EU Inquiry Finds No Evidence Apple Colluded With Record Labels to End Freemium Music

[AlecZ]

I will admit, the lack of a free tier is a bummer. I only use streaming services a few hours a week for discovery. Certainly not enough to pay $120 a year for. At least iTunes Radio is still free.

Yeah, I'm exactly like that. I wish iTunes Radio would let me discover more, though. I hear the same set of songs every time at this point. Apparently, I need to install the old iTunes on one of my computers to add a new station because they removed the query option, and it never accepts any of the songs I select to make a station from.

 

[threesixty360]

Daniel Ek never intended Spotify to become profitable. His business model was always to grab as many users as possible to justify a massive IPO in Wall Street, then take the money and run. But his chance at an IPO seems more and more unlikely now...

yup. 100%

I think Spotify would like to sell up (being that a strong IPO is now unlikely). The problem is they've taken so much VC money that it kind of makes them too costly for even companies like Facebook and Google. At the end of the day the big boys are into buying customers not profitable companies (hence instagram and whatsapp). Customers have information and they can use that to pitch to advertisers. 300m regular users is more interesting than 70m free loaders. No one really cares about the listening habits of those 70m. You can't sell that info to an ad company.

The whole Spotify thing has been a race against time. How quickly could they create an environment where you need to stream to actually make money out of music? I think they were nearly there (Warners claimed that over 50% of their revenue came from streaming last year) but Apple came from nowhere and bought Beats. Game over.

Apple did it sure up their music business against the threat of streaming from Spotify. I think Spotify must have thought it would be too hard for apple to negotiate streaming contracts and build up a decent music player in under a couple of years. But Apple just solved the problem by paying $3b for a company that already had those deals in place. Now I think that (sadly, because i like spotify and its interface is better) Spotify are kind of left with a dying product.

The lesson really is that content is expensive. I think it's true to say that in 2015 its impossible to earn profits distributing content you do not own. Period. Unless you have some other motive (selling devices, harvesting customer data for ad's etc...) it just can't be done.

 

[casperes1996]

The phrasing: "The European Commission has failed to find evidence that Apple conspired with record labels to put a stop to free music streaming" makes it sound like there definitely was evidence, but this commission just couldn't find it.

 

[verpeiler]

I sense that the EU likes to randomly boss around U.S. corporations. Remember this BS?

No, it's their duty to investigate. It has nothing to do with the origin of the company. And afaik Apple's HQ for europe is in Ireland.

 

[SgtPepper12]

I sense that the EU likes to randomly boss around U.S. corporations. Remember this BS?

I don't see how this was BS. The regulation stated that fans need safe guards. To me that makes a lot of sense and it's rather weird that they weren't there in the first place. Believe me, that is not even close to the most ridiculous EU regulation. Also it has nothing to do with the US and it's not random. Your US corporations happen to operate in the EU, so they need to deal with EU regulations, just like any other company.

 

[Tech198]

whats wrong with free tiers ? Users are more likley to go with a streaming service if it has a free tier anyway so they can "try it out"

if the labels are peeved, then maybe those services, like Apple should start paying labels in the free tier, as the right thing to do...

The EU has nothing here. Music services do what they want...

 

[2457282]

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

Google map is in fact, not that much better; that's why default and tight inegration is important. If you're close enough, people are lazy and won't go the extra mile to find slightly better on some aspects while having worse overall integration with the rest of the platform. Google can't offer tight integration and convenience, so they lose.

If Apple is able to put enough resource into spotlight that it becomes in fact the search engine for IOS, then Google will be in deep trouble.

In the case of Apple, after IOS 9.0 comes out and street level mapping comes out, Apple map and Google will be essentially on par with Google having a slight advantage in POI because of their search integration. That's far from enough to get most IOS user to use Google Map.

Both of thes opinions miss an important fact. When Apple booted Google as the default app, it took Google almost a year to produce an app for the iPhone. We are in a different situation where Spotify has been on the iPhone for a while. Ultimately, I do agree the power of default wins if Apple can produce a product that is close, equal or better to anything on the market.

I am a music owner vs renter, but for the renters out there, Apple still has a little ways to go and if they can get there in 60 days before the free period expires they have a chance to keep some of the subscriptions. If they get this right, it will be interesting to see how this plays out over the next year (especially after iOS9).

 

[prasand]

Am I the only one that read that article in full and had a reaction of, "blah blah blah, blah blah blah blah"?

 

[Jax44]

Am I the only one that read that article in full and had a reaction of, "blah blah blah, blah blah blah blah"?

Yes.

 

[HenryDJP]

After the iBook case, I don't think  would want to collude again, especially when all eyes are on them

I think you meant E-book?

