Spotify CEO on Apple and Google: 'If You Want to Be the Referee, You Can't Also Be the Player'

[maxoakland]

I think he's right and let's also talk about Spotify being the Referee and Player on their own app with the podcasts they own

 

[Sophisticatednut]

I can only speak for myself, but it matters to me as because I like not having to deal with all the pricing crap that companies do like discount codes, variable pricing, and selling my information.


And when they do, Apple will still require them to pay the same App Store fees minus the 3% payment processing fee like they do for Danish dating apps.

Despite your claims, the alternative payment method lawsuits are not about the 30%/15% fee, they're simply about opening competition to other payment processors.

Nope, the 15/30% fee is a payment fee and nothing else.
As EU have already stated Apple will be barred from extracting any fee whatsoever.

Nothing stops IAP from just using Apple Pay and giving Apple no cut outside what included in the 0.32€ Of the 10€ I pay to the company is the transaction/merchant fee and Apple will get a cut according to the deal they have with the banks.

 

[cocky jeremy]

It absolutely can be illegal to offer a better price than a rival when it's predatory pricing or dumping.

So, helping the consumer by giving them a better price is now illegal too? lol. Apple can't win, apparently.

 

[Sophisticatednut]

This is all the same old myopic nonsense littered with irrelevant pictures that make it hard to follow. You're just ignoring my arguments and repeating yourself.

How is it nonsense? The picture shows the price is the same.

Why can Amazon store sell goods for 1 billions € a year but only pay Apple 99€ a year for the privilege?

But the moment Amazon wants to sell 1 billions of € in music/ digital goods year 1 they must pay 300 million + 99€ ?

While in the steam app they sell 1 billion a year in digital games they only pay 99€ a year.

Farmvill earns 1billion a year in IAP they pay 300miilion to Apple +99€fee

What changed? What cost is Apple suddenly incurring along the way? Considering the cost is exactly the same in all instances

 

[BaldiMac]

Nope, the 15/30% fee is a payment fee and nothing else.
As EU have already stated Apple will be barred from extracting any fee whatsoever.

Source?

How is it nonsense? The picture shows the price is the same.

Why can Amazon store sell goods for 1 billions € a year but only pay Apple 99€ a year for the privilege?

But the moment Amazon wants to sell 1 billions of € in music/ digital goods year 1 they must pay 300 million + 99€ ?

While in the steam app they sell 1 billion a year in digital games they only pay 99€ a year.

Farmvill earns 1billion a year in IAP they pay 300miilion to Apple +99€fee

What changed? What cost is Apple suddenly incurring along the way? Considering the cost is exactly the same in all instances

Again, this is all nonsense. Choosing to charge for one thing and not something else is a perfectly normal business plan. And, of course, marginal costs are irrelevant to what you are allowed to charge for.

 

[webkit]

If you're going to pretend that a new bill to regulate competition in digital markets isn't new regulation, we've veered away from rational discussion.

First you ask a question ("Why do we need regulation to improve competition when strong competition already exists?") with NO mention of the word "more" and claim you meant more.

Now you start talking about "new regulation" instead of "more regulation." New regulation is not necessarily more regulation. If you still can't articulate what you mean, there is no reason to continue this discussion.

 

[webkit]

So, helping the consumer by giving them a better price is now illegal too? lol. Apple can't win, apparently.

Predatory pricing is not about helping consumers get a better price, it's about trying to drive competitors out of business so there is less choice and price competition in that market. Once achieved, the remaining company or companies can then charge even higher prices than they otherwise would have been able to when there was more competition.

For example, let's suppose there are three competitors in a particular market. Under existing conditions, one is offering their product for $100, another for $110 and another for $115. One of the companies (or a new company to the market) decides to engage in predatory pricing and starts charging $10 for their product which the others can't afford to match and end up going out of business. Once that happens, the remaining company then starts charging $175 because there is no longer any price competition.

Consumers can lose not only because of the higher price but also fewer choices.

 

[Abazigal]

Predatory pricing is not about helping consumers get a better price, it's about trying to drive competitors out of business so there is less choice and price competition in that market. Once achieved, the remaining company or companies can then charge even higher prices than they otherwise would have been able to when there was more competition.

