with Spotify on this one. Most people's comments here, I've noticed, are based on their own personal notions of fairness and right versus wrong. And while there certainly is a public relations aspect to these discussions, there's also an important legal piece. Apple's behavior is highly anti-competitive, and contrary to the opinions espoused by many, that is not their right.

A bunch of law firms will ultimately make a lot of money battling this one out (and I don't mean just Spotify v. Apple), but at the end of the day, Spotify and other companies who take this position have a pretty strong legal argument.

What you're arguing is that all companies must charge the same amount across all platforms, and that a company cannot charge another company for using their platform if that charge causes the price to increase (or decrease) AND if a platform releases a product it must also cost the same as the leading competitor.

That's ridiculous.

 

[Kaibelf]

Yeah right, "we firmly adhere to the principle of treating all developers fairly and equitably", all except themselves. Which is their whole point.

Us users have paid plenty for Apple's hard work (Check Apple's profit on iOS devices), stop ****ing us users over by forcing other app providers out by using unfair competition.

What nonsense. That's like saying "I paid enough for my computer, so I shouldn't have to pay for accessories and software after the fact. " Grow up. No one owes you something for nothing, and if you don't like the price, don't buy it.

 

[GeneralChang]

How does it matter that it is a utility? The terms are clear, you sign up for electricity using a app, apple gets 30%. They can't add a click here to signup. That is what they are doing.

Yes, but per regulation specific to utilities, I'm pretty sure that you can't sign up via an app. Also, even if you could, the laws that would prevent apple skimming 30% off of that monthly transaction are specific to utilities and would still have nothing to do with the situation with Spotify.

 

[ArtOfWarfare]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box there was a note that asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

The key issue here is that Spotify doesn't technically have to distribute through Apple, and doesn't want to distribute through Apple, but Apple forbids anyone from distributing not through them.

Evidence: Spotify distributes the desktop version of their app through their own website, not through the Mac App Store.

Your analogy would only be correct if Walmart somehow had a monopoly that required all distribution to be done through them.

 

[skit911]

I'm with Spotify on this one. Most people's comments here, I've noticed, are based on their own personal notions of fairness and right versus wrong. And while there certainly is a public relations aspect to these discussions, there's also an important legal piece. Apple's behavior is highly anti-competitive, and contrary to the opinions espoused by many, that is not their right.

A bunch of law firms will ultimately make a lot of money battling this one out (and I don't mean just Spotify v. Apple), but at the end of the day, Spotify and other companies who take this position have a pretty strong legal argument.

What exactly makes it anticompetitive? The fact that apple made a successful platform and an even better app distribution model, for which every other developer pays to use (and successfully), but Spotify is somehow this exception?

 

[Zimmy68]

Yep, if anyone doesn't see how Apple Music is not a huge advantage because it doesn't have to pay 30% more, you are seriously delusional.
Couldn't Spotify remove the in app purchase all together and have a web page to order the service?
I mean if buy something on the Amazon app, Apple doesn't get a 30% cut, do they?
Just have a Spotify store.

I'm all for Apple getting its 15%-30% if they are maintaining the customer lists, resubs, etc. but if all they are doing is getting 30%, then that isn't fair.

It is a non issue for me because anyone spending 30% more when you can just sign in on the web site deserves to get taken.