 

[HenryDJP]

The irony of this comment!

Where exactly is the irony?

 

[foobarbaz]

"Free ad-supported service". A contradiction in itself. Ad-supported services are not free. People just don't realize they are paying for them, so they appear to be free.

By that logic there would be no need for the word "free", because nothing would ever qualify. You always "spend time"…

Let's see how Webster defines "free" …

not costing any money

Oh well, let's not try to redefine language to make a point then.

 

[wirefire]

Apple's entry into the market will likely destroy most if not all music services, especially free / ad supported ones. Apple doesn't have to put pressure on record labels, they look at their revenue streams and see that apple music is giving them the biggest piece of the online dollars. They in turn will offer the most content to apple music, because more content = more plays = more subscribers = more revenue.

This isn't hard to figure out. Apple's largest potential threat is if all the major music labels got together and formed their own online service and undercut Apple. But there are many reasons this will never happen. And Apple has basically a 10 year head start on programing users that Apple/Itunes is the place to go for music.

This was Jobs' vision for television. He wanted to do the same thing. The only problem was that content creators are also the content distribution and delivery system (see NBC / Universal / Comcast). There is no real way for them to enter the market without becoming someone like Directv (now AT&T) or a cable provider and that wasn't the business model he wanted. He wanted the iTunes of television that you could watch current TV programming just like you can on cable and Pay per watch... in essence monetizing the DVR world. it would take some time, but i think it would have eventually penetrated the marketplace. Especially if it was significantly cheaper than existing cable for smaller consumers. You want to watch something at 8:05 on CBS that started at 8, just click the show and it is listed and go to town, the APPLE DVR servers are already recording every channel at every second of every day. Not like iTunes subs that are already 1 day behind TV release.

 

[hpod]

iPhone6+ user here.

As a person that's extensively used both Google Maps and Apple Maps (to actually compare the two), Google Maps is superior in quite a few ways, though Apple *is* gaining. I'm not one to praise Google, but when they do something right, they deserve credit, and I hope Apple copies every last feature.

I'd say in about two years, Apple will have caught up and it will no longer matter.

That said, Google Maps does do quite a few things that are simply superior to Apple maps as they exist today.

1) Google Maps turn by turn tells you which lane to be in, while not a huge deal, it's nice, especially in big cities with complex highways.

2) Google Maps turn by turn does not lock you into a specific zoom radius or prevent you from rotating the map (and the map staying how you rotated it). Apple maps locks you into a very tight zoom radius AND prevents you from rotating the map, which is an annoying use case.

3) In Google Maps turn by turn, it still shows you traffic data, for some reason, once you go into turn by turn in Apple maps the traffic data is gone and you're driving "blind". I like to know if an area of congestion is coming even while in turn by turn.

4) Google Maps has 1 touch zoom, enough said. Double tap on Google Maps (holding on the second tap, move finger up/down to zoom in and out, it's simple and brilliant, especially with the larger phones which Apple now sells.

5) With Google Maps, I can make restaurant reservations right through the app, without the need to install additional apps OR sign up to use them. You can also call/reserve UBER rides AND book hotel rooms right through Google Maps, just as easily AND it tells you the current booking prices from a number of sources.

6) I don't use this, but Google Maps transit directions is much more comprehensive, though Apple should be catching up rather quickly.

7) Because Google Maps is not tied into the OS (which doesn't really add much in the way of functionality aside from "lock screen" directions), it's base map is updated much quicker. For example, in Chicago, Maggie Daley park still shows the old park layout in Apple maps, while in Google maps it's been updated to reflect the walking paths as they've now existed for 6 months. And when using turn by turn, Google Maps keeps your phone active, so the need for lock screen directions seems arbitrary anyway.

8) Until this week Google Maps lacked night mode, but it has that now, too...

 

[Jsameds]

I hope Apple Music eats away at Spotify's profits for this. That would be some sweet sweet justice.

 

[BoulderAdonis]

Google map is in fact, not that much better;

It is, in fact, significantly better. I attempt to use Apple Maps periodically to see if it has caught up. Apple Maps still fails to find correct addresses / directions - and perhaps the most useful feature of Google Maps that Apple Maps is lacking is the routing optimization feature which shows me alternate routes which may be faster, or slower. To me that is what mapping should be all about: 1) accuracy, and 2) speed to destination. I also truly appreciate the feature that shows me the number of lanes, and which lane I need to be in. I wish Apple Maps had all of this functionality. The tight integration w/ the phone and my watch are fantastic - but in this case, functionality trumps defaults / integration.

 

[5232152]

Apple, Google, Microsoft, Amazon and so on should not never feel too comftable in Europe. The people decides here, not the lobbiests.