For example, let's suppose there are three competitors in a particular market. Under existing conditions, one is offering their product for $100, another for $110 and another for $115. One of the companies (or a new company to the market) decides to engage in predatory pricing and starts charging $10 for their product which the others can't afford to match and end up going out of business. Once that happens, the remaining company then starts charging $175 because there is no longer any price competition.

Consumers can lose not only because of the higher price but also fewer choices.

How does that apply to Spotify? Based on feedback from other posters here, Spotify weaned their customer base off iTunes billing a long time ago, meaning nobody (at least, only a very small percentage) of iOS users are actually paying Apple that 15% cut.

In addition, it's not like Spotify serves only the Apple market. There's also android and windows users, and they outnumber iOS / Mac users many times over.

At the end of the day, it all comes down to music streaming simply not being a viable business model. Spotify is trying to put the blame on Apple and distract users from the fact that their own business model sucks and they never had a sustainable business plan to begin with. If Spotify does close down, it will not be because of Apple. They have had years before Apple Music to turn a profit. They didn't, and they probably never will, even if they get whatever concessions they want out of Apple.

 

[webkit]

How does that apply to Spotify?

It doesn't, unless Spotify starts offering its service for free or very low cost as a way to try to run other music streaming services out of business in order to be able to jack up prices later. Then it could apply to them, just as it could apply to other companies trying to do the same thing.

The topic of predatory pricing came from a broader discussion in this thread about what influences purchase habits and buying decisions which led to someone saying, "there's nothing illegal about offering a better price than a rival" to which I responded that it can be illegal if it's predatory pricing or dumping and that further led to the post you replied to.

 

[bgillander]

In researching the payments Spotify provides to the artists, it apparently works out to 70% to the rights holders and artists, with Spotify keeping 30%. Funny how that 30% keeps popping up. For some reason, it seems like it must be a good percentage when you get to charge it, but a bad percentage when you have to pay it.

 

[weckart]

Totally agree with most of this. Whilst I wouldn't say there is less talent in music around, I would say there seems to be a lot more generic artists producing similar music. Sadly streaming has reduced the amount of people who sit down and just listen to a album. Music now to a lot of people seems to just be background noise whilst their doing something else.

I still buy my music physically whether that be on CD or Vinyl, heck I'll buy on Cassette if that's the only option. If you have artists you really like the best way to support them is buying physical copies of there music or merch. A standard Vinyl release can cost from £20-£40 here in the UK. CD's tend to be around £11 at release. Either way you'll need to stream those albums a ridiculous number of times to get anywhere close to earning the artist the same amount of money as they get from the physical releases.

Unless the artists are releasing those under their own steam as Radiohead did with In Rainbows, you are more likely supporting the record company and assorted ten percenters rather than the artist. The whole focus of funding has shifted to touring with record releases treated more or less like advertising for the next tour.

 

[Expos of 1969]

In researching the payments Spotify provides to the artists, it apparently works out to 70% to the rights holders and artists, with Spotify keeping 30%. Funny how that 30% keeps popping up. For some reason, it seems like it must be a good percentage when you get to charge it, but a bad percentage when you have to pay it.

I don't believe Spotify chose to keep 30%. It is more that the rights holders forced Spotify to hand over 70%. Spotify would love to keep more than 30%.

 

[Michael Scrip]

Unless the artists are releasing those under their own steam as Radiohead did with In Rainbows, you are more likely supporting the record company and assorted ten percenters rather than the artist. The whole focus of funding has shifted to touring with record releases treated more or less like advertising for the next tour.

That's how it's always been, though.

Back when CDs were sold for $16... the artist maybe got $1... while the rest went to the record labels, managers, lawyers, distributors, etc.

The real money was made on tour. Some things never change...

 

[bgillander]

I don't believe Spotify chose to keep 30%. It is more that the rights holders forced Spotify to hand over 70%. Spotify would love to keep more than 30%.

