Spotify Accuses Apple of Using App Store Approval Process as a 'Weapon to Harm Competitors'

[AdonisSMU]

Friend: Hey I found this cool app called Spotify, it's so awesome having all this music for $13 per month
Me: Wait, why are you paying $13? It should be 10 bucks
Friend: It's $13 on the app store
Me: Apple is overcharging you because... no idea, I have no idea why Apple needs to steal 30% every month from you
Friend: wow, such evil greed, what a rip off.

Spotify isn't just the victim here, every user is affected and Apple's brand image is being hit too.

Thats on Apple. *shrugs* or people will say make sure you subscribe through Spotifys website...and keep it moving. Most people don't care that much. Spotify is still one of the most downloaded apps in the App store revenue wise.
[doublepost=1467442225][/doublepost]It's like when you go to the grocery store and you have the store brand of something that's cheaper than the other big name versions of the same item like ships or nuts or deodorant etc... No one complains that the Walgreens/Duane Reade brand of product is cheaper than the Frito Lays or Gillette products... People pick and choose what they want regardless. You don't see ads telling people they can get it for a cheaper rate by going to the Gillette or Frito Lay website.

Most people just assume the store brand is not as good as the other name brands. So... I'm not sure what you're saying is entirely true.

 

[akash.nu]

Friend: Hey I found this cool app called Spotify, it's so awesome having all this music for $13 per month
Me: Wait, why are you paying $13? It should be 10 bucks
Friend: It's $13 on the app store
Me: Apple is overcharging you because... no idea, I have no idea why Apple needs to steal 30% every month from you
Friend: wow, such evil greed, what a rip off.

Spotify isn't just the victim here, every user is affected and Apple's brand image is being hit too.

It's the app developer who set the price point, not Apple. I'm baffled to see still today people don't know that.

 

[trifid]

It's the app developer who set the price point, not Apple. I'm baffled to see still today people don't know that.

It's Apple that sets the 30% premium on subscription services, not developers. For the streaming music market that has such low profit margins (Spotify is losing money currently), they have to pass Apple's 30% theft to the end user. I'm baffled some people don't seem to realize this.

 

[akash.nu]

It's Apple that sets the 30% premium on subscription services, not developers. For the streaming music market that has such low profit margins (Spotify is losing money currently), they have to pass Apple's 30% theft to the end user. I'm baffled some people don't seem to realize this.

As explained multiple times before, the 30% is for everyone and as a business Apple does not need to worry about individual businesses that use their platforms. It's up to the developers to make profit after all the expenses and it's their decision to pass it on to the user or consume within the business. The terms are clear and Spotify is trying a ****** stance here.

It's like saying I'm not going to pay for raw materials because my profit margin is low. People who are arguing against Apple, have you guys ever done any business yourselves?!

 

[Michael Goff]

Friend: Hey I found this cool app called Spotify, it's so awesome having all this music for $13 per month
Me: Wait, why are you paying $13? It should be 10 bucks
Friend: It's $13 on the app store
Me: Apple is overcharging you because... no idea, I have no idea why Apple needs to steal 30% every month from you
Friend: wow, such evil greed, what a rip off.

Spotify isn't just the victim here, every user is affected and Apple's brand image is being hit too.

Most people probably don't see it like that. But good try.

 

[trifid]

As explained multiple times before, the 30% is for everyone and as a business Apple does not need to worry about individual businesses that use their platforms. It's up to the developers to make profit after all the expenses and it's their decision to pass it on to the user or consume within the business. The terms are clear and Spotify is trying a ****** stance here.

Apple, like any business has to worry if their business impositions are too harsh. In fact Apple will now differentiate between single purchase apps and subscription apps, where the 30% margin on subscription apps drops to 15% on the second year (too little too late still). So you are wrong in saying "Apple doesn't have to worry". Any business 'worries' and adjusts as necessary. Do you even done any business yourself?

