Card processing, fraud protection, consumer confidence that it will be easy to cancel, staff to review and approve apps, etc...
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple Says Spotify Seeks to Keep All Benefits of App Store Without Making Any Contributions to Marketplace
- Thread starter MacRumors
- Start date
- Sort by reaction score
Card processing, fraud protection, consumer confidence that it will be easy to cancel, staff to review and approve apps, etc...
Agreed. So so agreed. It makes it easier for me to trust the app and trust with my personal information.
The rules were in place long before Apple had their music subscription service, but let's not let facts taint your narrative.
It's their eco system that they built and own. And that's not an "Apple Rulez" argument. Truth be told, I'm quite cynical towards apple these days. It's kind of like going to see a movie at a movie theater and they tell you that you can't bring in any out side food and drinks but then charge you an arm and a leg to buy theirs. Sure it's crummy... They've eliminated competition and are capitalizing on it by ratcheting up the margins to make a killing on refreshments. BUT, you don't have to buy popcorn... you don't have to go to the movie theater... you don't even have to watch movies at all, but many people still go. They like the atmosphere the movie theater provides. They like the experience and the memories it creates. Sure people complain, but they also realize it's part of the package and has a net benefit, otherwise they wouldn't do it.
In Summary... The app store is like a movie theater, and the apps are the popcorn. Delicious and functional, but oh so expensive.
The rate set by the Copyright Royalty Board... 15%.
[doublepost=1552674795][/doublepost]
15%.
And yes, yes they would be charging themselves. That's how corporations work. Departments within a corporate entity charge each other for the services they provide internally. Each department has a budget. They're called Cost Centers and Profit Centers in the corporate world.
What seems to be forgotten amongst all this discussion is that Apple used to outright reject apps that competed with theirs. The first round of calculator and note apps in 2008 were all rejected because they "duplicated features of built-in iPhone functionality". No one really cared back then (except the developers of said apps) because the app store was small. Now that Apple has money and public mindshare, everybody wants a piece.
I agree with your analogy until the end. Apps aren’t expensive at all. Most are free. Many others are under $5. And the same people who don’t want to buy a $5 app will then spend $50 on IAP in the very same app they would refuse to pay money up front for.
The real summery here is that people are often irrational, contradictory and don’t make sense for a host of reasons.
But let’s get one thing damn straight......APPS ARE NOT EXPENSIVE. People spend waaaay more money daily on random stuff in comparison to an app.
That's not at all similar. Apple is collecting the funds for Spotify subscriptions. They're the ones transacting -- Consumer is buying Subscription through Apple. Apple is sending funds to Spotify for the transaction. There are costs associated with that. And when you're a service provider, you charge for your services. In this case, it's 15%.
An Uber ride is charged through Uber. Uber is collecting their own fees at their own cost, then passing the corresponding rate to the driver. Uber is charging the driver for THEIR service. The driver is the product, Uber is the middle man doing Apple's role in your analogy.
[doublepost=1552675466][/doublepost]
They do... on every single item sold through the Windows Store or the Xbox Store.
Whoops.
True, and I think the analogy still works if the context is of the original poster feeling like the App store is limiting access to competition. Expensive in this case wouldn't just be in terms of raw dollars spent on apps, but also of the opportunity costs of not having access to "competitor apps" outside the apple eco system.
It's 15%. You know, the exact same amount they pay to Blackhawk Networks for Gift Cards with their name on it, only usable for their subscriptions. Blackhawk Networks likely charged them a hefty onboarding fee too.
For the first bold item, Apple has only applied the requirement that all payments initiated through the app be subject to the 30% fee to digital items. They don't take a cut on things like Uber rides or sales of paper books through Amazon. Uber generates billions of dollars of revenue through its app and pays Apple nothing based on that revenue. It is arbitrary and strange. For a digital item a developer is required to use in-app purchases or go through an external website (that they can't even mention exists), but for anything else they can't use in-app purchases and are free to use their own payment services directly from within the app. Why should Spotify be expected to pay the market fee and Uber get off scott-free?
