Senator Elizabeth Warren Accuses Apple of Trying to 'Snuff Out Competition,' Spotify Agrees

[redhawk87]

You paint it as if Apple saw Spotify being successful and set out: a) to develop a service specifically to compete with Spotify, and b) to put up roadblocks to hinder Spotify. I'd say that Apple Music is a pretty natural outgrowth of Beats Music, which Apple purchased as part of Beats (for a wide variety of reasons), which in turn, had its roots in MOG, which goes back quite a few years. And I don't see any changes that Apple has made to the App Store rules to stunt Spotify's growth - the monetization rules are what they've always been, and are designed to ensure that Apple gets paid (quite handsomely, to be sure) for running the store (thus, 30% no matter how the money is collected, because otherwise developers would always flock to the lower priced option even if it wasn't good for customers - calculator subscriptions anyone? - and no redirecting users to some outside place to pay the developer directly). For the record, I think a 30% cut for subscriptions is pretty high, but I can see why they do it that way (again, if the paths through the system aren't equal, the cheap one will win out).

Reading your first sentence above, one would conclude that Apple has made recent changes in the pricing structure in order to thwart Spotify's potential for success. I don't see that supported by the evidence (unless perhaps Apple has developed a time machine and used it to go back and change their pricing rules in the past). Instead, I see Spotify deciding that Apple's rules, which they agreed to (just like every other developer), are not sufficiently advantageous to Spotify's business model, so they're throwing a tantrum to try to get them changed.

That post was in response to Thunderhawks' comment saying that companies should be able to capitalize on their success. If you believe companies should have the freedom to capitalize on their success, then Spotify should have that right.

Apple completely turned the music industry on its head with iTunes in the early 2000's. Apple essentially killed off the CD with iTunes. It took what? 4-5 years for iTunes to be the #1 music store in the world. That is pretty impressive considering the legal music downloading services at the time were having trouble making traction in the face of napster, limewire, etc. and the good old CD/MP3 CD. Now, fast forward to a couple of years back and a new trend in listening to music has emerged. That trend is streaming! This trend was spearheaded by Spotify (and to a lesser extent, Pandora, but I see them as a radio station instead of streaming service). This trend was not created by Apple. Apple was starting to see its iTunes service not on the cutting edge of music anymore and needed a restart. So, they buy Beats who had a Streaming service and morphed it into Apple Music. Apple Music makes Apple relevant again in the Music industry. This is all fine by me.

I understand Apple's motive and as I have written it seems all legal. The problem is that Apple has created a very successful ecosystem that favors its own apps over competitors. The way Apple has written its terms, Apple has the potential to undercut any app it want to compete against. The ability to undercut anyone they want can be considered anti-competitive by some. Spotify is at a disadvantage on iOS due to the 30% charge, which makes it less competitive. Since it is not as competitive, it cannot grow as quickly as it would have otherwise.

The issue here is not just an Apple vs. Spotify debate here. This debate has happened before with the Kindle App and I am sure numerous others. With the Kindle app, Apple just decided one day to get into the book selling business to cash in on the ebook movement and created iBooks. During this time, the kindle app was forced to use in-app purchases and pay Apple 30% of every book purchase. So, if Apple and Amazon were to broker the same exact deal with book companies, Kindle books will be 30% more expensive due to the Apple tax. That means that on iOS devices you are more likely to buy iBooks than Kindle books. As you can see this issue can apply to many different apps, not just Spotify.

 

[Thunderhawks]

your welcome I always love a good read.

Yes, competitors should not be able to whine just for the sake of whining. If someone truly has a better product, then they should be able to benefit from it. I completely agree with you.

Spotify was not the first streaming service, but it was the first to popularize it. Spotify has been growing at an amazing clip and has been seen as one of Europe's biggest start-up success stories.

So, to your point, should Spotify be able to capitalize on this success? Currently, Apple is potentially stunting Spotify's growth, making it harder for Spotify to capitalize on its own success. Now, dont tell me that you think Apple Music is superior or 'a new way of doing things' because it essentially is a Spotify copycat. Apple is capitalizing on the success of Spotify by copying their idea and then making it more difficult for them to grow.

Now, it can be argued that since Spotify looses money every year, it does not 'run its business well'. But, the idea of growing really fast while loosing money is a pretty common business model in this field.

Don't care about Apple's streaming (no idea if it's good or bad, just from what I see considered not that great) or any of Apple's services (They have not been able to get services right since iDisk).
I do not like anything with monthly subscriptions, other than what I consider necessary. My interest in owning music or know about the latest has been replaced by getting ready for retirement.
I do use the SPOTIFY free app (rarely) and like the fact that they have a better catalog (European oldies)
Don't think Apple Music was started as a competitor to SPOTIFY.
They had iTunes radio and Beats , plus they had to realize that the days of music downloads are numbered, so the were looking for another revenue stream.
Since it's in the end always about money, it's SPOTIFY trying to cut their losses and wanting to have things changed for them.
So, Apple refuses and has one policy for all. (Hope it's true)

 

[lchlch]

ah, the dev fee, not the 30% fee.. My bad. So, my counter was completely off topic. I thought you were saying the money Spotify was getting from their users was not enough to pay for the updates.

