Spotify Calls Apple's App Store Restrictions 'An Abusive Power Grab'

[Unregistered 4U]

Spotify seems to have had difficulty encouraging free tier users to upgrade to paid tiers

I know I’m not bothered by the ads. A friend shares playlists with me and for me it’s like radio. When I want uninterrupted listening, I’ve got Apple Music So, Spotify’s making at least THAT money off me!

I think the endgame for Spotify was always “be purchased by Apple, Google, Amazon, or Facebook, or someone like that” and the strategy was “focus on market share to get more VC capital to operate on until the acquisition”, but none of these firms were willing to pay for Spotify’s valuation and instead either rolled their own streaming services or purchased streaming services with more sane valuations.

You could say Beats “beat” them to the punch

 

[deevey]

I think the issue with that, is that they can't provide a link within the app to their website to facilitate the payment. Apple specifically prohibits this.

But I think Spotify is big enough that their users would figure out what's what without Spotify having to tell them where to pay.

Spotify's business plan currently relies on IAP's ... if it didn't they would not need to shell out a penny to Apple. Obviously IAP's are a product of value to Spotify, something that needs to be paid for.

They could just pull a Netflix, stop paying 30% and increase their marketing budget accordingly to subscribers prior to persons installing the app.

But, I guess they ran the numbers and discovered that the advertising budget required would be more than the cost of IAP's.

 

[deevey]

what does even mean? I searched up SFA and all I could find was reference to visual arts artists few and far between being recognized. So I’m confused what SFA is in your post.

SFA = Sweet F**k All

 

[Krizoitz]

This is not on Spotify. Spotify negotiated the rate with the publishers. Blame the publisher, not Spotify. If an artist didn’t want to be on Spotify, they can pull their catalog.

And if Spotify doesn’t want to be on the App Store they can pull their app. Done and done.

 

[Krizoitz]

Does Apple pay Spotify a 30% cut of the Apple Music subscription fee? No? Then it's not an equivalent price.

Why should they? Spotify isn’t necessary for Apple Music. iOS, the App Store and the iPhone are necessary for Spotify.
If I own a mall and I also want to operate a store in that mall, guess what? My store doesn’t have to pay me rent! But other stores do, because it’s MY mall. Spotify wants a spot in the mall without having to pay rent. Is it a little harder for them to make as much money since my store doesn’t have the added expense of rent? Sure. But that’s why I own the mall to begin with. It’s a business decision. So yes, as the platform owner Apple has some advantages, that’s the whole point of owning the platform!
Spotify can either decide it’s still worthwhile to offer their service on Apples platform or it can go elsewhere. They aren’t entitled to a spot in the App Store, no one is. Unless/until Apple is actually a monopoly of the smartphone market (and it’s nowhere close) then consumers have choice.

 

[MacBH928]

I love how these corporates slitting each other throats in court, meanwhile they continue to conduct business buying and selling, requesting information and calling back.

 

[PlayUltimate]

IMO, Apple's problem is that they operated their store via a consignment model. A consignment store decides what products will be sold in their store and gets a cut, often quite high, when the product sells. This lead to the perception that the App Store was more open than it was. But it also led people to argue about the "cut" that the store owner was taking.
If Apple is "forced" to change the App Store, they may change it from a consignment store to more like a grocery store. Apple would still curate what is sold but pricing agreements would be made directly with Apple and Apple would then determine what price to charge. This would be a throw back to the days of software devs dealing with software sellers.
Side-loading will likely never happen. And despite the argument "I own my phone", which is true, Apple still owns and only licenses the iOS/iPadOS Software.

 

[andresro14]

I really can't believe how many people defend apple just because. Don't even think in the real situation.
All of you repeating the same thing. You look like a Political Party or a Secta 😂

 

[I7guy]

I really can't believe how many people defend apple just because. Don't even think in the real situation.
All of you repeating the same thing. You look like a Political Party or a Secta 😂

You know this works both ways.

 

[cmaier]

I really can't believe how many people defend apple just because. Don't even think in the real situation.
All of you repeating the same thing. You look like a Political Party or a Secta 😂

They aren’t defending Apple “just because.” They are explaining in detail why. You just don’t agree.

 

[Abazigal]

Does Apple pay Spotify a 30% cut of the Apple Music subscription fee? No? Then it's not an equivalent price.

