FTC Looking Into App Store Rules Regarding Subscription Services

[AdonisSMU]

On the whole, I think the press is extremely Apple friendly. They are willing channels for Apple's hype machine whenever a new product comes out. No other company gets a remotely similar treatment.

You mean people weren't hype for Spotify when it came out? Even Apple was promoting Spotify hard when Spotify came out. I think Spotify would do better by marketing itself as the premium experience to stock experience that is Apple Music.

I think Spotify's shine wore off because artists were barely making anything from it. The bigger artists can take the salary cut but the smaller ones can't afford to take a salary cut.

 

[thekev]

Yes it makes the point that an employee making 95k in salary costs a company around 190k. That is about double the salary. I made a typo saying $200k/hr when I clearly meant $200/hr. I have well over 100k salary wise as a software engineer and I wouldn't even consider myself to be senior level. However, the costs for the company isn't not the salary alone.

I said using your numbers it came out to roughly (slightly over based on salary distributed over a hypothetical 40 hour week) a $200k salary. Your original post suggested $400k before benefits, and you mentioned an army of developers in there. We don't seem to be using the same basis for calculations here, but I can't find anything to support a $200k average salary before benefits even for senior developers, much less those without that title within Apple or others where I would expect inflated salary levels.

 

[macUser2007]

if you don't like the app store, don't put your app on it.

Not that different from saying "If you don't like (Pick Random US Policy), then leave the country."

A rather shortsighted (and rather silly) statement, given that iOS accounts for over 80% of the enterprise market and Apple is pulling all the stops on getting government business in the US.

Apple is using its monopoly status in ways that would have made Microsoft blush.

 

[PJA]

FYI, the law trumps all private agreements if it's specifically called out. No agreement between two people allows one to euthanize/murder the other depending how you fall on that debate.

What laws were broken?

 

[AdonisSMU]

I said using your numbers it came out to roughly (slightly over based on salary distributed over a hypothetical 40 hour week) a $200k salary. Your original post suggested $400k before benefits, and you mentioned an army of developers in there. We don't seem to be using the same basis for calculations here, but I can't find anything to support a $200k average salary before benefits even for senior developers, much less those without that title within Apple or others where I would expect inflated salary levels.

I said $200/hr cost to the company. Senior dev can get mid 150k - 180k in salary. I agree my number was slightly higher than I should've stated. I was being rough and should've been more precise. The bottom line is the cost for a company is a lot of money to have engineers review the apps.

I did suggest 200k/year per developer.

Edited for accuracy. the point I was making sloppily is that engineers are expensive.

 

[paulmeyers42]

How is Apple's practice any different than a grocery store selling their own branded products at a lower cost alongside major brand products at a markup?

 

[Rigby]

You mean people weren't hype for Spotify when it came out?

Nowhere near Apple. I haven't really closely followed it, but my impression is that Spotify mainly became big by word of mouth. Remember that they already existed several years before they even came to the US.

I think Spotify's shine wore off because artists were barely making anything from it. The bigger artists can take the salary cut but the smaller ones can't afford to take a salary cut.

I'm not convinced that their shine has worn off. Although it may seem different in an Apple-centric community like this one, Spotify is still the household name when it comes to music streaming, and they currently have a much larger reach than Apple Music. We'll see how it goes.

 

[ThisIsNotMe]

Pathetic. The federal government stifling competition once again.

 

[AdonisSMU]

Nowhere near Apple. I haven't really closely followed it, but my impression is that Spotify mainly became big by word of mouth. Remember that they already existed several years before they even came to the US.
I'm not convinced that their shine has worn off. Although it may seem different in an Apple-centric community like this one, Spotify is still the household name when it comes to music streaming, and they currently have a much larger reach than Apple Music. We'll see how it goes.

In terms of the musicians, it has worn off. In terms of the public, Apple Music is a validation of Spotify.

