Epic Games and Spotify Say Apple's Latest DMA Changes Are 'Illegal' and 'Deliberately Confusing'

[Mrkevinfinnerty]

https://www.reuters.com/business/media-telecom/spotify-slightly-misses-revenue-prediction-falls-short-user-growth-target-2024-07-23/

Spotify reports record quarterly earnings

July 23, 2024

Spotify posted a record quarterly profit slightly ahead of analyst expectations on Tuesday, pushing its shares up more than 14% in premarket trading.

In the second quarter of 2024, the number of paying Spotify subscribers rose to 246 million, slightly above expectations.

Profit rose 45% from a year earlier to 1.11 billion euros ($1.21 billion), slightly above analysts' expectations for 1.07 billion euros. Earnings per share of 1.33 euros also beat estimates of 1.06 euros, according to IBES data from LSEG.

Revenue rose 20% to 3.81 billion euros for the second quarter of 2024, fractionally below analysts' estimates of 3.82 billion euros. The company did fall short of its own target for monthly active users (MAUs). Spotify previously said it aimed to reach 631 million monthly active users (MAUs), but only reached 626 million for the quarter.

The company said it had seen user numbers grow across all regions, but that it had not met its MAU goal due to "continued recalibration" of marketing activities.

Spotify's gross profit margin widened to 29.2% from 27.6% in the previous quarter.

Meanwhile over at Apple Music..

Slow growth for Apple Music and others​

We’ve noted on several occasions that Apple Music subscriber numbers haven’t been publicly updated by the company since way back in 2019, when the number hit 60M.

The company had been announcing milestones every 10M subscribers, suggesting that five years later the number may still be below 70M.

Slow growth for Apple Music and other services, admits UMG

Slow growth for Apple Music and some other streaming services has for the first time been publicly acknowledged by the...

9to5mac.com

 

[cane811]

Doesn’t this guy charge $20 for a skin in a video game?

 

[cane811]

If app devs have to pay a fee, ultimately it's *us* who end up paying more. Defending Apple in this scenario is ridiculous.

Safe to say you’re against raising corporate taxes then?

 

[Nekomichi]

While I agree that Apple's implementation of app markets in the EU is messy and not 100% in the spirit of the regulation, I can't help but think of these guys every time Spotify and Sweeney react to everything Apple does:

I get that the DMA is supposed to make the app markets a fairer place but the constant heckling from these two groups really isn't helping, and nor is it for the consumer's benefit no matter how much they try to convince us otherwise.

 

[Sophisticatednut]

I don't quite understand how this discussion came up, when it wasn't part of the DMA. If Apple Music is forced to be spun off, I assume it would not be allowed to be integrated with iOS on a system level the same way other options like Spotify aren't. It would also break compatibility with products like the Apple Watch and the HomePod. It becomes just another undifferentiated music streaming service.

Well some other dude brought it up,

But if Apple Music was forced to be spun of it can still be integrated, just how Apple CarPlay 2.0 seems to be working to integrate in different aspects of a cars system.

Just because Apple Music would become its own independent service doesn’t mean Apple can’t expand the same service integration to other music services as well.

But if Apple doesn’t want to risk any of this coming to pass they can always allow competition to have free access such as Spotify, pandora, Amazon music, YouTube music etc etc

You look at the current state of Spotify, where its need to become profitable has forced it to deviate from its original goal of being just a service focused on delivering the best music streaming service to subscribers, to one that is now bloated with podcasts, ads, audiobooks and an impending lawsuit with the music industry over its use of audiobooks to get away with paying less royalties to musicians.

This speaks more about the unsustainable nature of its core business model, rather than any fault on Apple's part (remember that Spotify isn't paying a cent more to anybody that they absolutely have to). In contrast, Apple Music can be all about music and supporting artists instead of being a catch-all basin for everything audio. It's a feature to have its various services spun out into individual standalone apps (eg: podcasts, even classical music), not a bug.

Well I do find it ironic with your comment here as the is is my experience with the Apple AppStore and why it needs to be divorced.