 

[akash.nu]

Apple like any business has to worry if their business impositions are too harsh, in fact Apple will now differentiate between single purchase apps and subscription apps, where the 30% margin on subscription apps drops to 15% on the second year (too little too late still). So you are wrong in saying "Apple doesn't have to worry". Any business 'worries' and adjusts as necessary. Do you even done any business yourself?

I agree that businesses need to worry but doesn't mean they have to change their terms just because some developer has thrown a hissy fit about something that has been clearly defined in the terms and is well known to the developer community. And to answer your last question, yes and multiple.

 

[castlerock]

Thats on Apple. *shrugs* or people will say make sure you subscribe through Spotifys website...and keep it moving. Most people don't care that much. Spotify is still one of the most downloaded apps in the App store revenue wise.
[doublepost=1467442225][/doublepost]It's like when you go to the grocery store and you have the store brand of something that's cheaper than the other big name versions of the same item like ships or nuts or deodorant etc... No one complains that the Walgreens/Duane Reade brand of product is cheaper than the Frito Lays or Gillette products... People pick and choose what they want regardless. You don't see ads telling people they can get it for a cheaper rate by going to the Gillette or Frito Lay website.

Most people just assume the store brand is not as good as the other name brands. So... I'm not sure what you're saying is entirely true.

Spotify via the website is not as good as Spotify via IAP? That's really grasping at straws.
[doublepost=1467480417][/doublepost]

Most people probably don't see it like that. But good try.

By "most people" you mean "MacRumors forum users"?

 

[Michael Goff]

Spotify via the website is not as good as Spotify via IAP? That's really grasping at straws.
[doublepost=1467480417][/doublepost]
By "most people" you mean "MacRumors forum users"?

No, most MR users seem to love the type of narrative that ends with Apple being horrible.

 

[castlerock]

No, most MR users seem to love the type of narrative that ends with Apple being horrible.

It'd be interesting to analyze this objectively because we quite apparently come to opposite conclusions from reading the same posts. It would also be interesting to see whether the "pro-Apple" or "anti-Apple" people are the "loudest voices" in terms of persistence in arguing the same point throughout a thread (not pointing fingers here either).

Really, just as validation of whether there really is a bias. Sorry to stray off topic.

(edit: put the pro/anti Apple in quotes because even though I usually post from an Apple-skeptic point of view I am actually a pretty loyal customer and am posting from my MBP.)

 

[Michael Goff]

It'd be interesting to analyze this objectively because we quite apparently come to opposite conclusions from reading the same posts. It would also be interesting to see whether the pro-Apple or anti-Apple people are the "loudest voices" in terms of persistence in arguing the same point throughout a thread (not pointing fingers here either).

Really, just as validation of whether there really is a bias. Sorry to stray off topic.

Everyone is biased by their own experiences. The only thing we can do is try to set our own bias aside.

 

[steve123]

Are you the product or the customer? Are you an Apple product or Apple customer?


Car analogy:
Spotify wants to sell a music subscription to a group of people (iPhone owners).
Home Depot wants to sell lumber to a group of people (Ford truck owners).

Should Ford get 30% of the sales Home Depot makes?

Huh? Spotify is selling their app and service through Apple's store. If I walked into a Ford dealership and purchased some lumber, of course the dealership would take a cut.

 

[castlerock]

Huh? Spotify is selling their app and service through Apple's store. If I walked into a Ford dealership and purchased some lumber, of course the dealership would take a cut.

I think you're misunderstanding the point. The Ford truck is Apple, and the truck is being used to transport things home from Home Depot (Spotify). Once you, I don't know, install the bed liner (app) in the truck, why should Ford (Apple) be involved any more?

Making tortured analogies is fun

 

[Cycling Asia]

Please explain that one. What is the fuel supposed to be? The car is the subscription payment - is the fuel something else one has to pay Spotify for? The app is not the car, it is the showroom inside the mall for a SAAS like Spotify.