So, you are saying that Spotify thinks 30% is too much when they have to pay it, but too little when they want to charge it? Weird. As the largest streaming service, I would think they would be giving 100% of the proceeds to the artists, based on their CEO’s talking points.

 

[bgillander]

If you charge $10/month for your music service, it is anticompetitive to take 30% of your competitors $10/month music service.

If you owned a store in a mall selling (price-controlled) Rolexes and the mall opened their own store next door to you selling the same Rolexes, you'd cry foul.

But the mall analogy still isn't as bad as the App Store... The mall does incur lost revenue (not leasing finite space to another tenant) with their own store where Apple does not. And you can at least move malls.

Didn’t Spotify build their own mall?

Car Thing discontinued - Spotify

carthing.spotify.com

 

[cocky jeremy]

Predatory pricing is not about helping consumers get a better price, it's about trying to drive competitors out of business so there is less choice and price competition in that market. Once achieved, the remaining company or companies can then charge even higher prices than they otherwise would have been able to when there was more competition.

For example, let's suppose there are three competitors in a particular market. Under existing conditions, one is offering their product for $100, another for $110 and another for $115. One of the companies (or a new company to the market) decides to engage in predatory pricing and starts charging $10 for their product which the others can't afford to match and end up going out of business. Once that happens, the remaining company then starts charging $175 because there is no longer any price competition.

Consumers can lose not only because of the higher price but also fewer choices.

If they start charging $175, something else will come along to drive prices down.

 

[webkit]

If they start charging $175, something else will come along to drive prices down.

There's no guarantee that can or will happen. If left uncontrolled or unregulated, the company that used predatory pricing the first time could do it again and there may not be any potential competitors willing or able to go to battle on price. Again, predatory pricing (and dumping) is illegal as it can harm competition and consumers.

 

[Sophisticatednut]

Source?

The DMA document:
Legislative act39,40,41,57,62)
Article 5 section ( 1, 3 to 8), Article 6 section (1,4,6-7,12)

I do recommend you actually read it.

Article 5-6 of the Digital Markets Act (DMA)
Article 5
Obligations for gatekeepers

• 1. The Gatekeeper shall comply with all obligations set out in this Article with respect to each of its core platform services listed in the designation decision pursuant to Article 3(9).
• 3. The gatekeeper shall not prevent business users from offering the same products or services to end users through third-party online intermediation services or through their own direct online sales channel at prices or conditions that are different from those offered through the online intermediation services of the gatekeeper.
• 4. The gatekeeper shall allow business users, free of charge, to communicate and promote offers, including underdifferent conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper.
• 5. The gatekeeper shall allow end users to access and use, through its core platform services, content, subscriptions, features or other items, by using the software application of a business user, including where those end users acquired such items from the relevant business user without using the core platform services of the gatekeeper.
• 6. The gatekeeper shall not directly or indirectly prevent or restrict business users or end users from raising any issue of non-compliance with the relevant Union or national law by the gatekeeper with any relevant public authority, including national courts, related to any practice of the gatekeeper. This is without prejudice to the right of business users and gatekeepers to lay down in their agreements the terms of use of lawful complaints-handling mechanisms.
• 7. The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper’s core platform services.
• 8. The gatekeeper shall not require business users or end users to subscribe to, or register with, any further core platform services listed in the designation decision pursuant to Article 3(9) or which meet the thresholds in Article 3(2), point (b), as a condition for being able to use, access, sign up for or registering with any of that gatekeeper’s core platform services listed pursuant to that Article.

Artikel 6

• 1. The Gatekeeper shall comply with all obligations set out in this Article with respect to each of its core platform services listed in the designation decision pursuant to Article 3(9).
• 4. The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications or software application stores using, or interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core platform services of that gatekeeper. The gatekeeper shall, where applicable, not prevent the downloaded third-party software applications or software application stores from prompting end users to decide whether they want to set that downloaded software application or software application store as their default. The gatekeeper shall technically enable end users who decide to set that downloaded software application or software application store as their default to carry out that change easily.
• 6. The gatekeeper shall not restrict technically or otherwise the ability of end users to switch between, and subscribe to, different software applications and services that are accessed using the core platform services of the gatekeeper, including as regards the choice of Internet access services for end users.
• 7. The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper. Furthermore, the gatekeeper shall allow business users and alternative providers of services provided together with, or in support of, core platform services, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features, regardless of whether those features are part of the operating system, as are available to, or used by, that gatekeeper when providing such services.