As a consumer all-in on the Apple ecosystem, I fail to see how that is a net benefit for me as the end user. The reality is that Spotify is increasingly dependent on concessions from the music industry and a diversification away from music streaming just to improve its financial performance, which is not what I want. And because of the nature of those revenue sharing deals, even a higher subscription price may not necessarily flow to Spotify's coffers.

And Apple is increasingly dependent on shareholders interest to maximize profits to a point it compromises the company’s value of creating the best product for the consumers.

Fair and open competition will not get you the outcome you all want. It just means everyone loses in the end. In this regard, I wouldn't shed a tear if Spotify were to be acquired tomorrow and music streaming becomes just another bullet point on some tech giant's list of platform feature offerings.

And in case any of you are thinking that Apple would allow all alternatives access to iOS just so Apple Music can get the same treatment, you clearly haven't been paying attention to what they are currently doing with Apple Intelligence.

What do you think ”we” want from fair and free competition? What is this outcome you think we want that we obviously won’t get?

Currently most of the services Apple provides is just a bullet point to rack in money without any care for the user experience.

The AppStore on iOS and Mac are intentionally terrible for users as it maximizes profits instead of maximizing satisfaction of the user experience.

 

[AndiG]

The point is that Apple could make tons of money by creating and selling innovations. But since Steve sadly passed away, Apple is no longer able to create innovations.
So Apple shifted its business model and now collects fees from people who are still creative and sell their innovations.

And Apple is such a stupid company and fights the EU but it could ...

- collect 0,01 cent for each push notification (or lets say, a small amount of money)
- collect hosting fees for apps
- collect download fees for apps
- collect reasonable InApp Payment fees (1-3%), just compare to e.g. PayPal
- collect billing fees, since Apple collects all taxes and forwards them to authorities, e.g. IRS
- you name it ...

Does anyone has any idea, why Apple is so stubborn?
This approach would be service oriented and Apple could sell different packages, also a "classic" package with 30% Apple tax. No one would complain.

But Apple wants to eat the cake and have it. Those guys are either greedy, stupid or both.

 

[MilaM]

I get that the DMA is supposed to make the app markets a fairer place but the constant heckling from these two groups really isn't helping, and nor is it for the consumer's benefit no matter how much they try to convince us otherwise.

It is unfortunate, that Epic and Spotify are the only players who are confident enough to speak out about this issue. It takes courage and a certain standing to be able to voice these opinions. We know how vindictive Apple's management can be. If I were the owner of a small or medium-sized company that is dependent on Apple and Google for business, I would also weigh my words carefully. It's safer to let trade associations and NGO speak for you in this case I think.

 

[breenmask]

I don’t remember hearing anything against Epic actually running their store on Mac

I didn't say that. not sure why you're mentioning it

 

[breenmask]

Apple did NOT spend billions and billions making a phone.

I said billions and billions on platform/service/customer base/software and they literally did. check financial statements since iPhone was released.

 

[breenmask]

Let's say a company designed a phone for only White people, and Black people were either not allowed to buy it,

you've already overly complicated and/or mislead what I'm saying. I'm not even going to proceed down this analogy.

 

[breenmask]

No one has to sell an iphone

ok? it's apple's choice to sell an iPhone with all of the limitations and it's your choice to buy into those limitations. if you didn't want to buy into those limitations, you don't have to buy an iPhone.

thanks for agreeing

 

[laptech]

Apple is not going to win this on going battle with the EU because the EU is basically telling Apple is cannot charge developers that provide apps in the EU for things that have nothing to do with Apple's app store. The EU in it's on going battle with Apple has basically said developers with regards to apps in the EU can use their own payment system or a different payment system AND they can put links in their app that steer users away from the app without incurring any fee's because the EU has classed doing so as 'anti-steering' fee's, fee's introduced by Apple to stop developers steering away from it's app store, to stop developers steering away from Apple's own payment system and to stop developers providing links in their app that steer users away from the app to external sites.