In my statement, the showroom is the app store, the car is the the spotify app, and the fuel is the spotify subscription.

Apple (owner of the showroom) requires app developers (car manufacturers) to only sell subscription services (the fuel) using the app store (the showroom).

The only thing that isn't accurate in the above analogy is that car manufacturers don't sell fuel (yet)

 

[Michael Goff]

In my statement, the showroom is the app store, the car is the the spotify app, and the fuel is the spotify subscription.

Apple (owner of the showroom) requires app developers (car manufacturers) to only sell subscription services (the fuel) using the app store (the showroom).

The only thing that isn't accurate in the above analogy is that car manufacturers don't sell fuel (yet)

Also that you can sell your subscriptions outside of the app. So I guess the analogy sucks big time.

 

[toph2toast]

Let me address your assertion. I have applauded and been the fan person for many Apple initiatives, BUT, I do call Apple out when I see there is an issue at bay that I believe needs attention. My criticisms are all geared towards making Apple a better business on all fronts.
For the record, I've never said "Android did it first" or "Eddy Cue should get fired". I do not own anything Android, only one device I own is Windows, the rest I own are Macs/iOS. I'm an Apple fan, BUT, as I said, I do call Apple out when I see there is an issue at bay.
I'm not stressed at all about this situation. If it's proven to be anti competitive, then Apple should accept the consequences and restructure its business to operate better, right by it's own values, shareholders and customers.

Hopefully you have a better way at "calling out" Apple other than replying to comments on MacRumors, because I sincerely doubt they use this site as a way to gather feedback...

 

[LordVic]

Ok, I've stewed on this topic for a while now and Have come to my own personal opinion.

First:
I Find that Apple's policies aren't in the industries best interest. they're draconic with their rules, and they're clearly designed around making Apple the biggest profit at the expense of others interests. I find their beahaviour in a lot of their profiteering to be Morally questionable and this behaviour has only gotten worse over the last few years.

BUT

They aren't doing anything illegal here. Its just ******, manipulative self serving business practice. Apple might monopolize the App store on iOS, but at < 40% of the entire worlds smart Phone usage, Apple is NOT a monopoly and has the right to choose their business practices, as ****** as I may think it.

Spotify has the right, in a free market to either do business with Apple, or go elsewhere. In Fact, if Spotify was serious about how much they hated Apple's policies, they would do so (as believe it or not, there ARE developers who don't touch iOS). Heck, it could even be a "sweet justice" if users jump off iOS devices for other platforms to follow Spotify (Though I doubt it would be significant)

I do have ONE caveat:

In modern day of age, Taking 30/15% of subscriptions while ALSO providing a competing service that does NOT suffer from the additional fees IS anti-competitive behaviour, whether Apple, or the fans want to admit it. It DOES put an unfair advantage to Apple product and profitability over the competition in a way that no other developer can.

What I Think should happen for fairness all around: For all subscription services on iOS that Apple directly competes with, Apple Can only collect fee on the first 3 months of service. This is to help with the costs of the App store and the cost of doing business. But, should(must) not collect further fees from subscription services. This would go in line with the fact that once a user has downloaded and paid for a subscription, Apple really isn't part of the picture anymore. They're not providing the services bandwidth, infrastructure, or in this case, even assisting with licensing.

This would ensure that overall, Apple does get to collect revenues for service of using the App store, but doesn't get to be in an abusive position that favours their services over competition.

 

[lowendlinux]

Is it just me or is this Spotify v Apple stuff starting become like the Samsung v Apple?

 

[LordVic]

I agree that businesses need to worry but doesn't mean they have to change their terms just because some developer has thrown a hissy fit about something that has been clearly defined in the terms and is well known to the developer community. And to answer your last question, yes and multiple.

You're right. Apple doesn't have to do anything to appease developers who develop for their platform.

