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Spotify CEO Daniel Ek Speaks Out on Dispute With Apple Over App Store Policies
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I'm with Spotify on this. There should be no reason Apple should be taking 30% of Spotify's subscription fees. The same goes for any subscription service that isn't leveraging Apple's own developed apps. If Spotify wanted to charge a fee to buy their iOS client, Apple can get their cut. If Apple allowed Spotify to somehow allow customers to use Apple's Music app, Apple should get a cut. 30% is excessive and should be drastically reduced.
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why should apple give spotify a free access to the platform then? business is business.
whats apples monetary benefit from this?
When Spotify's venture capitalists created Spotify they knew the App store rules but chose to participate. They were comfortable riding the App store to become the largest, by far, streaming music company in the world, and now complain, because they have a poorly run business that has lost hundreds of millions of dollars all from the get go.
Thanks to Apple they have access to a billion customers on a platform that Apple spent tens of billions creating and spends billions maintaining every year. For the bulk of their customers, which the CEO is misleading people about, they pay a commission of 15% to have access to that platform and customer base. A huge bargain by any measure.
Spotify also pays artists poorly, about half of what Apple pays, and Spotify is fighting recent efforts to pay musicians and artists an increased rate. Apple is supporting that effort.
Spotify is understandably panicking that Apple may be about to announce a package deal with music and video, etc., that will push Spotify's poor business model even further into the red.
Thanks to Apple they have access to a billion customers on a platform that Apple spent tens of billions creating and spends billions maintaining every year. For the bulk of their customers, which the CEO is misleading people about, they pay a commission of 15% to have access to that platform and customer base. A huge bargain by any measure.
Spotify also pays artists poorly, about half of what Apple pays, and Spotify is fighting recent efforts to pay musicians and artists an increased rate. Apple is supporting that effort.
Spotify is understandably panicking that Apple may be about to announce a package deal with music and video, etc., that will push Spotify's poor business model even further into the red.
Don't know if this is a good thing or not, but I do know that anything that kicks Apple's arrogance to the curb is good.
When I buy my iPhone it should be mine, not Apple's. It is not Apple's responsibility to so tightly control what I can and cannot put on the iPhone I own.
Sure they can recommend. Sure they make it a little more difficult to install certain types of apps. Sure they can prevent apps that have security issues. Sure they can prevent apps that mislead in the app description. But, IMO they should not have absolute control over my device. If I want to put a competing app on my iPhone, Apple should let me.
In the end, Apple is trying to compete by monopoly not quality or price. It's almost as if Apple knows it cannot compete with its poor service offerings, so they use monopolistic control to win. If allowed to continue this only means that Apple services will continue to be poor and uncompetitive.
When I buy my iPhone it should be mine, not Apple's. It is not Apple's responsibility to so tightly control what I can and cannot put on the iPhone I own.
Sure they can recommend. Sure they make it a little more difficult to install certain types of apps. Sure they can prevent apps that have security issues. Sure they can prevent apps that mislead in the app description. But, IMO they should not have absolute control over my device. If I want to put a competing app on my iPhone, Apple should let me.
In the end, Apple is trying to compete by monopoly not quality or price. It's almost as if Apple knows it cannot compete with its poor service offerings, so they use monopolistic control to win. If allowed to continue this only means that Apple services will continue to be poor and uncompetitive.
You want access to the world's most profitable mobile consumer base, you pay and play by their rules.
You can't sell things on Amazon without paying them. Apple built the iOS/App Store infrastructure. That platform is free to users (you don't specifically pay to access the app store), so it's a royalty from those using it to profit.
"The issue doesn't end there, as Apple's App Store review guidelines prevent Spotify from letting users know that they can subscribe to Premium for $9.99 per month on the web or other platforms."
Well, I guess this complaint is one way to get around that
Boo hoo, Spotify, sounds like pointing the finger that you're not just a competitor, but one with a worse value proposition to consumers. If you offer the same at the same price point, don't expect the same profit on someone else's backs.
You can't sell things on Amazon without paying them. Apple built the iOS/App Store infrastructure. That platform is free to users (you don't specifically pay to access the app store), so it's a royalty from those using it to profit.
"The issue doesn't end there, as Apple's App Store review guidelines prevent Spotify from letting users know that they can subscribe to Premium for $9.99 per month on the web or other platforms."
Well, I guess this complaint is one way to get around that
Boo hoo, Spotify, sounds like pointing the finger that you're not just a competitor, but one with a worse value proposition to consumers. If you offer the same at the same price point, don't expect the same profit on someone else's backs.
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Don't like Apple's policies? Don't use Apple's services. Easy.
I feel like Spotify's CEO is talking past the obvious -- Spotify doesn't own or maintain iTunes or the App Store. Nor does it own or maintain an entire ecosystem of hardware, like iPhones and iPads. All of those are Apple's property.
If you wish to directly sell your goods on Apple's turf, you have to pay for the privilege of doing so. Otherwise, go make your own hardware and app store.
If you wish to directly sell your goods on Apple's turf, you have to pay for the privilege of doing so. Otherwise, go make your own hardware and app store.
