Apple Says Spotify Seeks to Keep All Benefits of App Store Without Making Any Contributions to Marketplace

[MacRumors]

Apple today responded to Spotify's recent complaint with the European Commission over its App Store practices in a press release, referring to it as "misleading rhetoric." Apple adds that Spotify "seeks to keep all of the benefits of the App Store ecosystem" but "without making any contributions to the marketplace."

The intro of Apple's press release:

We believe that technology achieves its true potential when we infuse it with human creativity and ingenuity. From our earliest days, we've built our devices, software and services to help artists, musicians, creators and visionaries do what they do best.

Sixteen years ago, we launched the iTunes Store with the idea that there should be a trusted place where users discover and purchase great music and every creator is treated fairly. The result revolutionized the music industry, and our love of music and the people who make it are deeply engrained in Apple.

Eleven years ago, the App Store brought that same passion for creativity to mobile apps. In the decade since, the App Store has helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the App Store ecosystem.

At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make. And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules.

That's how it should be. We want more app businesses to thrive -- including the ones that compete with some aspect of our business, because they drive us to be better.

What Spotify is demanding is something very different. After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem -- including the substantial revenue that they draw from the App Store's customers -- without making any contributions to that marketplace. At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it -- even going so far as to take these creators to court.

Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we've built and what we do to support independent developers, musicians, songwriters and creators of all stripes.

Apple goes on to rebut each of Spotify's accusations listed on its Time to Play Fair website on a point-by-point basis.

Apple says the only time it has rejected Spotify app updates is when Spotify has tried to sidestep the App Store rules. Apple also says it has reached out to Spotify about Siri and AirPlay 2 support on several occasions and approved the Spotify app on Apple Watch with the same process and speed as any other app.

Apple adds that "Spotify wants all the benefits of a free app without being free," noting that the "majority of customers use their free, ad-supported product, which makes no contribution to the App Store."

Spotify wouldn't be the business they are today without the App Store ecosystem, but now they're leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that's wrong.

Apple says the only requirement for developers is that any digital goods and services be purchased inside the app using Apple's in-app purchase system. Apple takes a 30 percent cut of revenue for the first year of an annual subscription, but says Spotify left out that it drops to 15 percent in the years after.

Apple concludes by saying it shares Spotify's goal of sharing music but has a different view of how to achieve that goal. Apple takes aim at Spotify "suing music creators" after a decision by the U.S. Copyright Royalty Board requiring increased royalty payments, calling it "just wrong," although Spotify already disputed that allegation.

Article Link: Apple Says Spotify Seeks to Keep All Benefits of App Store Without Making Any Contributions to Marketplace

 

[omihek]

Apple is right.

 

[Cosmosent]

I am NOT defending Spotify, but the iOS App Store is in-deed Catastrophically Broken !

AAPL Controls the Narrative, & does so to the tune of 100% !

AAPL makes their App Recommendations based-upon "Politics," NOT which apps are best for their Users.

The list goes on & on ...

"App Discovery" of good apps is NON-existent !

How much search filtering does AAPL offer ??? that one is easy to answer, except for keywords, Zero !

AAPL hit $1T USD in market cap last year ... yet, exactly how many (major) App Success Stories have occurred for apps that started life since Cook took over ... I know of NONE !

 

[omihek]

I am NOT defending Spotify, but the iOS App Store is in-deed Catastrophically Broken !

AAPL Controls the Narrative, & does so to the tune of 100% !

AAPL makes their App Recommendations based-upon "Politics," NOT which apps are best for their Users.

The list goes on & on ...

"App Discovery" of good apps is NON-existent !

How much search filtering does AAPL offer ??? that one is easy to answer, except for keywords, Zero !

AAPL hit $1T USD in market cap last year ... yet, exactly how many (major) App Success Stories have occurred for apps that started life since Cook took over ... I know of NONE !

I agree that the apps Apple features are often not the best apps available, but I would say it is up to the developer to market their apps. The $99/year developer fee basically let's you publish your apps on the App Store, nothing else. Anything Apple does to help you sell your app beyond that point is just a bonus.

 

[chopdog]

Neither is right.
Apple - how can Spotify ‘contribute’ exactly? It doesn’t say. What do they want - homemade cake on a Friday afternoon?

Spotify - your software has to live on their competitors platform. If Google Play was a success, you would have the same issue. It will always be hostile. No way around that.

This is two money making enterprises trying to butt heads to make more money from the other.