I understand the $99 a year does not cover all those costs. I am also fully aware of all the costs Apple incurs by hosting an app and administering updates and I bet most people on here who think Apple's policy is anti-competitive are also fully aware of this. That is not exactly what needs to be debated here. What you are trying to argue is whether Apple has the right to charge app developers for its service. What needs to be argued is whether this practice is anti-competitive or not. Now, Apple carrying the burden of housing the apps and updating them and everything else is definitely one point to be made for it not being Anti-competitive, but it is just one point to be had. And that point is a valid one!

Would it be anti competitive if Apple did not introduce Apple Music?

 

[redhawk87]

Samsung still has it's Tizen line of phones and Ubuntu touch has been successful enough that they have two makers and now a tablet. Neither are Apple nor Android size wise but they're not dead either. Jolla is also hanging in there though tenuously

The premise is that Spotify could create their own phone OS to compete with Apple. Having two phones and a tablet use your OS in my opinion is not "successful enough" to compete with Apple Music.

 

[redhawk87]

Would it be anti competitive if Apple did not introduce Apple Music?

Yes. Do you remember Amazons fight over the Kindle App on iOS? Same premise. Spotify is just one company affected by this issue.

 

[lowendlinux]

The premise is that Spotify could create their own phone OS to compete with Apple. Having two phones and a tablet use your OS in my opinion is not "successful enough" to compete with Apple Music.

Ubuntu touch is a year into this shindig, Tizen is backed by Samsung and sold in some of the most populous countries in the world. Apple music will go over well in the states which is enough to justify it's existence but not so much else where. Apple and spotify are both being petty and not seeing the forest for the trees.

 

[redhawk87]

Don't think Apple Music was started as a competitor to SPOTIFY.
They had iTunes radio and Beats , plus they had to realize that the days of music downloads are numbered, so the were looking for another revenue stream.
Since it's in the end always about money, it's SPOTIFY trying to cut their losses and wanting to have things changed for them.
So, Apple refuses and has one policy for all. (Hope it's true)

You are right, the music industry is gravitating towards streaming music and Apple is getting on board before they become irrelevant in the industry. I completely understand this and think Apple has the right to do this. But, Spotify is the largest streaming service to date and pretty much single handedly brought streaming to the mainstream. So, Spotify is the reason Apple and others are getting into the streaming business. If Apple Music doesnt directly compete with Spotify, then what does it compete with?!? It definitely is not so different it deserves its own category!

Spotify is not looking for an exception to the rule, it wants the rule that applies to everyone to change so that everyone benefits.
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Ubuntu touch is a year into this shindig, Tizen is backed by Samsung and sold in some of the most populous countries in the world. Apple music will go over well in the states which is enough to justify it's existence but not so much else where. Apple and spotify are both being petty and not seeing the forest for the trees.

Blackberries are sold in the US, the third largest country in the world. Doesnt make them any more relevant. Windows Phone is backed by one of the largest companies in the world. As much as Microsoft wants you to think so, it has not garnered enough market share to be considered a strong 3rd place contender.

 

[lowendlinux]

You are right, the music industry is gravitating towards streaming music and Apple is getting on board before they become irrelevant in the industry. I completely understand this and think Apple has the right to do this. But, Spotify is the largest streaming service to date and pretty much single handedly brought streaming to the mainstream. So, Spotify is the reason Apple and others are getting into the streaming business. If Apple Music doesnt directly compete with Spotify, then what does it compete with?!? It definitely is not so different it deserves its own category!

Spotify is not looking for an exception to the rule, it wants the rule that applies to everyone to change so that everyone benefits.
[doublepost=1467919302][/doublepost]
Blackberries are sold in the US, the third largest country in the world. Doesnt make them any more relevant. Windows Phone is backed by one of the largest companies in the world. As much as Microsoft wants you to think so, it has not garnered enough market share to be considered a strong 3rd place contender.

Who brought up BB or MS??

 

[lchlch]

Yes. Do you remember Amazons fight over the Kindle App on iOS? Same premise. Spotify is just one company affected by this issue.

If your talking about the ebook issue, that was an entirely different issue.

It was anti competitive because Apple colluded with other publishers to fix prices for ebooks. It had nothing to do with the current discussion.

 

[dk001]

You are right, the music industry is gravitating towards streaming music and Apple is getting on board before they become irrelevant in the industry. I completely understand this and think Apple has the right to do this. But, Spotify is the largest streaming service to date and pretty much single handedly brought streaming to the mainstream. So, Spotify is the reason Apple and others are getting into the streaming business. If Apple Music doesnt directly compete with Spotify, then what does it compete with?!? It definitely is not so different it deserves its own category!....

It is gravitating however where is the sustainable business model? Spotify is another in a long line of entities that have tried this. So far they are marginal at best. No we have Apple Music in the mix.

I, for one, am not sure this will end well for anyone.

 

[MagnusVonMagnum]

And yet when it's a 6-year old super abstract patent, they allow them to SUE SUE SUE to "snuff out competition" (or at least to shake down the competition, although it most cases it's not really "competition" they're shaking down since they don't actually "compete", but rather just sue as patent trolls so love to do).