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

[krell100]

If Spotify can't run a profitable business then they obviously have a flawed business model.

They give the artist way less than Apple Music and don't offer lossless or hi-rez, so their service is worth less.

"Tidal pays the most per stream at $0.013, followed by Apple Music at $0.01 per stream. Spotify, on the other hand, pays out $0.0033 per stream — dramatically lower than both Apple Music and Tidal, as well as Amazon Music, YouTube Music, and Deezer. The only company that pays lower rates than Spotify is Pandora."

 

[ikramerica]

No, everyone not agreeing with the cut are just bad at business. They won’t be happy until Apple is not taking any cut at all because they’re unable to make a profit from a 70% cut. Meanwhile, hundreds of thousands of developers that are GOOD at business are making a significant amount of money.

Well from Apple’s perspective being a player is problematic.

1. If I charge $3 more than spotify to make it fair, my business suffers, nobody subscribes and I make close to $3 per subscriber.

2. If I charge the same, then some will use mine and some will use theirs and I make about $6 per subscriber and spotify complain about the fee.

3. If I charge even 10% less than spotify at $9, I still will end up making between maybe $7 but be called a predator.

Which means there is no way to win when you own the marketplace and also sell your own product in a monopoly.

But iOS isn’t a monopoly. Android also offers spotify. So another choice for customers is to not buy iOS at all.

So Apple will claim that there is a 20-30% fee to be featured on a popular platform but nobody is forcing you to subscribe through Apple’s payment system or buy an iPhone at all. In fact, you can get an otherwise better phone than entry level iphones for 1/2 the price on Android.

 

[squirrellydw]

Has stupid Spotify paid the artist the money they owe them yet? Only reason the EU cares is because Apple isn't an EU company, they go after every other company but their own. I wish companies would grow some balls and just stop selling their products in the EU. Then the EU can use the China crap and have it spy on everything and beg for the companies to come back.

 

[McScooby]

I actually agree with the idea here, even if the execution of that idea doesn't necessarily make a lot of sense.

Apple Music should be an independent subsidiary of Apple that pays 30% in fees just like Spotify does. The team that moderates the App Store should be completely firewalled from Apple Music.

In an ideal world, the review team shouldn't even be allowed to know who owns the app and what the name of the app being reviewed is.

Ultimately, that does add some "red tape and bureaucracy", yes it does. But it would also go a long way to show their partners that publish on the app store, that they will be treated fairly and to the same standard Apple treats themselves.

IMHO this would also demonstrate that Apple's (app store review team) is acting on behalf of Apple's customers first and foremost. Again, I am a strong believe that Apple should uphold themselves to the same standards they're upholding third parties to. An OS or store that "gives first-party apps special treatment" is also ripe for abuse and/or hacks/exploits.

Idiotic comparison. Are you saying apple don't pay for processing? Sure they do, it's just absorbed into other aspects of their business in the same way that if Spotify diversified their business they could do the same, pooling & sharing.

People obviously don't have a great memory, do you remember what it was like before the App Store & Apple Music rolled into town, it was like the friggin' wild west with multiple App Stores offering crap deals tied to one, yes one handset which would lose support after a year, if that.

I'm no Apple apologist, but you have to remember these things.

& iirc Apple do & did pay for Music, they've got $3Bn reasons to not to drop the 30% commission rate.

Prior to the stores opening you had hosting, payments, advertising lots of overheads to account for, obscene pricing & that's what gives you the 30% not just simply for taking a payment and as others have said, there's nothing stopping Spotify from keeping bypassing Apple's payment & offering it ala Netflix on their end, cutting apple out altogether & not giving folk the option to pay via Apple.

Transforming iTunes to Music, meant buying Beats & their corresponding music service, there was nowt stopping Spotify from following the same path.

Sure Apple got the headphone sales that made it a no-brainer, but it was the talent in Dre & Iovine that came with it that really made it a goer, Apple took the gamble & it paid off.

It's a turkeys voting for xmas mentality wishing for this, because if it ever happened who do you think would pay for it?

Apple? I don't think so, see Apple silicon for reference.

If Spotify want to get serious, lets see them develop their platform for everything out there, I'm talking HomePods etc. the works, but to sit back and continually moan their crap business model is someone else's fault, nah they can do one.

Their mp3 service is crap & that's the real thing being overlooked.

 

[v3rlon]

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.

If you have a better price, take the price stand.
If you have a better product, take the quality stand.
If you don't have either of those, take the witness stand.

