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

[Abazigal]

That is not what checks I am talking.

Without divulging into specifics, Apple can still hold your app from release due to a myriad of asinine reasons even when you comply with their rules.

It hardly has much to do with policing, as you seem to call it.

Without any specific details or context, it becomes “he said, she said”. Apple could have withheld your app update for any number of legitimate reasons, even as the developer claims it is unreasonable or arbitrary (we really have no way of ascertaining this).

Won’t be the first time the arsonist cried “fire”.

On another note, Spotify claims that the 30% cut is what is forcing them to change higher prices. In this case, since the cut drops to 15% in subsequent years, why are repeat customers still paying the full $13 in year 2? Why haven’t they seen their fees drop to $11.50 to reflect the lower rates that Spotify has to pay out?

 

[weckart]

Thoroughly sarcastic response, but predictably empty. And it indicts you as much or more than me, because while the EY regulators certainly know more about their laws than I do, they know more than you. And you’re the one who brought up the topic by crying that Apple was being unfair.

I am correct in that charging 30% as a retailer isn’t unfair or illegal. Neither is having a better business model than your rivals. You seem convinced that wrongdoing is afoot, yet offer no examples of anything Apple is doing that is patently unfair or illegal. Nice try, son.

I think a course in remedial English might help. I haven't actually taken a side with this save for my swipe at Apple's virtue signalling. You on the other hand brought up a strawman argument, compounded it with another one implying that I was setting myself up as a legal authority in your response above and repeated your first strawman.

Here's my example. https://www.macrumors.com/2019/03/13/spotify-files-complaint-vs-apple-in-europe/ You should find details within. In case you weren't abreast of the news, Spotify raised the topic of Apple's allegedly being unfair by referring Apple to the EU Commission; I had nothing to do with it.

If you care to read the article within, you will see that whether Apple charges 30% for apps within isn't the key issue here. It's what happens when you adapt your apps so you avoid the 30% charge. Spotify thinks Apple is playing dirty and doing what it can to avoid fair competition. That is most likely what the Commission will focus on. Perhaps rather than boring on about business models, it might be something that the Commission is better equipped to investigate. It usually gives a damn about the consumer so presumably Apple will have thought its business model through. Or maybe not. It has been found wanting in the past.

By the way, Google doesn't charge Spotify anything in the UK for in-app purchases. Must be an Apple speciality.

 

[ipponrg]

Without any specific details or context, it becomes “he said, she said”. Apple could have withheld your app update for any number of legitimate reasons, even as the developer claims it is unreasonable or arbitrary (we really have no way of ascertaining this).

There is a reason specifics can’t be divulged. But fair point given your lack of knowledge and experience with the submission process.

 

[BuffaloTF]

PLus Apple Music comes pre-installed on Apple devices which is like MS packaging Internet Explorer with Windows and shutting out Netscape back in the day.

Not the same. Netscape cost $50 in a box.

Internet Explorer came for free.

Netscape's argument was they killed their business. They did. Literally. Netscape exited the space entirely and offered up Navigator for free to an unknown Open Source company called Mozilla. It was turned into Firefox.

 

[dilbert99]

What would you rather Apple do?

What if Apple Music wasn’t priced at some other figure like $5? What if Apple gave it away for free?

No matter how much spotify charged, they would still have to give Apple their cut (be it 30% or 15%), which brings us back to the original problem.

I don’t believe the solution should be for Apple not to have its own music streaming service either.

And if Spotify were allowed to use their own billing service, then they are effectively using Apple’s platform for free.

Curious.

I look at it from a different point of view. A manufacturer should not really be trying to compete on its own platform. Apple could appease this by charging a more appropriate fee for services.

There are probably lots of models that Apple could apply. I just feel the current one while good for small developers is not appropriate for large developers.

Another way to look at it is if you bought your groceries via an app, you wouldn't want Apple taking any amount over say 1/2-1% because the margins for groceries are razor thin.

Also about billing platform, like you said in a previous comment, Apple should not be taking a large cut after the first year because they are adding little value for big players.

That is why netflix took billing out of the app store - a choice I agree with. I stopped my subscription to netflix via the app store and did it direct because I would rather that Netflix got the full amount to make the service sustainable and get better content, ven though I lost the ability to pay less using discount itunes vouchers.