 

[developer13245]

The only solution is to open up the iOS platform so developers can sell directly to end users, or through other 3rd party app stores. This works on the Mac platform, so there is no technical reason iOS cannot also work this way.


Also see:
https://forums.macrumors.com/thread...store-meeting-with-select-developers.2132523/

 

[makitango]

I agree with most what Apple said, but Apple did for quite some time not provide a fair and logical platform with this card-based junk interface where smaller developers are just plain invisible unless you clicked a lot of times to even get them in sight. You also cannot trust apps anymore. They used to get tested not only for their content, but also for stability and integrity. Now they‘re tested for... what exactly, before they are allowed into the App Store?
Apple had a curated but good working system in place once it all started, but now it is so greyed out. If they want so much to delve into services, maybe they should first restore their existing ones to the great standards they once had.

 

[sully54]

Spotify: we shouldn’t have to pay a 30% tax

Apple: ummm...you’re basically not.

 

[ksec]

Spotify has every right to determine their own business model,

That is not entirely accurate when you have a business ( Apple Music ) competing against another business with the same baseline cost and additional advantage of non 30% cut. This is perfectly fine in market like US. But I doubt this will sit well in EU. Which is where the complaint is launched.

This isn't the same as Apps, where you could have less developers, or cheaper developers from different countries, the baseline cost are hard to determine. And the productivity and creativity of every individual are hard to measure. But Streaming Music, most of those cost are in Payment to labels. And it would not be hard to justify this cost in court. Again, this would not sit well with EU.

This is an Anti-Competitive advantage, it was all perfectly fine until Apple decide to launch Apple Music. Which I have been saying for years should not have happen in the first place.

 

[Ruggy]

It's a store, it takes things from the manufacturer/distributor and makes them available to the general public for a cut.
It's the same thing as someone like Walmart does and Kraft or Kelloggs might not like Walmart taking their cut, but it's almost the same thing.
You might think the difference is lack of competition, but the big stores have so much power they dictate terms to the suppliers and sometimes even make them pay to be allowed to have shelf space, so not so very different.

 

[iSayuSay]

Well that’s the hard part of being Spotify. It belongs to no one and is a small player, relatively. It doesn’t belong to Google either and it lives 99% off customers subscriptions and ad supported listening.

If GPM turns out a big success, I believe google would do the same thing to Spotify, making its life on the Play Store unreasonably hard and annoying, maybe even more so than Apple.

Apple doesnt want Spotify sideload their subscription in the app while enjoying free promotions through AppStore. Instead like everybody else, pay 30% or charge the price up to negate the cut.

If it’s too expensive then it’s customers’ loss for not researching nor go directly to Spotify.com. It’s a third party service, it’s normal if Apple doesn’t let you walk in into its core business (Siri integration etc)

 

[sundog925]

SPOTIFY>apple music.

better algorithms, UX, voice search...need i go on?

ok.

free hulu...showtime....you get it

 

[SteveW928]

re: "And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules."

Well, we know that isn't true due to the fairly recent Facebook debacle. Any other developer wouldn't have just had a tiny 'slap on the wrist' with their accounts partially froze for a day or two. They'd have been booted from the store. But, Apple knows if they'd have actually been fair, they'd have to deal with upset users... or gasp, potential lost some sales. So, FB is right back at it.

 

[developer13245]

re: "And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules."

Well, we know that isn't true due to the fairly recent Facebook debacle. Any other developer wouldn't have just had a tiny 'slap on the wrist' with their accounts partially froze for a day or two. They'd have been booted from the store. But, Apple knows if they'd have actually been fair, they'd have to deal with upset users... or gasp, potential lost some sales. So, FB is right back at it.

Even better: If you're a large company like Uber, you can willfully violate Apple's privacy rules - and even willfully build in methods to avoid detection.

Smaller developers have been barred from the app store for making honest mistakes. But the Uber CEO will was invited to a "sit down" with Tim Cook. Such behavior is the exact definition of a "Tech Mafia". "Timmy the Cook"

This statement is a huge bald faced lie: "And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules."

I've worked at both very small and very large companies that develop iOS apps, and also as a small independent. Apple treats smaller developers unfairly, and I have witnessed this.

At the large company we were able to get an app update approved in 30 minutes by making one phone call to a person at Apple WHO ANSWERED THE PHONE. The App also was using a non-public API so it was in direct violation of the App Store guidelines.