This means that Apple, as a gatekeeper operating the App Store on iOS, cannot require business users to use or interoperate with any other Apple core platform services (such as Apple Pay or Apple Music) as a condition for accessing, signing up, or using their own core platform services within the App Store ecosystem .

Again, this is all nonsense. Choosing to charge for one thing and not something else is a perfectly normal business plan. And, of course, marginal costs are irrelevant to what you are allowed to charge for.

Except this is to show that Apple doesn’t provide any services of value that would warrant a fee higher that the standard transaction fees that payment processing services charge. And that Apple is just a glorified payment processor

(Legislative acts)

• (39) In certain cases, for instance through the imposition of contractual terms and conditions, gatekeepers can restrict the ability of business users of their online intermediation services to offer products or services to end users under more favourable conditions, including price, through other online intermediation services or through direct online sales channels. Where such restrictions relate to third-party online intermediation services, they limit inter-platform contestability, which in turn limits choice of alternative online intermediation services for end users. Where such restrictions relate to direct online sales channels, they unfairly limit the freedom of business users to use such channels. To ensure that business users of online intermediation services of gatekeepers can freely choose alternative online intermediation services or direct online sales channels and differentiate the conditions under which they offer their products or services to end users, it should not be accepted that gatekeepers limit business users from choosing to differentiate commercial conditions, including price. Such a restriction should apply to any measure with equivalent effect, such as increased commission rates or de-listing of the offers of business users.​
• (40) To prevent further reinforcing their dependence on the core platform services of gatekeepers, and in order to promote multi-homing, the business users of those gatekeepers should be free to promote and choose the distribution channel that they consider most appropriate for the purpose of interacting with any end users that those business users have already acquired through core platform services provided by the gatekeeper or through other channels. This should apply to the promotion of offers, including through a software application of the business user, and any form of communication and conclusion of contracts between business users and end users. An acquired end user is an end user who has already entered into a commercial relationship with the business user and, where applicable, the gatekeeper has been directly or indirectly remunerated by the business user for facilitating the initial acquisition of the end user by the business user. Such commercial relationships can be on either a paid or a free basis, such as free trials or free service tiers, and can have been entered into either on the core platform service of the gatekeeper or through any other channel. Conversely, end users should also be free to choose offers of such business users and to enter into contracts with them either through core platform services of the gatekeeper, if applicable, or from a direct distribution channel of the business user or another indirect channel that such business user uses.​
• (41) The ability of end users to acquire content, subscriptions, features or other items outside the core platform services of the gatekeeper should not be undermined or restricted. In particular, a situation should be avoided whereby gatekeepers restrict end users from access to, and use of, such services via a software application running on their core platform service. For example, subscribers to online content purchased outside a software application, software application store or virtual assistant should not be prevented from accessing such online content on a software application on the core platform service of the gatekeeper simply because it was purchased outside such software application, software application store or virtual assistant.​
• 57) If dual roles are used in a manner that prevents alternative service and hardware providers from having access under equal conditions to the same operating system, hardware or software features that are available or used by the gatekeeper in the provision of its own complementary or supporting services or hardware, this could significantly undermine innovation by such alternative providers, as well as choice for end users. The gatekeepers should, therefore, be required to ensure, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features that are available or used in the provision of its own complementary and supporting services and hardware. Such access can equally be required by software applications related to the relevant services provided together with, or in support of, the core platform service in order to effectively develop and provide functionalities interoperable with those provided by gatekeepers.
  The aim of the obligations is to allow competing third parties to interconnect through interfaces or similar
  solutions to the respective features as effectively as the gatekeeper’s own services or hardware​
• 62) For software application stores, online search engines and online social networking services listed in the designation decision, gatekeepers should publish and apply general conditions of access that should be fair, reasonable and non- discriminatory. Those general conditions should provide for a Union based alternative dispute settlement mechanism that is easily accessible, impartial, independent and free of charge for the business user, without prejudice to the business user’s own cost and proportionate measures aimed at preventing the abuse of the dispute settlement mechanism by business users. The dispute settlement mechanism should be without prejudice to the right of business users to seek redress before judicial authorities in accordance with Union and national law. In particular, gatekeepers which provide access to software application stores are an important gateway for business users that seek to reach end users. In view of the imbalance in bargaining power between those gatekeepers and
  business users of their software application stores, those gatekeepers should not be allowed to impose general conditions, including pricing conditions, that would be unfair or lead to unjustified differentiation.
  Pricing or other general access conditions should be considered unfair if they lead to an imbalance of rights and obligations imposed on business users or confer an advantage on the gatekeeper which is disproportionate to the service provided by the gatekeeper to business users or lead to a disadvantage for business users in providing the
  same or similar services as the gatekeeper. The following benchmarks can serve as a yardstick to determine the fairness of general access conditions: prices charged or conditions imposed for the same or similar services by other providers of software application stores; prices charged or conditions imposed by the provider of the software
  application store for different related or similar services or to different types of end users; prices charged or conditions imposed by the provider of the software application store for the same service in different geographic regions; prices charged or conditions imposed by the provider of the software application store for the same service the gatekeeper provides to itself. This obligation should not establish an access right and it should be without prejudice to the ability of providers of software application stores, online search engines and online social networking services to take the required responsibility in the fight against illegal and unwanted content as set out in
  a Regulation on a single market for digital services.​

