Google Play Store Now Letting Spotify Use Alternative Billing for In-App Purchases

[AppliedMicro]

The internet providers and the power companies do charge for providing the infrastructure.

They charge for ongoing service and recurring usage.
And do internet provider or power companies charge as „commission“ a double digit percentage of your revenue?

Big difference.

Apple invests billions in maintaining the platform

And they are well rewarded in billions from device sales.

 

[BaldiMac]

And they are well rewarded in billions from device sales.

I have no idea what that has to do with my point.

 

[Abazigal]

" data-source="post: 31721635" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch">

Dang! That's something Apple would never allow into the App store. But they may no longer have a choice anymore in the future.

Also, curious about how secure is the transaction is.

Nothing is stopping Apple from charging developers a cut even if they use third party payment options, since Apple is making it clear that they are 30% as a platform fee, and not a payment processing one. Seeing as to how the Dutch dating app case still hasn’t had a proper resolution yet, I wouldn’t be too quick to write Apple off yet.

 

[Mrkevinfinnerty]

This is the beginning of the end for Apples IAP shakedown.

 

[Kierkegaarden]

Apple needs the best apps to be on its store as much as those apps need to be on Apple's store.

Good point. It’s impossible to know who was being reasonable or unreasonable during negotiations between these companies. These developers only seemed to complain about the commission after they had scaled and became successful, seemingly forgetting how they got there in the first place (Netflix being the exception). Epic and Spotify are pushing the issue through legal channels, but Netflix is not which I find interesting. Ironically, I believe Netflix has lost a lot of revenue by not offering signup in their App Store app. If the user signup was tied to their Apple ID, the chances are slim that account sharing would be happening to the degree that it is.

In the end, I can’t disagree with Apple for wanting to keep their commission the same (which has been consistent since 2008, except for the small business reduction), and I can’t disagree with any developer that wants to pay as little a commission as possible. The problem with introducing lawyers into this is that both sides dig their heels in and reasonable discussions go out the window.

 

[vikingjunior]

Apps are a dying business just use the websites.

 

[AppliedMicro]

I have no idea what that has to do with my point.

First off, I believe the figure is way off.
Apple are not investing "billions in maintaining the" (App Store) "platform".

A billion dollars is (as a quick back of the envelope calculation) more than a million employees earning a million USD each. 1'000'000 employees * 1'000'000 USD salary/employee = 1 billion USD.

The App Store platform isn't run by a million people. Apple's headcount of employees is only a fraction of that - and they don't earn a million each. Electricity bills and outside contractors don't make up for that - and neither does the rent for office space.

I took your statement as a more general one regarding the iOS or iPhone platform as a whole. A suggestion that Apple somehow needed to be compensated for that. That isn't an "elephant in the room" though, since expenses for maintenance of iOS/iPhone are being (more than) paid off by device sales alone.

 

[freedomlinux]

And you charge $9 for it, out of which you keep $6, and Apple/Google keep $3 for the hosting, promotion and infrastructure.

If I develop a similar app, I'll have to compete with you on a similar price point or better features. That's fair competition. We both pay the same fee.

But one day, both Google and Apple both roll out a competitor app with same features as yours (Apple Music), also sold at $9. Now you're in a fix. Not only your biggest competitors don't have to pay a cent in app store fee (they own the store), they also get money off of you.

i.e., Apple/Google get to keep entire $9 plus they get $3 from you. You get $6 only. How are you supposed to keep competing with them at the same price point? For how long is it going to be sustainable, since you're directly financing your biggest competitors?

This, IMO, is one of the biggest issues with the App Store model. If a third-party and Apple both have a similar application, the third-party developer is immediately at a HUGE disadvantage because they pay the App Store fees which Apple (almost certainly!) don't charge themselves.

I'm not entirely sure how to fix this. One possible financial "hack" to represent this would be Apple operating these two different segments of the company as independent subsidiaries. So, Apple Music Inc pays their 30% cut to Apple App Store Inc just like everyone else...

 

[Abazigal]

Apps are a dying business just use the websites.

Reddit in safari is a pain to use. It’s apps like Apollo, Tweetbot and Tapatalk that make the mobile web experience so much more bearable.

 

[BaldiMac]

First off, I believe the figure is way off.
Apple are not investing "billions in maintaining the" (App Store) "platform".

A billion dollars is (as a quick back of the envelope calculation) more than a million employees earning a million USD each. 1'000'000 employees * 1'000'000 USD salary/employee = 1 billion USD.

The App Store platform isn't run by a million people. Apple's headcount of employees is only a fraction of that - and they don't earn a million each. Electricity bills and outside contractors don't make up for that - and neither does the rent for office space.

I took your statement as a more general one regarding the iOS or iPhone platform as a whole. A suggestion that Apple somehow needed to be compensated for that. That isn't an "elephant in the room" though, since expenses for maintenance of iOS/iPhone are being (more than) paid off by device sales alone.

1. I never said per year.
2. I never said anything about Apple “needing to be compensated.”

I was just refuting the point that Apple’s cost was zero compared to the 30% that Spotify would have to pay. In reality, Spotify only pays 15% on a few legacy subscriptions. Apple distributes their app to new subscribers for a grand total of $99 per year. Both Apple Music and Spotify pay similar credit card fees for each transaction.

 

[Unregistered 4U]

I'm not entirely sure how to fix this. One possible financial "hack" to represent this would be Apple operating these two different segments of the company as independent subsidiaries. So, Apple Music Inc pays their 30% cut to Apple App Store Inc just like everyone else...