 

[Abazigal]

I look at it from a different point of view. A manufacturer should not really be trying to compete on its own platform. Apple could appease this by charging a more appropriate fee for services.

There are probably lots of models that Apple could apply. I just feel the current one while good for small developers is not appropriate for large developers.

The main issue here is that Spotify’s business model is already unsustainable to start with. Apple’s cut might be one of a dozen cuts, but it’s not the main problem currently plaguing Spotify.

Basically, Spotify wants control, and it’s not going to be happy with having to pay any amount more than 0%. So any discussion on what a “right amount” is would be pointless, IMO.

Another way to look at it is if you bought your groceries via an app, you wouldn't want Apple taking any amount over say 1/2-1% because the margins for groceries are razor thin.

With apps, you basically invest time and effort in coding your app once (a one-time fixed cost), and then it doesn’t you anything extra to distribute it. Yes, you have to continue supporting it, but these are costs independent of the number of copies of the app sold.

It’s a different business model from selling physical goods which cost money to make, and which would thus incur costs proportional to the number of units sold.

Again, Spotify is the main outlier here because of the manner in which it incurs its costs, so I fail to see why Apple ought to be held liable for a poor business decision on another company’s part.

And after the whole google maps fiasco, I feel that Apple is not unjustified in wanting to have their own first-party versions of apps and services deemed critical to their platform. This way, they have a backup in case companies like Spotify or Netflix ever decide to try and play punk for any reason, and withhold critical features or updates in the hopes of trying to extract more concessions from Apple.

Also about billing platform, like you said in a previous comment, Apple should not be taking a large cut after the first year because they are adding little value for big players.

I agree. What do you think is a reasonable number? 5%? Because like I mentioned above, Spotify is not going to want to pay anything beyond a nominal fee for payment processing.

That is why netflix took billing out of the app store - a choice I agree with. I stopped my subscription to netflix via the app store and did it direct because I would rather that Netflix got the full amount to make the service sustainable and get better content, ven though I lost the ability to pay less using discount itunes vouchers.

Perhaps I should too.

Done. Cancelled my Netflix subscription in iTunes and have re-subscribed via the website.

It’s funny though. I have never seen iTunes cards being offered on sale in my area. Would have snapped them up in a heartbeat.

 

[garylapointe]

Or to put it another way, just because Apple is wrong doesn’t mean Spotify is right.

I lot of people don't get this concept, just because I think someone or something is wrong and I disagree with it, that doesn't mean I'm all for the other side.

Someone can be wrong and it's irrelevant of me thinking the other side is correct, wrong or neutral. I just think they're wrong.

 

[Kabeyun]

I wonder if a brick and mortar analogy works. Suppose an entrepreneur was selling bottled shampoo out of a booth and wanted to increase business by selling through Walgreens Pharmacy. Would it be improper for Walgreens to charge a fraction of each sale for the benefit of better exposure by associating with their brand and customer base? That fraction would also pay Walgreens for maintaining stock, swappingnout wxpored bottles, and managing sales transactions.

Of course, that fraction would have the effect of making the Walgreens-sold bottles more expensive than booth-sold bottles. Is that unfair to the shampoo maker? Could/should Walgreens be forced to sell shampoo at the same price the maker was still selling it out of a booth?

Someone please point out the problems with this brick & mortar analogy. Might it be that Walgreens is the only way for some customers to buy shampoo, so they couldn’t buy it from a booth?

 

[marco114]

If I buy a burrito at Chipotle, or chicken at Chick Fil a, is apple taking 30% of that sale too? Most restaurants don't even have that kind of markup!

 

[sidewinder3000]

I think a course in remedial English might help. I haven't actually taken a side with this save for my swipe at Apple's virtue signalling. You on the other hand brought up a strawman argument, compounded it with another one implying that I was setting myself up as a legal authority in your response above and repeated your first strawman.

Here's my example. https://www.macrumors.com/2019/03/13/spotify-files-complaint-vs-apple-in-europe/ You should find details within. In case you weren't abreast of the news, Spotify raised the topic of Apple's allegedly being unfair by referring Apple to the EU Commission; I had nothing to do with it.