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This right here is why I side with Spotify. I understand Apple enforcing the 30% rule because Apple provides billing management and other technical services for that 30%, but to not allow Spotify to let people know they can sign up elsewhere? That feels like a tight grip that has clear competitive implications.
The irony is that Spotify pay their artists an absolute pittance. Its virtually legalised piracy. So they've got a cheek to whinge about what Apple is up to..
If that's what you heard, you are in dire need of an ear cleaning.
The arguments laid out by Spotify are cogent, and more importantly right. As pointed out by someone further up thread, Apple is a marketplace owner and participant. As such they bear a responsibility to act fairly. Else, they're going to end up fined like MS and Google.
Let's say a Content Owners charges $2.50 to anyone who wants to offer it for download, and both Apple and Competitor offer it to download. Apple sets the price at $3. If Competitor sets the price at $3, it has to pay Apple $1, and thus only gets $2. Thus, at the $3 price point, Competitor loses $0.50 per download AND Apple makes $1 for each of Competitor's downloads, and Apple makes $0.50 for each of Apple's downloads. Competitor can't price it higher than Apple, because they would lose customers.
Apple built an amazing app store and they pretty much own half of a duopoly on app stores. Now they're abusing the their market position to unfairly advantage themselves in a completely different market: streaming music. This is classic abuse and antitrust.
Apple built an amazing app store and they pretty much own half of a duopoly on app stores. Now they're abusing the their market position to unfairly advantage themselves in a completely different market: streaming music. This is classic abuse and antitrust.
IMO, if they use Apple's infrastructure for anything, in this case distribution, Apple should get a cut to help pay for maintenance costs. However, if the app doesn't use Apple infrastructure, in this case the actual streaming of music, Apple should not get a cut. For free apps, I could see Apple maybe charging a monthly or yearly fee for storing & distributing the app.
If that is the case, then apple is double dipping. Making customers pay for iOS/the platform and then asking devs to pay again.
A lot of ignorance as to how the marketplace actually works be displayed.
Spotify has options. They don't have to use Apple at all. They can go the the Windows Apps store or Google's App store. Of course they then miss out on Apple's user base, but they do have options. If they don't like Apple's rules, go elsewhere.
Spotify has options. They don't have to use Apple at all. They can go the the Windows Apps store or Google's App store. Of course they then miss out on Apple's user base, but they do have options. If they don't like Apple's rules, go elsewhere.
The reality is that society needs to be pragmatic. Sure Apple made the platform, but they are also a multi-billion dollar corporation. They’re not farmer Brown trying to scrape pennies off of his land so he can feed his family.
Any app that is a competing service to something Apple offers should be charged a 0% fee by Apple to operate BY LAW, otherwise it is anti-competitive.
Spotify, Netflix, Kindle, etc.
Competition is what made America great, and smart regulation HELPS that and consumers, not hurts it.
Cry me a river over Apple’s lost profits, corporatists.
Any app that is a competing service to something Apple offers should be charged a 0% fee by Apple to operate BY LAW, otherwise it is anti-competitive.
Spotify, Netflix, Kindle, etc.
Competition is what made America great, and smart regulation HELPS that and consumers, not hurts it.
Cry me a river over Apple’s lost profits, corporatists.
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So apply it to Uber, Lyft, Amazon Shopping, Air BnB, and all other apps that run on iOS too. Spotify's issue is that Apple is selectively applying the Apple Tax only to those services that are consumed on the iPhone, in other words, apps where Apple either is, or could be, a direct competitor. Look at Amazon for the perfect example. I can purchase any item through the shopping app including physical books, CDs and DVDs; however, as soon as I try to get a Kindle book (that competes with iBooks) or purchase a digital song (that competes with iTunes) or purchase digital movie (that also competes with iTunes), Apple shuts things down.
It certainly looks like Apple is abusing its platform to put competitors at a disadvantage.
I understand Apple's deserving some percentage of in-app sales for apps hosted on their platform -- but 30% seems pretty insane. 10%, I could see, but a full 30% seems like gouging.
On the Mac (and especially when dealing with indie developers) I will go out of my way to download the app from their own website and pay them directly -- but that's not possible in iOS.
On the Mac (and especially when dealing with indie developers) I will go out of my way to download the app from their own website and pay them directly -- but that's not possible in iOS.
Microsoft tried that logic. So did Google. Didn't work then, ain't going to work now.
After a year doesn’t Apple’s fee go down to 15%?
Spotify pays a yearly dev fee to apple. Do you know the meaning of free?
I've heard this before in the early years but I've yet to read any recent evidence to suggest this. Do you have sources that compares the two services and how much they pay artists?
This is why you have choice, Apple is not forcing you in any way to use an iPhone. Android has plenty of great options that allow you the freedom you desire. The iPhone is a more secure platform because of the restrictions that they have in place. Yeah, Apple charges a markup, because Apple hosts the bandwidth for the apps and handles the transactions and personal information, that’s not free. All retailers do this, companies can’t just sell things at Walmart without some kind of wholesale pricing or agreements. It’s how business works. Apple is not forcing Spotify to be on the iPhone and I would think that a 70% cut is worth not having iPhone users at all.
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