Apple pays Apple a 100% cut of their Apple Music subscription fees.

 

[The-Real-Deal82]

I really can't believe how many people defend apple just because. Don't even think in the real situation.
All of you repeating the same thing. You look like a Political Party or a Secta

This is Mac Rumours and Apple is like a religion to some people here. I don’t get it either lol.

 

[macfacts]

That’s a market in the same way Mc Donald’s restaurant burger distribution is. Meaning it isn’t.

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

 

[Havoc035]

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

Apple has the right to control the pricing as these apps are sold in it’s store. As would Ford have when they would hypothetically sell other makers’ car parts in their store. Because it’s their store. Also Apple isn’t forcing anyone to be on the App Store or to use it as a means of buying a service.

Another way to look at it. If iOS app distribution would be a market. Which again, I don’t think it is as it is far too narrow, then Nintendo Switch, PS5 and Xbox game distribution would also each be a market. Those markets would have even bigger problems as there is an actual monopoly there. There are no web apps and those companies always earn on sales.

Declaring all of the above markets would effectively outlaw closed systems. That could be very undesirable in some cases.

 

[I7guy]

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

Apple has every right to control what's on it's platform as long as laws aren't being broken. Apple doesn't control the pricing, the dev does. Think of the app store as a grocery store.

 

[Abazigal]

I really can't believe how many people defend apple just because. Don't even think in the real situation.
All of you repeating the same thing. You look like a Political Party or a Secta

Simply. I just don’t think Apple is in the wrong here.

 

[macfacts]

Apple has the right to control the pricing as these apps are sold in it’s store.

... That is the problem, apple is forcing them to sell in Apple's iOS app store. You think it isn't technically possible for ford to design a hardware lock to prevent car users from using unauthorized car parts? Ford doesn't do that cause they would be slapped with lawsuits like apple is facing now.

 

[Krizoitz]

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

The same right WalMart has to decide what products can be sold in their stores. Or Nintendo/Sony/Microsoft what games are allowed on their platforms. Or HBO what movies are allowed on their channel. Or a movie theater what movies they show. That’s a great example actually. Just because you make your own home movie doesn’t mean HBO or Regal Cinemas have to show it.
Like wise just because you make an app doesn’t mean Apple has to allow it in the AppStore. Apple could decide not to allow ANY apps on the iPhone if they wanted. Either making an app for iPhone is worth it to you or it’s not. Either Apples terms are worth agreeing to or they aren’t. If you don’t like them, write your app for Android, or Windows, or whatever. Or make your own smartphone OS.

 

[Krizoitz]

... That is the problem, apple is forcing them to sell in Apple's iOS app store. You think it isn't technically possible for ford to design a hardware lock to prevent car users from using unauthorized car parts? Ford doesn't do that cause they would be slapped with lawsuits like apple is facing now.

No they aren’t. Not one single individual or company is forced to sell an App through the App Store. Not a single one. They have all chosen to make and sell an app on iOS, but Apple didn’t put a gun to their head and make them.
Meanwhile just because Apple is facing lawsuits doesn’t mean those lawsuits are valid. Apple can (and has) won them before.

 

[Unregistered 4U]

Another way to look at it. If iOS app distribution would be a market. Which again, I don’t think it is as it is far too narrow, then Nintendo Switch, PS5 and Xbox game distribution would also each be a market. Those markets would have even bigger problems as there is an actual monopoly there. There are no web apps and those companies always earn on sales.

Declaring all of the above markets would effectively outlaw closed systems. That could be very undesirable in some cases.

You’re right, it’s narrow, but, in terms of “monopoly”, anyone’s free to define a “market” as broadly or as narrowly as they like. However, there ARE absurd definitions of market that have never stood in court. One rule of thumb I’ve used is whether or not the “market” definition includes a company’s trademarked product name. “Standard Oil” would be an absurd definition of a market. “Oil” would be fairly widely acceptable as the definition of a market. No one can define Apple’s monopoly without using Apple’s trademarked product names so it’s absurd on the face of it.

 

[kc9hzn]

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

I’m not really sure how well the Ford or McDonalds analogies actually work. McDonalds is famously vertically integrated, to a higher degree than even most (inter-)national fast food restaurants (if McDonalds were to introduce a Beyond Meat type burger like Burger King has, McDonalds is so vertically integrated that they’d manufacture their own meat substitute burgers instead of using Beyond Meat’s existing production capacity). And technically, the McDonalds employees making the burgers aren’t employees of McDonalds, they’re employees of a McDonalds franchise owner doing business as McDonalds.