If you care to read the article within, you will see that whether Apple charges 30% for apps within isn't the key issue here. It's what happens when you adapt your apps so you avoid the 30% charge. Spotify thinks Apple is playing dirty and doing what it can to avoid fair competition. That is most likely what the Commission will focus on. Perhaps rather than boring on about business models, it might be something that the Commission is better equipped to investigate. It usually gives a damn about the consumer so presumably Apple will have thought its business model through. Or maybe not. It has been found wanting in the past.

By the way, Google doesn't charge Spotify anything in the UK for in-app purchases. Must be an Apple speciality.

I was up to speed on this story the moment it launched, thanks. My issue with your post was mostly the fact that rather than speaking of Spotify’s claims as what they actually are, allegations that have yet to be adjudicated, you spoke of them as settled fact, writing that Apple was guilty of “unfair business practices” as if that were something other than a claim made by a competitor who’s not making much money. You were also incredibly sarcastic for no good reason.

Apple isn’t perfect, and when they overstep they should be corrected, like all companies. But stating these allegations as fact doesn’t make them so.

And as far Google not charging Spotify for subscriptions in the UK, are you sure? If so, it might just be a UK thing. Because Google Play charges exactly what Apple does in the US and elsewhere. And they only lowered their fees after Apple did.

https://www.theverge.com/2017/10/19...roid-apple-app-store-subscription-revenue-cut

In other words, what Apple does is not some unique, Machiavellian scheme. It’s fairly standard retail business. When smaller companies sell stuff via the Amazon marketplace they don’t get to use their own payment systems to avoid paying Amazon. It’s Amazon’s party, and they play by the rules of their marketplace. If a company don’t like the rules they are free to create their own makertplace. Same is true of Walmart, Etsy, EBay and most digital retailers. Hell, even a vendor in an Antique Mall has to pay a percentage to the house. That’s just. How. It works. The fact that everyone is getting their undies in a bunch over a retailer wanting to be compensated when they deliver customers to an app maker is laughable.

Apple’s press release is worth a read and it’s entirety:
https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/

 

[derekamoss]

So glad they came out with such a clear-headed and unambiguous response so quickly. That is one well written, fair, and potent press release.
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So nice to read someone who gets it, rather than seeing another post petulantly complaining that companies in a capitalist system are acting in their own self interest to gain competive advantage over their rivals. The nerve!
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The Hulu/Spotify thing is a promotion, and it doesn’t feel sustainable to me.

Also, if Spotify is whining about Apple taking 30/15% cut, how must they be bellyaching about having to share revenue with Hulu? That’s got to be as much as 30-50% depending on which door the customer came through.
[doublepost=1552719669][/doublepost]

You are badly misinformed if you believe that Apple is going into the streaming video business with nothing but Carpool Karaoke. The truth is, in fact, the opposite of what you said. That was a small experiment they did to have programming that would mesh well with Apple Music. They have dozens and dozens of shows in development being made by the biggest names in showbiz: Spielberg, Fincher, Withesooon, Carrell... the list goes on and on.

Also, the Hulu deal is a temporary promotion. There is nothing guaranteeing that it will be around in a year. Or that either company will still be solvent.

In Development is the keyword. People don't put their money somewhere that they aren't sure what they are getting out of it. The Carpool comment was sarcasm, I'm well aware of the content they have in production, what I am unaware of is any of the content is worth adding ANOTHER subscription fee to view their movies and tv shows when I already have Netflix, Hulu and Spotify and a Movie store if I want to purchase a movie. On top of that I will probably buy the Disney service for the Marvel and Star Wars content and the plethora of Disney content for the kids. Put all that on top of my Cable service and my line is drawn unless their is something compelling beyond belief. I think this is probably how almost everyone feels right now. Apple is going into a market no one needed them too and where they aren't creating something to disrupt it.

 

[sidewinder3000]

In Development is the keyword. People don't put their money somewhere that they aren't sure what they are getting out of it. The Carpool comment was sarcasm, I'm well aware of the content they have in production, what I am unaware of is any of the content is worth adding ANOTHER subscription fee to view their movies and tv shows when I already have Netflix, Hulu and Spotify and a Movie store if I want to purchase a movie. On top of that I will probably buy the Disney service for the Marvel and Star Wars content and the plethora of Disney content for the kids. Put all that on top of my Cable service and my line is drawn unless their is something compelling beyond belief. I think this is probably how almost everyone feels right now. Apple is going into a market no one needed them too and where they aren't creating something to disrupt it.

