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

[Carlanga]

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.

No, that is not "exactly" what Spotify is doing. You can't return and rebuy.

It would be more like having an announcement right in the front of box to go to their retail store to buy it at X price. While Walmart has it priced higher than their retail store.

 

[Michael Goff]

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.

Exactly, they're selling access to iOS devices. Also, this cut was there before Apple went into streaming music.

 

[OldSchoolMacGuy]

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.

Exactly.

People seem to be missing the entire reason why developers WANT to be in the App Store. It allows them access to hundreds of millions of customers that they don't have without it. It means potential for millions in revenue.

Those taking Spotify's side here must also believe that Best Buy and Amazon shouldn't charge anything to carry a product in their stores. They should simply allow everything to be sold there at no cost. I'm sure they're also unhappy that with Amazon for selling the Kindle while charging Apple to sell the iPad in their store.

 

[stoopkidblues]

Apple left this note and walked out like

 

[bushido]

what a stupid reply. hundreds of millions of downloads doesnt mean revenue as the app itself is free. apple just doesnt allow a link to promote a off app subscription because they know damn well that less people would subscribe through the App. Only clueless fools do it in the first place but that's another story

 

[waitandwait]

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.

Do you know Spotify has the option of charging 6.99?

 

[neuropsychguy]

I feel like Spotify should pull out of the Apple App Store completely.

And lose a lot of money and subscribers? Some people would switch but a lot of people would decide to switch over to Apple Music. If Spotify ended being on iOS, they'd probably go out of business.

 

[Rogifan]

Does Apple Music use Google's IAP on Android?

 

[GeneralChang]

Other than me, lawyers don't code.

And coders don't law...ee. Loiy... law... you know what, the moment has passed. Sorry.

 

[Michael Goff]

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.

Apple also has a huge advantage in that they can lose money until AM is profitable. Spotify can't.
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Does Apple Music use Google's IAP on Android?

Very good question, I'm not sure.

You can't sign up for a family plane from what I'm reading. Otherwise yes.

 

[OldSchoolMacGuy]

I feel like Spotify should pull out of the Apple App Store completely. I have a feeling the result would backlash on Apple and not on Spotify. Android owns the mobile market anyways. If anything, it would make more people switch to Android. Anytime you get in between a person and their music, your asking for trouble.

The iOS App Store brings in 75% more revenue than the Android app store, even with far less users. That's why it's the preferred development platform, as users of iOS devices are much more willing to pay for apps and services than those on Android.

Pulling out of the Apple App Store would mean a HUGE hit in revenue for Spotfy. As the service has never once been profitable and is still losing millions, leaving the App Store would likely put them out of business for good.

Sounds like a brilliant move you're suggesting.

 

[SMIDG3T]

The rules are the same for everyone, why would it be different for Spotify? If you don't like it, you know where the door is.

 

[bushido]

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.

but that's the whole issue Spotify has with Apple. they aren't allowed to promote or link to a website to subscribe to the service from within the App

 

[IJ Reilly]

That's what this all boils down to. How much of Spotify's subscriber base is attributable to iOS? I'm still not sure Apple should be taking a cut of a recurring fee especially when they're not providing any service outside of credit card billing (which Spotify would do themselves in the app if they were allowed).

I don't know whether Spotify has a substantive complaint against Apple, but the point your raise is relevant, particularly because Apple is also a competitor in Spotify's market. The creation of artificial barriers to competition is what antitrust laws are there to prevent, an issue taken especially seriously in the EU.

Also, the spun headline is annoying. Apple did not "set the record straight," they made their own argument in defense of their policies. That isn't the same thing as setting the record straight.

 

[tgwaste]

That's a convoluted analogy. It's more like Spotify is selling CDs on Amazon.com's marketplace and doesn't want to pay Amazon's percent selling fee for the sales.

Nope. Completely WRONG. NONE of the streaming goes through apple servers.

Again for all the SHEEPPLE out there

If I order a product using the amazon app does apple get a cut? Nope
If I order something using the walmart app does apple get a cut? Nope
If I order ANY product shipped to my house using ANY app in the app store does apple get a cut? Nope

Yet with Spotify.. They want a cut.