Apple can keep changing it's DMA wording but until it stops the 'anti-steering' it is not going to win here.

 

[Sophisticatednut]

ok? it's apple's choice to sell an iPhone with all of the limitations and it's your choice to buy into those limitations. if you didn't want to buy into those limitations, you don't have to buy an iPhone.

thanks for agreeing

i'ts my device, i do with it as i please. that includes purchasing things that apple didn't consent to.

 

[Abazigal]

Omg, the mental gymnastics you've just done to justify apple double dipping, people already paid a premium for the hardware, they didn't license the hardware.

I see nothing wrong with double dipping. Just because Apple sells profitable hardware, they are not allowed to monetise any other part of their ecosystem and are expected to just subsidise them solely via hardware profits? Where's the logic in that?

 

[Mrkevinfinnerty]

I see nothing wrong with double dipping. Just because Apple sells profitable hardware, they are not allowed to monetise any other part of their ecosystem and are expected to just subsidise them solely via hardware profits? Where's the logic in that?

Yeah, they can. They just can't do it at the unreasonable expense of others.

Banning other companies from communicating with their own customers via the mobile applications they built is obviously ridiculous.

 

[SanderEvers]

Can‘t wait for Apple to start wining about all the lost customers.

Apple loses 10% of the costumers, Apple also increase the price by 20%..

Apple is not going to wine. At all.

 

[JippaLippa]

These people must have found a way to turn constant complaining into actual money...
Otherwise it won't make any sense...
They're relentless!

 

[attila]

Regardless on how Apple handles app stores, Epic Games and Spotify haven't done anything the last few years to compete with Apple. Spotify especially.

Make good products at a competitive price to stay competitive. I left Spotify when they started focusing on the wrong things. And now they even cost more than Apple Music. It's not unlikely that I could go back if they have a more compelling product.

 

[davide_eu]

While at the same time, losing what made the Apple platform unique in the first place - its integrated ecosystem. I am not convinced that consumers are better off in this scenario, though supporters of Spotify would certainly be happy that Apple is being forced to "play fair", and I certainly have no vested interests in Apple being compelled to do so.

It won't block it to be "integrated"! It will make possible to offer the same level of competition to anybody.

 

[Nuno Lopes]

I disagree with EU approach on this matter. They should instead focus on what their are doing if developers choose not to sell and distribute through the Apple App Stores. Both for Web Distribution and theirs party App Stores.

In this regard stipulate for optional install / enable of the Apple App Store across all their devices … much like they did once with Browsers on Windows. The fact that the EU did not, until now is simply an act of good will. But considering Apple has none …

 

[davide_eu]

ok? it's apple's choice to sell an iPhone with all of the limitations and it's your choice to buy into those limitations. if you didn't want to buy into those limitations, you don't have to buy an iPhone.

thanks for agreeing

Not at all! There are rules that must be followed by everybody,. big tech companies too...

 

[Digital Dude]

I’m not a big fan of Apple these days, but this EU commission thing’ is getting a bit ridiculous. 🙄

 

[q64ceo]

It's the EU marketplace, it's the EU rules. If Apple doesn't like it, they can leave.

 

[Mrkevinfinnerty]

Regardless on how Apple handles app stores, Epic Games and Spotify haven't done anything the last few years to compete with Apple. Spotify especially.

Make good products at a competitive price to stay competitive. I left Spotify when they started focusing on the wrong things. And now they even cost more than Apple Music. It's not unlikely that I could go back if they have a more compelling product.

This is the very definition of anecdata.

Spotify have lapped Apple in music streaming, they are the biggest service of their kind by a wide margin. If anything Apple Music are barely competing here.

See this market share chart from earlier this year.

 

[davide_eu]

Does anyone has any idea, why Apple is so stubborn?

Yes,

It is because there is a mass of people who sold their soul to them. For them, everything with that logo as well as every decision is always right.

It is the a$$le defence force that gives them the power to take any decision. They know that their "believers" will be ready to eat any cake, for any price,...