I know for a fact that Ford negotiates some strict licenses with its parts suppliers. I have a sibling that works at a factory that produces parts for Ford vehicles. My sibling’s company’s facilities are located immediately adjacent to the Ford plant, the company uses JIT production, so Ford uses their parts as soon as they’re finished, and, if there are production or labor issues at the Ford plant that reduce the number of parts needed, the people at the supplier are adjusted at real time, and production may even shut down.

That’s the trouble with analogies, they don’t necessarily work well across industries or businesses. The closest analogy to an App Store is actually streaming media providers or video game consoles’ electronic storefronts, and most of these firms operate on tighter rules than the App Store does. In reality, it seems that Apple’s policies are actually either comparable or pretty lenient compared to those of its nearest counterparts or to most businesses in general.

 

[iapplelove]

Wrong.

Spotify's paid subscribers hit 155M, but it's still losing money - 9to5Mac

Spotify's paid subscribers hit 155M at the end of the last quarter of last year, up 24% year-on-year. Apple Music's last-declared ...

9to5mac.com

But it’s not wrong

 

[bastoshaq]

You're spot on, but this forum is filled with appholes that cannot process that Apple is kind of a d-bag company to do business with.

That doesn't mean you can't love Apple products, but Apple is for the most part, a copy cat machine.
The Newton was the first hand held device of its kind.... I know there is one more.... ipod? No. They copied that. iPad? No, copied that too. iPhone? No, copied that too. Apple Music? No, they bought Beats who was also not first and have literally never changed it except cosmetically.... copy cat there.

Facts and reality to appholes are like facts and reality to retrumplicans. They just don't mesh.

30% for virtual goods is insane. Physical goods don't get that kind of mark up in most universes. Forget spotify, all these serves lose on the app store.

I must say that I do like what you say in regards that because Apple has managed to put a product in such a great place in the market (iPhone), that it is quite easy for them to add features that others do right into their product. The 30% thing can be skipped if done like Netflix but I'm not here to say if 30% is too much.

Putting the 30% thing aside, how should Apple be dealt with regarding the "copy" of a feature/app and put it in the phone? Should there be pattens for software?
Should Apple not be allowed to enhance the phone experience because there is an app for it? Someone said in a thread like this that maybe iOS should come with just the AppStore and you should just download the apps that you want - Safari for example to be in the store instead of built in and so on.

And now regarding any type of payment towards Apple, shouldn't they be rewarded for all the R&D and marketing costs spent to make the iPhone the product that it is today?

I'm not really into debating the 30% but I do think that Apple should get something for building such a product that is a great delivery system for other business (applications and such).

 

[bastoshaq]

The burgers McDonald sells in their restaurant are made by McDonald s employees. The iOS apps apple sells aren't made by apple. What right does apple have to control how those apps are made or sold.

Ford can't do that to companies that make car parts. Ford also can't force them to sell in ford stores with hardware/software locks.

I see the 30% as the way Apple created to be paid for the delivery system that the iPhone/iOS is. Maybe the number is high. Maybe the model is wrong. But one cannot expect Apple to just throw away their market position and just allow other business to use their product to make money and not see a thing.

 

[kc9hzn]

Spotify's business plan currently relies on IAP's ... if it didn't they would not need to shell out a penny to Apple. Obviously IAP's are a product of value to Spotify, something that needs to be paid for.

They could just pull a Netflix, stop paying 30% and increase their marketing budget accordingly to subscribers prior to persons installing the app.

But, I guess they ran the numbers and discovered that the advertising budget required would be more than the cost of IAP's.

But the thing people seem to be missing (and that Spotify is deliberately obscuring) is that Spotify doesn’t offer IAP subscriptions on iOS, instead they’re already doing what Netflix is doing. Basically, they want to advertise subscriptions in the app without paying anything to Apple, though I’m not actually convinced that it would lead to the conversion rates Spotify would need to be profitable (Spotify’s problems aren’t connected to Apple, they’re self-inflicted in my opinion, they’ve screwed themselves over with all these purchase bundles, I legitimately wonder what percentage of their customers pay full price for the service).