 

[MH01]

You are going to have to read what I said before posting. I know that. There is a difference between the salary given to an employee and the cost of an employee for a company. I am trying to make a distinction here. I even posted an article that explained as much.

Does it matter what the cost is to company though? How is this relevant to running a streaming service, be it company A or company B , you have to pay the same resources to develop and run.

a $200/hr includes the desk, computer equipment, floor space etc etc.... Who cares!You never ever use that number to cost a projects.

Okay why did you bring up the 200/hr? To justify apples 30% ?

Or have i missed the point?

 

[AdonisSMU]

Does it matter what the cost is to company though? How is this relevant to running a streaming service, be it company A or company B , you have to pay the same resources to develop and run.

a $200/hr includes the desk, computer equipment, floor space etc etc.... Who cares!You never ever use that number to cost a projects.

Okay why did you bring up the 200/hr? To justify apples 30% ?

Or have i missed the point?

The point I was clearly not successful in making is that the engineers that review the apps don't come cheaply. Spotify devalues everyone else's work but their own. The musicians and the developers.

I think everyone is in agreement that 30% cut in perp is really too high. However, for app updates and the like Apple should be afforded something.

 

[mogirl09]

To Spotify, deezer, etc. Grow up and get the F out of the App store if you don't like it. How about you do what Google Music does and don't allow in-app purchase and force your users to go to your site to subscribe.

Now I really hope Spotify goes under, bunch of crybabies and scumbags IMO.

Google music doesn't allow in-app purchases? LOL are you joking?? Yes, you sure can get in-app purchases...
The Google Store is where you can get spotify from... and Spotify is free unless you want to use it offline. And Spotify is the only one that has made me actually register a credit card with them through their website and not bill my phone bill or pay the monthly through an app store. In fact I pay 5 bucks a month, because I am a student.

Apple did not give Spotify the infrastructure, Lets not forget from where Spotify came from. The Swedish inventor showed Shawn Parker (The originator of the Mp3 revolution in Napster and first president of Facebook) in 2009, to which Parker invested 15 Million Dollars became a board member and eventually FACEBOOK introduced to it's users as a way to share playlists.

Now where did Apple get it's infrastructure? It bought Dr. Dre's Beats Streaming system for 3 BILLION dollars last August.

So lets not joke on who knows more about this, Shawn Parker STARTED what Apple Capitalized on and now they are trying to beat him out of something he has been in 6 years longer than they have been. The only other group that has been in longer than this is Pandora and if you take away the subscription fee well then you are coming close to going after the same thing.

 

[ArtOfWarfare]

So then open Safari, go to Spotify.com and sign up. Not difficult.

That relies on you knowing:
1 - That you can purchase it from Spotify.com
2 - That it's cheaper on Spotify.com

Regarding Spotify sending out emails, that requires knowing the contact info for your customers, something which Apple doesn't share with app developers.

 

[mogirl09]

I wouldn't buy Spotify if it was 4.99. I tried it and didn't like it at all. Didn't like the UI, importing your own music was a mess, etc.

Why would you import your own music into a streaming music app? you make playlists of songs that are on the site. It's not itunes.

 

[thekev]

I said $200/hr cost to the company. Senior dev can get mid 150k - 180k in salary. I agree my number was slightly higher than I should've stated. I was being rough and should've been more precise. The bottom line is the cost for a company is a lot of money to have engineers review the apps.

I did suggest 200k/year per developer.

Edited for accuracy. the point I was making sloppily is that engineers are expensive.

Yeah I don't really disagree with that. They are expensive, and Apple probably keeps projects of this level at their home campus.

I think Apple Music is intended as a profit generator though rather than a service offered to sell more hardware. Given the fee level, it's likely to face more scrutiny over the longer term than things that are mainly aimed at pulling people into the ecosystem.

 

[gnasher729]

Right, so when you look at the numbers, Apple is sort of being uncompetitive:

Say, that both Apple and its streaming competitors are getting the same fixed xcosts from the producers. lets make a hypothetical assumption of 70% of their revenues are fixed contract costs.