If they put more effort into offering more instead of legislating and suing more, we would all be better off.

 

[Minato1990]

Spotify needs to stop ****ing crying
CEO is a big baby.

 

[Mrkevinfinnerty]

This has really got people choking on their Kool Aid. Super

 

[dekadent]

If Spotify can't run a profitable business then they obviously have a flawed business model.

They give the artist way less than Apple Music and don't offer lossless or hi-rez, so their service is worth less.

"Tidal pays the most per stream at $0.013, followed by Apple Music at $0.01 per stream. Spotify, on the other hand, pays out $0.0033 per stream — dramatically lower than both Apple Music and Tidal, as well as Amazon Music, YouTube Music, and Deezer. The only company that pays lower rates than Spotify is Pandora."

So, if Apple Music was a stand alone company, not backed by or financially sponsored by the rest of the trillion dollar Apple Inc, it would be a profitable company relying solely on their subscriber fees while also paying out the most money per stream. And pigs can fly.

 

[Boeingfan]

It helps them because we all know Apple won't do that, they will comply with whatever regulation is meted out to them.

Apple has had years of beating the competition over the head with their arbitrary rules and now they are finding out how that goes.

Again, the argument that you can walk into someone's house and expect a free ride is unreasonable. By formally forcing the house owner to provide services for free surely that's anti competitive and must be UK or EU funded, the money has to come from somewhere, otherwise the govt's are stifling competition with no funds to put where their mouth is.

 

[Mrkevinfinnerty]

Again, the argument that you can walk into someone's house and expect a free ride is unreasonable. By formally forcing the house owner to provide services for free surely that's anti competitive and must be UK or EU funded, the money has to come from somewhere, otherwise the govt's are stifling competition with no funds to put where their mouth is.

Yes it does. Apple makes a fortune selling hardware to people. People buy the hardware so they can use their favorite apps.

 

[trip1ex]

They definitely need to figure out how to keep digital platforms competitive given they tend to be winner take all.

I thought about pharma drugs/drug companies and how the patents expire 20 years after invention(roughly 10 years after they come to market.) Maybe a similar mentality can be applied to digital platforms.

 

[dekadent]

Has stupid Spotify paid the artist the money they owe them yet? Only reason the EU cares is because Apple isn't an EU company, they go after every other company but their own. I wish companies would grow some balls and just stop selling their products in the EU. Then the EU can use the China crap and have it spy on everything and beg for the companies to come back.

Yes please, why don’t Apple pull out of the EU entirely and remove all EU developed apps from the App Store. Let me know in 24 months time if you want some advice on which China phone you are going to replace you stagnant iPhone with.

 

[JamesHolden]

They created it so they can charge what they want. Also what bugs me is why does no raise these issues with Amazon who have destroyed multiple industries

I agree they can charge what they want. Doesn’t mean it isn’t greedy. My comment stands. If these companies had charged a far more reasonable and fair 10%-ish, there wouldn’t be the outrage.

I also think Ek makes a very fair point about the referee not being a player. Apple looks and feels a lot like 90s Microsoft these days in so many ways.

 

[drumcat]

I really think a lot of this would go away if they just lowered their cut. It really is ridiculous that they think 30% is an acceptable margin for the service apple provides. It's practically free money to them. And when the EU forces side loading, it's going to cause a headache for all of us when many major players bail from the App Store in order to get a larger cut.

So 30% is too much?

What happens when 15% is too much?

Or 5%?

Why not say they're generous for not taking 50/50?

This is all carnival nonsense. All these analogies… "they're competing with you" - yes. They are. If you don't like it, make it a PWA and call it a day. No one says you have the right to a store, and no obligation to pay for the infrastructure. If that didn't exist, you have no store.

 

[mitchferrino]

Spotify doesn’t have clean hands here, but they’re right. The same needs to happen to Amazon. If Amazon and Apple App Store stopped competing with their market - it would change the lives of thousands of small business owners and developers.

 

[drumcat]

I agree they can charge what they want. Doesn’t mean it isn’t greedy. My comment stands. If these companies had charged a far more reasonable and fair 10%-ish, there wouldn’t be the outrage.

I also think Ek makes a very fair point about the referee not being a player. Apple looks and feels a lot like 90s Microsoft these days in so many ways.

Absolutely not. Apple isn't making anyone "second class" the way Microsoft did.

 

[Kkspire]

I really think a lot of this would go away if they just lowered their cut. It really is ridiculous that they think 30% is an acceptable margin for the service apple provides. It's practically free money to them. And when the EU forces side loading, it's going to cause a headache for all of us when many major players bail from the App Store in order to get a larger cut.