​

 

[Sophisticatednut]

Didn’t Spotify build their own mall?

Car Thing discontinued - Spotify

carthing.spotify.com

It’s not a mall if only one is allowed access. Or would you call a shoe store a mall?

 

[BaldiMac]

The DMA document:
Legislative act39,40,41,57,62)
Article 5 section ( 1, 3 to 8), Article 6 section (1,4,6-7,12)

I do recommend you actually read it.

Shockingly, not a single thing you highlighted in all that text supports your claim or precludes them from charging platform fees.

Except this is to show that Apple doesn’t provide any services of value that would warrant a fee higher that the standard transaction fees that payment processing services charge. And that Apple is just a glorified payment processor

Again, this is nothing but nonsense. Any reasonable person would consider the work Apple does to support and maintain the iOS platform to be of value to developers.

 

[Mrkevinfinnerty]

Again, this is nothing but nonsense. Any reasonable person would consider the work Apple does to support and maintain the iOS platform to be of value to developers.

They get paid handsomely for it when they sell the hardware. They also charge an annual fee for dev registration

 

[BaldiMac]

They get paid handsomely for it when they sell the hardware. They also charge an annual fee for dev registration

I don't think either of those facts is relevant to my point.

 

[Sophisticatednut]

Shockingly, not a single thing you highlighted in all that text supports your claim or precludes them from charging platform fees.


Again, this is nothing but nonsense. Any reasonable person would consider the work Apple does to support and maintain the iOS platform to be of value to developers.

the hughlighted text was just emphasice. How did you miss the free of charge? or the prevention of preventing the conclusion of buisness contracts free of charge outside their platform?


7. The gatekeeper shall allow providers of services and providers of hardware, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same hardware and software features accessed or controlled via the operating system or virtual assistant listed in the designation decision pursuant to Article 3(9) as are available to services or hardware provided by the gatekeeper. Furthermore, the gatekeeper shall allow business users and alternative providers of services provided together with, or in support of, core platform services, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features, regardless of whether those features are part of the operating system, as are available to, or used by, that gatekeeper when providing such services.

4. The gatekeeper shall allow business users, free of charge, to communicate and promote offers, including underdifferent conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper.

 

[Mrkevinfinnerty]

I don't think either of those facts is relevant to my point.

Yes they are. There is simply no need for Apple to gouge their excessive fees. The developers create an enormous amount of value for Apple.

 

[BaldiMac]

the hughlighted text was just emphasice. How did you miss

How did I miss what in your wall of pictures and highlighting and mis-used quote blocks?