I think when you say "uncompetitive" you actually mean "anticompetitive".

What really happens: People are subscribing to Spotify without using Apple at all. Spotify is free to put an app on the Apple Store that gives subscriber access to their subscriptions. (I think according to the App Store rules, the app must be at least a tiny little bit useful for non-subscribers). Apple doesn't get a penny from those subscriptions, and not a penny from Spotify if the app itself is free.

However, if users of the app can make payments to get more features, for example to get a subscription, then Apple gets it's cut. And the app is not allowed to avoid this by linking to a website where people can subscribe directly. The easiest thing for Spotify if they don't want Apple to get any money is to not mention subscriptions in the app. If they think Apple charges too much, then that is what they should do.

 

[AppleScruff1]

What kind of daft question is this?

People who are getting millions from their apps in the AppStore. Like the Angry Bird guy with countless of others. But who am I telling this? You are very well known to be extremely nitpicking when it comes to Apple around here. It's almost like you have an agenda or something!

ROFL!!! Countless others? I asked a fair question and it appears that there are only a few who are making a lot of money. I guess if you don't like the question there's no point in replying?

 

[gnasher729]

This is excellent news.

Regardless of any illegality, the 30% fee needs to be reduced substantially, not just for Spotify but for everyone in the App Store.

Look at all the threads where to get gift cards for a reduced price. I haven't paid £50 for a £50 gift card for ages. The last offer that I saw at a major UK chain was £30 of gift cards for £25. Since this chain isn't going to lose money, we can be quite sure that Apple gets less than £25 from these £30 gift cards. If you pay for a £30 item, Apple pays out 70% = £21 and there is less than £4 left.

 

[2010mini]

Do they now? Because I was under the impression that Google sells Android apps and Microsoft sells Windows apps. But if that's not the case, I will gladly bow to your superior wisdom. Just to be clear here, you are referring to these companies having competitive store fronts for the iOS platform? Simply putting up a GDrive app on Apple's App Store doesn't count.

Yes. They sell competing apps on iOS App Store

 

[AppleScruff1]

Pathetic. The federal government stifling competition once again.

What has the government done to Apple regarding this article? Did you read it?

 

[MH01]

The point I was clearly not successful in making is that the engineers that review the apps don't come cheaply. Spotify devalues everyone else's work but their own. The musicians and the developers.

I think everyone is in agreement that 30% cut in perp is really too high. However, for app updates and the like Apple should be afforded something.

Fair enough .

Apple has enough resources and a massive war chest to offer the best streaming service. This will result in regulatory bodies like FTC checking everything is in order. Google Microsoft etc all get scrutinized , hence why I think this is a non event for now ..... Though issues might get flagged. Apple has ventured into competing with others in its own store.

 

[MH01]

That relies on you knowing:
1 - That you can purchase it from Spotify.com
2 - That it's cheaper on Spotify.com

Regarding Spotify sending out emails, that requires knowing the contact info for your customers, something which Apple doesn't share with app developers.

Spot on. Well said.

 

[gnasher729]

Spotify costs 9.99, on the appstore it costs 12.99

And on spotify dot com it is 9.99. Anyone reading these posts should obviously figure out that 9.99 is 3.00 less than 12.99 and not subscribe from the app store, but from the spotify website if they don't want to give additional money to Apple.

 

[Toltepeceno]

ROFL!!! Countless others? I asked a fair question and it appears that there are only a few who are making a lot of money. I guess if you don't like the question there's no point in replying?

I guess countless means 1.6%. 50% makes 500 a month or less and something like half of those nothing.

http://techcrunch.com/2014/07/21/the-majority-of-todays-app-businesses-are-not-sustainable/

 

[Jynto]

Yes. They sell competing apps on iOS App Store

Haha yes, very clever. But those apps are not competing with the App Store in any way. They are part of it. Can't you see there's a difference?