That leads to the second bold item. Apple is not consistent in how they allow vendors to accept payments on purchases made through apps. In fact, that is Spotify's exact argument; they are being targeted with more restrictive rules because they operate in a market in which Apple also competes while other companies like Uber are free to use their in-house services to completely bypass Apple. There is no rational basis to have different rules for payments based on the type of goods or services being offered through the app, particularly when the restrictions are effectively mandated only in markets where Apple is a direct competitor.
[doublepost=1552676442][/doublepost]
But Apple actively prohibits Spotify from performing their own purchase and payment processes from within the app like they allow Uber to do. It's not like Apple is providing transactional services that Spotify is requesting, In fact, Spotify doesn't want Apple to be involved in the payments at all, just to have the same opportunity to use their own payments system through the app just like Apple allows Uber to do.
Last edited:
I think Spotify is wrong with one caveat. I object to Apple not allowing apps to provide a web link out to a web site where users can subscribe outside of the App Store. I have always found it to be very annoying that I have to leave the Kindle App to buy a book, and Amazon is not even allowed to post a hyperlink to the web store.
But, with many Apps I would not trust the third party payment services anyway, and so I appreciate paying through Apple's system as I trust it. I actually would not trust Spotify's payment service in part due to their partnership with Facebook.
Fortunately I think Apple Music is a superior product and stopped using Spotify years ago.
But, with many Apps I would not trust the third party payment services anyway, and so I appreciate paying through Apple's system as I trust it. I actually would not trust Spotify's payment service in part due to their partnership with Facebook.
Fortunately I think Apple Music is a superior product and stopped using Spotify years ago.
Last edited:
It's diffcult for Spotify to compete when they get charged 30% the 1st year of a sub and 15% thereafter and Apple Music doesn't.
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.
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.
Last edited:
iPhone was an iPod before there ever was a Spotify. Apple Music is a cloud based subscription interface to what Apple had from day one. Therefore this is nothing like IE on Windows, as Spotify is freely available on iOS and most users do not even subscribe.
Apple provides a proven and secure payment system that iOS users trust and Spotify benefits from those users trusting that service and paying through it when they subscribe. I would not give Spotify my credit card information.
However, I do feel that Spotify should be allowed to link out to their website if customers would prefer to not pay through Apple's service, but Apple's service should be an option and always available.
Apple provides a proven and secure payment system that iOS users trust and Spotify benefits from those users trusting that service and paying through it when they subscribe. I would not give Spotify my credit card information.
However, I do feel that Spotify should be allowed to link out to their website if customers would prefer to not pay through Apple's service, but Apple's service should be an option and always available.
If you're going to use Apple's services and platform, than a fee should be required. If you're going to use Apple as a payment option, than I believe a Fee should also be required.
what that fee is, is likely up for debate. Apple's and even Googles (both the same) are quite high for a payment processor. Visa/Mastercard tend to be in the 2-3% per transaction. Not 30% / 15%
that's money off the bottom line for any company using them. At some point they will question wether it's better for their profit margins to try to use something else, or continue the rates.
if enough companies are opting to go somewhere else, it's indication that your rates are likely now beyond what the market is willing to bear.
it will be interesting to watch if this is a trend that'll continue, with developers speaking out against the rates. Or will we see the biggest revenue makers go elsewhere (Like Netflix is doing)
what that fee is, is likely up for debate. Apple's and even Googles (both the same) are quite high for a payment processor. Visa/Mastercard tend to be in the 2-3% per transaction. Not 30% / 15%
that's money off the bottom line for any company using them. At some point they will question wether it's better for their profit margins to try to use something else, or continue the rates.
if enough companies are opting to go somewhere else, it's indication that your rates are likely now beyond what the market is willing to bear.
it will be interesting to watch if this is a trend that'll continue, with developers speaking out against the rates. Or will we see the biggest revenue makers go elsewhere (Like Netflix is doing)
Your going to have to over turn the decades old Atari v Activison case from the 80’s. It established that businesses must impliment lockout systems if they want to control access to or charge for programs developed on their hardware systems. In short, Apple does not have to design their hardware to provide access to 3rd party developers.
i.e. if you’re going to require Apple to open their hardware or require they allow 3rd party stores you’re going to affect more then just Apple. You’re going to affect everyone else. You’re not going to get Sony, Nintendo, and Microsoft to agree with you.