Spotify’s not paying a 30% cut, though, right? Any third-party developer is only at a HUGE disadvantage if they haven’t actually sat down and thought out how they can set themselves apart, make themselves unique in a way that will turn a profit. If a competitor has a compelling product, it survives, like DropBox. Even though Steve Jobs offered to buy them saying they were a feature and not a product, they’re still around and selling subscriptions because they’re selling something unique that people want… even WITH iCloud existing and other services existing. Should we expect Google, Microsoft and Amazon to make it easier for DropBox to turn a profit just because they’re in the same business?

One way to “fix” it, is for companies to offer compelling solutions and features for a price a company can profit from AND a price customers are willing to pay. If that equation doesn’t equal to ++dollars, there’s nothing that making any changes to any of the competition will do that will FORCE it survive.

 

[Abazigal]

Spotify’s not paying a 30% cut, though, right?

My guess is that only a small proportion of Spotify's total subscriber base is actually still paying that 30% to Apple (which would have long been reduced to 15% after the first year). The rest are either subscribing directly via the website, or android users (of which how much subscription revenue accrues to Spotify has nothing to do with Apple).

Yet Spotify would evidently have you believe that Apple somehow sucking 30% of all their subscription revenue, but the end result is likely that Apple isn't really taking that much money from Spotify. It's a red herring through and through, all to draw attention away from the fact that Spotify simply doesn't have a viable business model to begin with.

 

[vikingjunior]

Reddit in safari is a pain to use. It’s apps like Apollo, Tweetbot and Tapatalk that make the mobile web experience so much more bearable.

Reddit in Brave works great and it's free. It's embarrassing how much better Brave is to Safari. In my experience these apps are no more then spyware. Did you ever read the privacy policy on some of these apps? OMG they want everything but your first born.

Apple is worried about a search engine yet their browser is horrible.

 

[AppliedMicro]

1. I never said per year.

Thanks for clarifying.

Any way, while Apple may not have no or zero costs for maintaining their purchasing their billing system, they are only a fraction of the 30% commission rate they charge on third-party purchases/subscriptions. And investments or maintenance in previous years are basically sunk costs (Apple isn't even in debt because of them).

That's while I can't see any elephant in the room casting shadow on akashagrawal's point.

 

[Unregistered 4U]

It's a red herring through and through, all to draw attention away from the fact that Spotify simply doesn't have a viable business model to begin with.

Yup, Spotify’s poor business dealings are their fault alone.

 

[Haiku_Oezu]

What’s the percentage Google takes from user choice billing?

 

[sdz]

Reddit in safari is a pain to use. It’s apps like Apollo, Tweetbot and Tapatalk that make the mobile web experience so much more bearable.

Reddit is ****? Use kiwifarms 😜

 

[dguisinger]

4% reduction is ridiculous....Google nor Apple are responsible for consumers buying something content from a app developer.

They will take the money where they can in the meantime. 4% should make a big impact y/y.

No, it won't. Google just isn't charging for the credit card processing, which Spotify will now pay directly out of pocket.

But credit card processing is the only service Google is actually offering in the first place, so now they are charging 11% or 26% for sitting on their hands and doing nothing, just collecting rent.

Netflix and Spotify don't need phones to exist. But these phone companies need Apps like Netflix and Spotify otherwise no one would pay $1500 for a phone that does more than phone calls.

I can't wait for the day for this to bite both Apple and Google in the rear.

 

[Abazigal]

4% reduction is ridiculous....Google nor Apple are responsible for consumers buying something content from a app developer.

Neither is Sony or Nintendo, and they charge a similar commission for their platform nonetheless.

 

[JippaLippa]

I understand the trouble with the appstore getting such a large cut, that said I wouldn't like apple to open up their walled system.
Couldn't they make different stores available to download through the appstore?
This way the phone would still be locked, but you could still download other stores.

 

[MacBH928]

Tell me you know nothing about Android without telling me you know absolutely nothing about Android...

Honestly, I wouldn't use any thing closed source made by Google, the data scavanging machine. You might say there is an open source android version out there but I hardy seen any devices being sold with that, even Calyx and GrapheneOS are modified versions.

 

[_Spinn_]

Should be interesting to see how this plays out.

 

[mrochester]

4% reduction is ridiculous....Google nor Apple are responsible for consumers buying something content from a app developer.

No, it won't. Google just isn't charging for the credit card processing, which Spotify will now pay directly out of pocket.

But credit card processing is the only service Google is actually offering in the first place, so now they are charging 11% or 26% for sitting on their hands and doing nothing, just collecting rent.

Netflix and Spotify don't need phones to exist. But these phone companies need Apps like Netflix and Spotify otherwise no one would pay $1500 for a phone that does more than phone calls.

I can't wait for the day for this to bite both Apple and Google in the rear.

The commission is payment for facilitating the transaction between app developer and consumer. Without the App Store, the consumer may never have found your app and/or service and if a consumer never found your app, they never paid for it. The App Store is for exposure.

If Netflix or Spotify don't want to pay that commission then they don’t need to allow subscription sign ups from within the app downloaded from the respective App Store. Both companies are free to access consumers for payment via the open internet.

 

[BaldiMac]

Thanks for clarifying.

Any way, while Apple may not have no or zero costs for maintaining their purchasing their billing system, they are only a fraction of the 30% commission rate they charge on third-party purchases/subscriptions. And investments or maintenance in previous years are basically sunk costs (Apple isn't even in debt because of them).

That's while I can't see any elephant in the room casting shadow on akashagrawal's point.

Strange how you edited out the part of my post that addresses your response directly from your quote.

Again, Spotify currently pays about the same as Apple Music in transaction cost. The 30% cut doesn’t exist.

 

[Playa777]

that's all you need to know about Google – making things more complicated than ever. By the way, love using YouTube with Adblock and Firefox on my Macbook, better than ever