You’re commenting on their ability to disrupt the market before they’ve even made an anouncement? I’ll wait to see what they’re offering before making broad predictions.

 

[bobmepp]

SPOTIFY>apple music.

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

ok.



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

The 10,000 song (track) library limit on the premium version is a ripoff and nullifies any other Spotify advantage. Any music lover can exceed this in no time. My AM library is at 62,000 songs (tracks) and counting. I have no idea what the upper limit is.

 

[derekamoss]

You’re commenting on their ability to disrupt the market before they’ve even made an anouncement? I’ll wait to see what they’re offering before making broad predictions.

Content alone won't disrupt the market. If that was all that was going for Netflix, Hulu, or Spotify when they launched they would have failed to. Unless Apple has a subscription plan that includes Apple Music, streaming tv shows and movies from all major production companies, and a knockout line of new media for like 9 dollars a month, it will be just another subscription service with an unknown track record. There will always be the people who buy it because its the next best Apple thing but that wont alone be enough to sustain it. Especially if they do something like make it to where you have to have an Apple TV for it to work which wouldn't surprise me.

 

[sidewinder3000]

Content alone won't disrupt the market. If that was all that was going for Netflix, Hulu, or Spotify when they launched they would have failed to. Unless Apple has a subscription plan that includes Apple Music, streaming tv shows and movies from all major production companies, and a knockout line of new media for like 9 dollars a month, it will be just another subscription service with an unknown track record. There will always be the people who buy it because its the next best Apple thing but that wont alone be enough to sustain it. Especially if they do something like make it to where you have to have an Apple TV for it to work which wouldn't surprise me.

Content does matter. That’s why HBO has ruled TV for 25 years. And Disney is positioned to be a gangster in streaming. But certainly true disruption does require something beyond just content.

The truth is we we really have no idea what Apple will announce on the 25th, or what their model will be. Hardware is simpler for rumor sites to predict because of Chinese manufacturing. But software and services are easier to keep private. So we’re in the dark. I imagine Apple will have a plan that leverages their built-in market advantages in a way that will cause a bit of consternation amongst the other streamers. But that’s just a hunch. We’ll see. Until then, it’s nuts to judge.

 

[derekamoss]

Agreed can't judge at this point. Only have our own opinions and be able to debate them. Honestly, I'm not gunning for Apple to fail, I might be a little aggravated if it does disrupt the system and has must see content because I'll have to add another subscription and invest more money lol. The only part of me wanting it to not be big is my wallet because even now I am tempted to more dubious means(torrenting) but since I believe artists should get paid.... Stupid conscience! =)

 

[elmateo487]

Apple Music is in direct competition with Spotify. So Apple are now sitting on a platform where by everyone else either makes 30% less or is priced 30% higher than your own offering.

Pretty nifty way of stifling competition.

You act like Spotify users can't pay for their platform outside of the ecosystem. They can, it is not REQUIRED to pay via the app store. It is just that if you do it, it will cost 15-30% more. And why? Because it costs money to run the app store, and not just that. It is a business, and businesses have to make money.

This whole thing is the dumbest argument ever. Just go to spotify's website, sign in, pay for your account, go to the iOS app, log in... THEN NEVER THINK ABOUT IT AGAIN.

Apple doesn't get a 30% cut.

But wait, there is more! If you want to pay using Apple's ecosystem? Well guess what! You have to pay Apple! Such a novel concept.

 

[thequietaussie]

You act like Spotify users can't pay for their platform outside of the ecosystem.

I'm well aware that Spotify users can purchase outside the App Store, and indeed, are now required to do so as they don't allow direct signups from iOS anymore.

And why? Because it costs money to run the app store, and not just that. It is a business, and businesses have to make money.

Not debating that, though I will point out that Apple made 14 billion dollars in app store revenue in 2018 alone. They're hardly struggling for money to pay for those servers.

Nobody has said Apple shouldn't charge anything for the app store.

Apple doesn't get a 30% cut.

Yes exactly, so now the big players are all removing the option to pay through the app store and hoping people will take the hint and sign up on their website directly, as Apple explicitly forbids informing users that they can pay outside the app store.

All of which renders this policy absolutely pointless and just makes the process of signing up with the big players more cumbersome than it needs to be.