 

[Michael Goff]

but that's the whole issue Spotify has with Apple. they aren't allowed to promote or link to a website to subscribe to the service from within the App

Which makes sense. Why should they allow apps to advertise going outside of the App Store to pay for things?

 

[tgwaste]

Which makes sense. Why should they allow apps to advertise going outside of the App Store to pay for things?

Tons of apps do that. Apple isn't complaining about any of them

 

[skit911]

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.

But they don't. They allow them to distribute the app on THEIR platform and on THEIR App Store. In reality, using analogies doesn't really cut it. They develop xCode to make apps and update their operating system to provide you more convenient ways to interact directly with your customer. That's why you pay 99 a year. They also provide the most loose wallet-ed customers of any other in the mobile industry. Google, blackberry, Microsoft and Amazon don't even come close to per capita sales. They distribute and promote your app through the App Store THEY RUN and if you don't like it, you can develop for safari, where you can't connect directly with the customers on their lock screen or Notification Center, etc. Only if they open the browser to your webpage can you interact with them...It's that simple

 

[Michael Goff]

Tons of apps do that. Apple isn't complaining about any of them

Examples?

 

[bushido]

Which makes sense. Why should they allow apps to advertise going outside of the App Store to pay for things?

yet they allow free apps / games to have those annoying ads that take you out of the app and into safari where Apple doesn't see any money from either. it's a bit silly

 

[GeneralChang]

but that's the whole issue Spotify has with Apple. they aren't allowed to promote or link to a website to subscribe to the service from within the App

Yes, but I can buy stuff on the eBay app and Apple doesn't pull 30% off of those transactions. I think the op was asking whether Spotify could get their app classified the same way Amazon's or eBay's is.

I mean, I doubt it, but it's a question, and I sure don't have an answer for why not.

 

[mfvisuals]

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.

I believe it is actually 15% now for subscriptions but your description is valid.

However, the thing that most people overlook is the fact that this isn't much different than how Apple makes it money on other apps.

If you buy an app that costs $4.99 as a one time cost, Apple takes their 30% cut and the developer gets the rest.

Spotify isn't a one-time cost app however. You are able to download the Spotify app for free (which doesn't give Apple any money) and then you have to start a subscription to use it.

You can either use a subscription that you've already set up via Spotify's website (which also doesn't give Apple any money) or you can initiate a subscription through the app itself, which uses Apple's App Store subscription features.

It is when using Apple's App Store subscription features that Apple take a cut of the profit. In the case of subscriptions it is a 15% cut. As long as you continue to use Apple's App Store subscription feature, Apple will continue to get a 15% cut.

Essentially, Spotify is requesting that they be able to use Apple's App Store subscription features for free, while no other developer is allowed to do so.

I also find it ironic that Spotify states on their own website that "Apple forces us to apply an additional charge on subscriptions made through iTunes and its App Store. The good news is you don’t have to pay extra: Paying for Spotify through Spotify.com instead means you’re cutting out the pricey middleman and coming directly to us."

In reality, Apple isn't forcing Spotify to do anything. Apple is requiring compensation for the use of a service that Apple provides, which is the same requirement it puts on all other developers. Spotify is choosing to raise the price of their subscription service initiated through Apple's App Store subscription features to offset that 15% cut that Apple is taking from their profits.

Spotify's recommendation has nothing to do with "cutting out the pricey middleman" and is not designed to help the consumer. They just want 100% of the profits for their service 100% of the time regardless of the method of distribution.

Sorry, Spotify. It doesn't work like that. Go have your tantrum somewhere else.

 

[lolkthxbai]

I feel like Spotify should pull out of the Apple App Store completely. I have a feeling the result would backlash on Apple and not on Spotify. Android owns the mobile market anyways. If anything, it would make more people switch to Android. Anytime you get in between a person and their music, your asking for trouble.

I wonder if that would just cause more people to use Apple Music

 

[jeffe]

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

Apple will eventually close that loop hole and only allow app installs through the app store.

 

[Michael Goff]

yet they allow free apps / games to have those annoying ads that take you out of the app and into safari where Apple doesn't see any money from either. it's a bit silly

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