But, Developers could also tell Apple to go pound dirt and go elsewhere.

Just like Apple, Spotify and everyone else are businesses too. They're in it to make profit or at least try. If the terms and conditions that Apple are forcing are unreasonable, they run the risk of developers walking away from the platform.

At the end of the day, one of Apple's strengths was always the App ecosystem and it's strong developers. Its often toughted as one of their biggest strengths (even now). What happens if enough developers think like Spotify does that in today's razer thin margins game, that Apple is completely unreasonable?

Do you, as the consumer, believe that Apples 30% profiteering is more important than getting the beset developers developing the best Apps for the platform? Or, do you think that its in Apples best interests to help their developers also be profitable?

This Apple centric mindset that only Apple needs to be profitable is absolutely ludicrous and anyone who believes this needs a reality check. If Spotify, and the other subscription apps aren't profitable because of Apple's fees, and they go out of business or leave iOS, we all suffer as consumers due to lack of choice and competition.

 

[BaldiMac]

It DOES put an unfair advantage to Apple product and profitability over the competition in a way that no other developer can.

Again, why is having investing in a platform to give yourself an advantage unfair?

If Spotify, and the other subscription apps aren't profitable because of Apple's fees, and they go out of business or leave iOS, we all suffer as consumers due to lack of choice and competition.

Spotify isn't profitable regardless of Apple's fees. Other subscription companies are profitable despite Apple's fees.

 

[akash.nu]

You're right. Apple doesn't have to do anything to appease developers who develop for their platform.

But, Developers could also tell Apple to go pound dirt and go elsewhere.

That's not happening right now. Nobody else seems to have any issues with what the terms and conditions say. Spotify is playing a nasty stunt here.

Just like Apple, Spotify and everyone else are businesses too. They're in it to make profit or at least try. If the terms and conditions that Apple are forcing are unreasonable, they run the risk of developers walking away from the platform.

It's not that the terms have changed for Spotify. Millions of developers are going with it and has been doing for years now. So no they don't run any risk, at least not until there's another better option for developers.

At the end of the day, one of Apple's strengths was always the App ecosystem and it's strong developers. Its often toughted as one of their biggest strengths (even now). What happens if enough developers think like Spotify does that in today's razer thin margins game, that Apple is completely unreasonable?

As mentioned above, that's not the case in reality. Spotify is run on a flawed business model, as discussed many times before. It's not Apple's responsibility to change their policies to accommodate one developer. If they agree with Spotify then the whole platform will crumble because others will do the same.

Do you, as the consumer, believe that Apples 30% profiteering is more important than getting the beset developers developing the best Apps for the platform? Or, do you think that its in Apples best interests to help their developers also be profitable?

To be honest, I don't think general consumers give a **** about what's happening between apple and Spotify. People generally have way better things to do. It's us tech heads who get worked up by stuff like this. Having said that I look at it from a pure business perspective and I am with Apple on this.

This Apple centric mindset that only Apple needs to be profitable is absolutely ludicrous and anyone who believes this needs a reality check. If Spotify, and the other subscription apps aren't profitable because of Apple's fees, and they go out of business or leave iOS, we all suffer as consumers due to lack of choice and competition.

It's not Apple centric mindset. It's simple business sense and logical reasoning. There's no lack of competition. Spotify is a startup and things like this is a normal thing around the world. They didn't have a proper revenue model. Have you seen / read through their initial pitch?!

 

[LordVic]

That's not happening right now. Nobody else seems to have any issues with what the terms and conditions say. Spotify is playing a nasty stunt here.

It's not that the terms have changed for Spotify. Millions of developers are going with it and has been doing for years now. So no they don't run any risk, at least not until there's another better option for developers.

As mentioned above, that's not the case in reality. Spotify is run on a flawed business model, as discussed many times before. It's not Apple's responsibility to change their policies to accommodate one developer. If they agree with Spotify then the whole platform will crumble because others will do the same.