 

[elmateo487]

I'm well aware that Spotify users can purchase outside the App Store, and indeed, are now required to do so as they don't allow direct signups from iOS anymore.

You are not REQUIRED to do so. You can always sign up via spotify's website.

Nobody has said Apple shouldn't charge anything for the app store.

Yes, that is exactly what Spotify is asking. They want to pay ZERO dollars to Apple. Think about it, what you are asking Apple to do, is to allow other payment methods OR free Apple payment methods for content inside their ecosystem. Which means.... Apple would make zero dollars on ANYTHING. Every app would become free, and every app would have features unlocked inside of it via paypal. SURELY you are suggesting something better than that.

Humor me. What ARE you suggesting? An exception for Spotify specifically? Well that obviously won't work. That all subscriptions don't take 30%? Well that won't work either, because all content would just become lifetime subscriptions for the cost of the app.

All of which renders this policy absolutely pointless and just makes the process of signing up with the big players more cumbersome than it needs to be.

So you are bothered that it is cumbersome? Its literally a one time process.

 

[thequietaussie]

You are not REQUIRED to do so. You can always sign up via spotify's website.

Spotify doesn't allow in-app-purchases for subscriptions anymore. You are therefore required to sign up via Spotify's website.

They want to pay ZERO dollars to Apple.

Which they already are, effectively. Along with Amazon and Netflix. Apple are already getting $0 from these companies, so the policy clearly isn't working.

What ARE you suggesting?

There are a bunch of different things Apple could do, including, but not limited to:

- Charging a much higher yearly fee, like say, 100k? 1 mil? While dropping the payment processing fee to something you would see from a typical payments provider (1-3%) or allowing players at that size to offer their own in-app billing. Or both.

- Having a payment scale that works on total revenue processed through the App Store. 30% at the bottom, something more reasonable that would keep Spotify and others happy at the top.

So you are bothered that it is cumbersome? Its literally a one time process.

A one time process that developers cannot tell their customers about.

 

[2979382]

The app stores (both Android and iOS) were a good idea until they weren't. If you think what can be achieved today with a PWA and some WebAssembly modules, the possibilities of running complex applications in the browser are next to endless. The large majority of iOS apps out there can be turned into a PWA no problem. I get what Apple is trying to do, but there comes a point in time where that business model just doesn't work any more and actually starts biting them in the arse. This is that time.

 

[developer13245]

Very true, but sadly this happens in every industry.

Also, regarding Uber, unfortunately Uber is in a position where it can kind of dictate. No way Apple could have pulled their app and not paid a price. At this point Uber is a necessity for many people (drivers and passengers). Apple doesn’t want to be known as the phone where you can’t use Uber or Facebook. Sometime you have to dance with the devil - this applies to Apple and the developers.

Well ok, but then you must admit this part of Apple's statement is horse pucky:

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

The fact that they actually include the text "first-time engineers to larger companies" is jaw dropping because I've worked on apps across that range and have noticed the exact opposite. In fact, while working on a app for a fortune 100 company I witnessed a call to Apple from a project lead informing them the app was submitted with restricted APIs - the app was in the store in 30 minutes WITH the restricted APIs.

Again, who does Apple think they are fooling?

 

[dilbert99]

What would you rather Apple do?

Play on a level playing field

What if Apple Music wasn’t priced at some other figure like $5? What if Apple gave it away for free?

Is that a level playing field?

No matter how much spotify charged, they would still have to give Apple their cut (be it 30% or 15%), which brings us back to the original problem.

That the playing field is not level and Apple forces companies to use Apples subscription services, even if the company has their own subscription services.

This is not a level playing field.

I don’t believe the solution should be for Apple not to have its own music streaming service either.

It is fine for Apple to have their own music service, but if they also own the platform then abuse of power shows through like forcing companies to use Apples subscription service.

And if Spotify were allowed to use their own billing service, then they are effectively using Apple’s platform for free.

Curious.

That is incorrect. If Spotify use their own subscription mechanism and their own payment gateway then Apple is not providing that service.

If Spotify offer a subscription button on Mac OS Apps is that ok with you?

 

[SteveW928]

The fact that they actually include the text "first-time engineers to larger companies" is jaw dropping because I've worked on apps across that range and have noticed the exact opposite.

Or, the fact that if any small to medium developer did some of the things that Facebook and Google did, they'd 'never work in this town again.'