Apple is ignorant to believe developers don't see this. People move around and share stories.

 

[Shoju]

This is two money making enterprises trying to butt heads to make more money from the other.

Exactly. Which is why it’s quite a little upsetting that a Twitter account run by a German governmental entity blindly echoes what Spotify’s CEO puts on a slide..: https://twitter.com/Kartellamt/status/1106149657498058754

 

[AppleTrap]

Apple charges 99$ a year to host an app on its platform. What is this charge for? To cover hosting fees?

Then Apple charges 30% of every sale Spotify makes. What is this for? I can't imagine hosting charges to be that high. And Apple makes no contribution to the development of Spotify and its products.

Sure it is Apple's platform and they can do whatever they want with it. But are they being fair?

 

[rjp1]

30% is extremely high for hosting a tiny amount of static content in the app store and providing a download. The big thing is this is the only way to get apps. Is that worth 30%?

As consumers, we bought and own the devices. Therefore, we should be able to use them however we want. If that means installing from a 3rd party app store or directly from a developer's website, then so be it. Let us check a box saying we understand that doing so may result in a degraded experience and/or require wiping the device to get technical support, but don't flat out prevent us from doing so.

For businesses, they should be given the chance to compete. The cost to store the data for an app store is small. The cost for providing downloads is small. If someone wants to do an app store and only take 10% or whatever, then they should be given the chance. If Apple is so confident in the value they are providing developers, then it won't matter that there is competition.

The reality is they are abusing their power with the 30%. They could raise it to 90% tomorrow and developers would just have to deal with it. This is the only way to distribute their apps, so they will take some money over no money. I welcome the breakup of stuff like this.

The phone/tablet/whatever is just a computer. Nobody would tolerate this nonsense if Windows didn't allow you to download a program outside of their store. Just because "phone" - doesn't make it right.

 

[tann]

Ridiculous that they have arbitrary rules like digital items require purchasing through IAP... why? Because then Apple get a cut for nothing.

If you look into this case it's rife with anti-competitive behaviour. Especially true now giving Apple has their own direct competitor that does indeed have unfair advantages.

 

[iSayuSay]

SPOTIFY>apple music.

better algorithms, UX, voice search...need i go on?

ok.

free hulu...showtime....you get it

Spotify’s UI is acquired taste. I personally not a fan of black/green color scheme.

Voice search of what? Siri doesn’t do spotify search. But I agree spotify has the edge on music selection

Free hulu bundle is a frail relationship, simply a marketing joint that can go down anytime, and it’s US only while the majority of spotify userbase is outside.

Remember musixmatch X spotify for lyric feature? Well it was gone

 

[Pakaku]

At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it -- even going so far as to take these creators to court.

Okay then, how big of a revenue cut does Apple Music give the artists?

 

[Rogifan]

If Apple deserves something for access to a customer base with disposable income why does the company allow any free apps on the App Store. Why doesn’t every app cost something with Apple getting a cut of that sale?

Basically Apple’s argument is they provide the lucrative customer base therefore they should get a cut. OK then why is their cut limited to digital goods? How come Apple’s so-called tax only applies to products and services it is in direct competition with? Why is fair for Spotify to give 30% or 15% of subscriptions purchased in-app but not for Uber? Who cares whether the product or service is consumed on Apple hardware?

 

[rockarollr]

Apple has no problem paying the artists, the creators of the music, a fair sum. Musicians have a right to earn a decent living just like anyone else with a special talent, profession or trade.

This is one of the primary reasons I subscribe to Apple Music instead of Spotify.

 

[charlituna]

Apple charges 99$ a year to host an app on its platform. What is this charge for? To cover hosting fees?

That fee is for access to a betas, a vast library of documentation and even persons to help you create your app.

Then Apple charges 30% of every sale Spotify makes.

not exactly. It’s only for sales that are charged via Apple’s system, and it’s only 30% for the first. Anyone who renews it drops to 15%.

 

[derekamoss]

At this point I'm not sure I can actually believe anything that comes out of Apple PR. I'm sure this wasn't just a rash response to make Spotify look bad after spotify steam rolled Apples showtime event by giving spotify subscribers a free account to Hulu. $9.99 for Apple music you get to listen to a ton of music whenever. $9.99 for Spotify you get to listen to a ton of music AND binge watch a bunch of old shows and watch current running shows....

 

[rajat8676]

Sounds so similar to EU scolding UK on Brexit!