To be honest, I don't think general consumers give a **** about what's happening between apple and Spotify. People generally have way better things to do. It's us tech heads who get worked up by stuff like this. Having said that I look at it from a pure business perspective and I am with Apple on this.

It's not Apple centric mindset. It's simple business sense and logical reasoning. There's no lack of competition. Spotify is a startup and things like this is a normal thing around the world. They didn't have a proper revenue model. Have you seen / read through their initial pitch?!

I'm not dissagreeing with this, if you read my comment previous to the one I posted

I don't agree with Spotify in this case. If they have such an issue with Apples terms, They can either chose to change their business models or go elsewhere. There's no monopoly here by Apple. There IS an unfair advantage, But it's one that while I find morally / ethically questionable, is perfectly and reasonably legal.

But while I think Apple is within their rights to behave this way, I don't believe it's in the industry's best interest and they SHOULD attempt to work better with developers to figure out in 2016 what a better model is to attract and help developers to their platform, not try and force them out and be uncompetitive.

However, yes, in this case, it seems like Spotify really is really ****** at running their own business, and one case of someone complaining doesn't necessarily mean there's an overall problem.

 

[akash.nu]

I'm not dissagreeing with this, if you read my comment previous to the one I posted

Oh, my bad. lol.

I don't agree with Spotify in this case. If they have such an issue with Apples terms, They can either chose to change their business models or go elsewhere. There's no monopoly here by Apple. There IS an unfair advantage, But it's one that while I find morally / ethically questionable, is perfectly and reasonably legal.

It's not really "unfair" as such. Spotify joined the game knowing Apple is big in music. There are loads of other audio streaming services on both iOS and Android, they're doing just fine including Google music.

The issue is with Spotify putting adverts in the app to get subscription from outside. They can just do what everyone else is doing & use other methods of adverts. It's as simple as that. They're bringing in unsubstantial claims to basically gain attention. I personally think it's a PR stunt to advertise the platform.

 

[LordVic]

Oh, my bad. lol.

It's not really "unfair" as such. Spotify joined the game knowing Apple is big in music. There are loads of other audio streaming services on both iOS and Android, they're doing just fine including Google music.

The issue is with Spotify putting adverts in the app to get subscription from outside. They can just do what everyone else is doing & use other methods of adverts. It's as simple as that. They're bringing in unsubstantial claims to basically gain attention. I personally think it's a PR stunt to advertise the platform.

Apple was in the game for music purchases when Spotify came to the platform. Apple coming out years later with t heir own music streaming service that isn't subject to the 30% is an unfair advantage in an industry that Apple is believe it or not, The new kid on the block.

but again, you're right, that the 30% isn't new. this isn't some shock to Spotify. They built a business model that did NOT take this into account, despite being on the platform for yeasr. Thats on them for not being agile enough to adapt.

these are two seperate issues IMHO. Spotify being a ****** company, doesn't mean Apple isn't also taking an unfair advantage of their platform as well. its an unfair advantage, but one I believe they're in their right to try. Even if I don't believe it's in the consumers overall best interest

 

[akash.nu]

Apple was in the game for music purchases when Spotify came to the platform. Apple coming out years later with t heir own music streaming service that isn't subject to the 30% is an unfair advantage in an industry that Apple is believe it or not, The new kid on the block.

but again, you're right, that the 30% isn't new. this isn't some shock to Spotify. They built a business model that did NOT take this into account, despite being on the platform for yeasr. Thats on them for not being agile enough to adapt.

these are two seperate issues IMHO. Spotify being a ****** company, doesn't mean Apple isn't also taking an unfair advantage of their platform as well. its an unfair advantage, but one I believe they're in their right to try. Even if I don't believe it's in the consumers overall best interest

The 30% is not just for music though. It's for any non consumable product sold within the apps including points, coins, level unlock and all the other IAP transactions.