That’s like saying renting out your department store to tenants should be free because you offer your products in the store. No, sorry. Life doesn’t work that way. You don’t live in other peoples stuff for free and take money. And if you did, it would be the worst place ever and you wouldn’t go lol.

 

[zach-coleman]

That’s like saying renting out your department store to tenants should be free because you offer your products in the store. No, sorry. Life doesn’t work that way. You don’t live in other peoples stuff for free and take money. And if you did, it would be the worst place ever and you wouldn’t go lol.

You can't refuse and go to another "department store" like in this analogy. There are only two app stores and they collude with each other to keep their cut high. Any city has loads of retail space.

 

[WilliApple]

I am so confused with why Spotify wants to encourage competition when they have most of the music market...

 

[callmefil]

If the App Store isn’t your creation, create your own and make your own rules.

 

[J InTech82]

I really think a lot of this would go away if they just lowered their cut. It really is ridiculous that they think 30% is an acceptable margin for the service apple provides. It's practically free money to them. And when the EU forces side loading, it's going to cause a headache for all of us when many major players bail from the App Store in order to get a larger cut.

Last time I checked, Apple is not a nonprofit business.

Since when is a company not allowed to come out with a product, and/or service and price it at their own choosing? Not to mention, cover said costs to produce said product? People seem to think that running the backend of the App Store or even Apple Music costs Apple nothing when I am sure it cost them a fortune!

 

[WRX-SRQ]

I'm fairly certain that had Apple not made the iPhone and the App Store, you'd have NO market. You're literally using Apple's iPhone platform and their distribution network (App Store) to get your service into their customers hands. So because Apple has a competing app, you want to cry foul? Sorry, I don't feel for you at all.

 

[DocMultimedia]

Everyone above me is evil. And when I'm at the top I'm good. Basics. Spotify not at the top right now. Attacks will continue. Lather, rinse, repeat.

 

[Boeingfan]

Yes it does. Apple makes a fortune selling hardware to people. People buy the hardware so they can use their favorite apps.

Apple don’t just make hardware, they make the software and hardware, unlike Android. and herein is the benefit of the marriage of For those looking to do whatever they want with their device get Android; for those who enjoy the premium handset and in-house software, consider Apple. You don’t build a fortress and then give any Tom dick or harry the front door key, and quite frankly I don’t believe they should be expected too. This would have made all those fortresses and castles around Europe redundant as soon as they were built back in the day. But no, you were only allowed in if you were granted entry. The same fundamental applies; if someone doesn’t like the apple castle then they can buy a cheap and cheerful android. They are open to all developers and viruses and anyone can go to town.

 

[icanhazmac]

How about Spotify, Apple, and Google pay the artist more? Let's start there, enough with these F'n board members, PAY THE ARTIST!!!

I have 2 questions for you:

1) How much, exactly, should an artist get paid per stream of a song?

2) Please tell me exactly what you would be willing to pay per stream, no subscription, just a la carte.

Apple Music Reveals How Much It Pays Artists Per Stream

How much do artists make while you rock out to their songs? Apple revealed the answer.

www.makeuseof.com

From the services standpoint: Assuming the above article is correct, copyright holders get .01 per stream. If Apple charges 10.99/mo a user can stream 1099 songs a month for a break even on your subscription. Apple of course is losing money on that because they handle all the backend and the service. If you listen to Apple Music all your waking hours, 16 hours times 60 is 960 potential listening minutes in a day and lets say the average song is 3.5 minutes... 960/3.5 is 274 songs a day. Your monthly "allotment" based on the sub cost would be used up in approximately 4 days. Or if you just take 1099 songs a month divided by 30 days your "allotment" is 36.6 songs a day.

From the artists standpoint: They could sell a song for 1.29 (current cost of Today's Hits on iTunes store). By the time profits from that amount hit the artist... I'm gonna spitball it at .30, I have no idea but it seems reasonable by the time everyone gets their cut. Remember, Apple, Spotify, etc are not responsible for the ills of the music industry.

OR

They can hope that everyone just "rents" music forever. I think the artist wins in the streaming scenario, even at Spotify compensation.

So back to my first question. Based on the subscription costs and how that pays out, how much should an artist get for a single stream? More importantly, are you willing to pay a higher subscription cost to accommodate that? Even if you are willing to pay it, will the average user pay it?

It's easy to say "pay XXX person more" but that money comes from somewhere.