When iOS allows sideloading of apps, then they can whine about Spotify whining about the cost of putting apps on the App Store. Until then, I'm with Spotify on this dispute.
I've been a PAYING Spotify customer for a long time, and thanks to their long history of excellent cross-platform support, I see no reason to go to the clunkier experience that is Apple Music, and I don't need to stinkin' App Store to convince me to download Spotify, so this silly notion that Spotify has some choice to not use the App Store? HELLO, that's the only way to get an app to an end user on iOS.
I've been a PAYING Spotify customer for a long time, and thanks to their long history of excellent cross-platform support, I see no reason to go to the clunkier experience that is Apple Music, and I don't need to stinkin' App Store to convince me to download Spotify, so this silly notion that Spotify has some choice to not use the App Store? HELLO, that's the only way to get an app to an end user on iOS.
Some of us prefer iOS because they do not allow the sideloading of apps. Clunky UI is in the eye of the beholder I guess.
That is perfectly fine if the market had many choice of Smartphone Ecosystem. I.e You have dozen of retails outlet in your city, It is perfectly fine for WalMart to have their own brand of Ketchup, while charging additional 30% to Heinz Ketchup, or selling it at cost of Ketchup. Consumer had many options to go to other retail outlet.
Not on Smartphones. The whole reason EU cant do much to Apple is because Apple is by no means a monopoly in Smartphone. They only hold ~25% of the total Smartphone market. Their App Store policy is part of a much smaller market.
The problem is Apple Music not only compete against Spotify on its App Store, Apple Music is also competing against them on Android. All of a sudden Apple Music is having a competitive advantage in "Music Streaming Business" due to it being part of Apple.
Again, I suspect this case would be hard to argue for in US.. But that is completely different in EU perspective.
I see both sides. Apple is competing with Spotify directly, but is giving themselves a bunch of advantages (like system-wide integration) that Spotify is not allowed to replicate due to sandboxing, while also charging a pretty high rate to use a payment system (Visa is sub-3%) with no alternative options.
I normally agree with Apple on these things, but it looks a lot like a conflict of interest. Especially given that Spotify's usage of Apple's infrastructure is pretty low (they don't use Apple to deliver any of their content, just the app binary).
I will say that each company is allowed to compete in their own way, and that there's more than one way to skin a cat.
As I mentioned earlier, Apple's whole selling point is in delivering integrated experiences. As such, I really see nothing wrong with Apple integrating their music streaming service into iOS on a system level, or making it available on all their devices. After all, there is no guarantee that Spotify would have done the same (supported all of Apple's devices and services), much less made it work properly even if Apple hadn't done anything. I still don't have a spotify app for my Apple TV.
It's the same logic as to why google maps is that good - because Google's entire business model is built around gathering data, which in turn gives it a structural advance. Something that Apple can never beat, and which it counters by making its own maps app the preinstalled default on all their devices.
I am also reminded of Google's own apps for iOS and long Google often takes to update them to support newer resolutions and the latest iOS features. Gmail till this day still doesn't support split-screen on my iPad, yet it's the only app I can use to access my school's email.
So at the end of the day, from a (admittedly somewhat biased) customer's perspective, I am not interested in seeing Apple being made to compete on a level footing as these competitors. Rather, I am in the Apple ecosystem precisely because I trust Apple to make these decisions for me. By doing this, Apple at least ensures a minimum degree of standard amongst its products. For example, one of the key selling points of the Apple Watch is that it allows you to stream music via cellular on the go. As such, it makes sense for Apple to not only control Apple Music, but that it spare no effort in integrating this service into their own devices so as to make the whole experience as seamless for its users as possible.
Rather than farm this responsibility out to Spotify who, as a third party, is free to screw Apple and its users (by extension) over any time they wish (I still remember the whole google maps fiasco) to extract bigger concessions from Apple.
At the end of the day, the safest hands are still Apple's own.