 

[MentalFloss]

By that logic there would be no need for the word "free", because nothing would ever qualify. You always "spend time"…

Let's see how Webster defines "free" …

not costing any money

Oh well, let's not try to redefine language to make a point then.

But ad-supported services DO cost money. So they are not free. Where exactly did I try to redefine language? Where did I say anything about "time". When I speak about "free", I use exclusively the definition above.

If someone approaches you on the street and gives you an an apple, no strings attached, then it is free. So that is where the definition of "free" applies. Yes, not costing any money.

Ad-supported services are not given to you Just like that. You pay for them (whether you use them or not). Everyone pays for them by buying the products that finance these ads. Somewhat sad that it is actually necessary to explain this to people, but the highly naive idea that "free" and "ad-supported" are the same thing pr that these services don't cost any money only because you don't pay at the time that the service is provided is extremely deep-seated. People really seem to believe that the money for the ads comes out of nowhere or out of Gringott's Bank or something similar.

PS: Had to go back to re-read my post. I wrote twice in two paragraphs about "paying". I guess I assumed people assoiated the verb "to pay" with money. I guess in the future, I will write "paying with money" to make myself more clear.

 

[apolloa]

I don't see how this was BS. The regulation stated that fans need safe guards. To me that makes a lot of sense and it's rather weird that they weren't there in the first place. Believe me, that is not even close to the most ridiculous EU regulation. Also it has nothing to do with the US and it's not random. Your US corporations happen to operate in the EU, so they need to deal with EU regulations, just like any other company.

Bang on, just because you're an American corporation does NOT make you somehow excluded from European law.

And to be cleared of part of the complaint by the European courts is a very good thing and means a lot, lets see how they get on with the other complaint they are investigating. I do think asking for 30% is too much, but as Google do the same it seems to be the standard charge, but I do think Apple should allow links in apps to go outside their store, this should be the same for all platforms.
Might change the IAP system that's used?

 

[JHankwitz]

"Apple's App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple's fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law."

Once again Apple gets singled out. Amazon, and others, have policies that are definitely close to being anticompetitive. The FTC & EU gets a hardon anytime there's a hint of a complaint about Apple.

Very true, but they'll continue to be the prime target since they have the deepest pockets.

 

[rp2011]

Did anyone not see it would turn to the app store? That's where most of us said the problem lay in the first place with Apple's advantage and their subscription recurring fee

 

[lowendlinux]

Very true, but they'll continue to be the prime target since they have the deepest pockets.

Or perhaps they push the rule of law the hardest

 

[entropys]

Apple, Google, Microsoft, Amazon and so on should not never feel too comftable in Europe. The people decides here, not the lobbiests.

Haha ha ha. If by "people" you mean an unelected Bureaucrat in Brussels, I forgive you. Otherwise the EU in actuality is/will be an object lesson in disenfranchisement.

And you would have to be trolling to think this investigation didn't arise from lobbying from Apple's competitors. I don't except much from them, but I doubt the Eurocrats are sitting around all day wondering what Apple will do next. They acted on a complaint. If there wasn't a complaint, Europe has a bigger problem.

 

[Daalseth]

At least iTunes Radio is still free.

Is it? I didn't try iTunes Radio before AppleMusic came out. Last week when I tried to take a look it said I had to join Apple Music to listen to any of the music streams. BBC World Service was the only actually free feed.
Maybe it's a Canada thing though.

 

[Arndroid]

"The European Commission has failed to find evidence that Apple conspired.."
But they did find plenty of evidence that Spotify payed litteraly millions of dollars to hire expensive lobbyists in Washington for the purpose of starting an investigation against Apple.

"Spotify’s lobbyists have quietly made the rounds in D.C., whispering to lawmakers for months that Apple’s new music offering threatens to stifle its competitors, according to sources familiar with the discussions. The apparent goal has been to raise antitrust suspicions about the iPhone giant, which faced a previous government lawsuit over its pricing of e-books."

Source: http://www.politico.com/story/2015/...t-apple-in-congress-119976.html#ixzz3iD8TPhrc"

I believe it. It is their last chance. Since the EU found no issue I suspect that it will get even less attention in d.c.

Spotify is going to lose a huge chunk of their full subscription users while keeping ad supported snd discounted accounts. This means spotify will start losing even more money as their ratio of paying subscribers to everyone else gets worse.

The investors just dumped tons of money in hoping to get to IPO. Don't see how they get to IPO now. With things accelerating downhill and no way large sums of money get invested to keep it afloat. They were able to get the last round of investments right before it was clear apple music would crush them. So they still have some time but they don't have anywhere to go thus these legislative hailmarys.

They have never converted enough ad customers to subscribers. Now thst a portion of them and others will go to other services their business model is a noose.