I don't get it.. People here are tying to blame Apple for the pricing when it's not even them.. Apple demands a 30% cut of all sales... So Spotify who operates at $9.99 for a subscription says "Hey we don't want to lose any more money so lets add the $3 on top of the $9.99 making it $12.99 if you subscribe through the app store". So this way they take less of a hit.. HOW IS THIS APPLES FAULT???? Spotify sent a craftily written email and some of you gobble it up! They lose about $4 dollar per sign up through Apple out of the 12.99 so technically they lose about $1.00 of the $9.99.
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Spotify Encourages Customers to Cancel App Store Subscription, Resubscribe via Web to Save $3
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Because 30% of ongoing subscription service seems... well, unreasonable to a lot of people.
So companies with subscription services have two choices: Don't let your users have acecss to your service on i-devices, or give apple 30% of your revenues for that service in perpetuity.
The problem is, Apple, after the initial app distribution, isn't part of the equation. After your initial download, using a streaming service, Apple does nothing. They don't host content, They're not providing the bandwidth. They're not providing software support, They're not providing user support for that app. They don't provide support to the content creators. They are literally 100% hands off after that point.
Yet they still demand 30%.
With the way the numbers look, Spotify has to pay something like 70% pf their revenues to the music industry (content creators and agencies). leaving Spotify $2.99 of 'profit' (not pure profit, as there are likely more costs).
Well, if they sell on Apple's devices at 9.99. Apple takes that 2.99 (30%) as their fee.
Spotify is now no longer profitable to i-devices. The only choice they have now is cut out apple, or, raise their prices for Apple users.
Either choice sucks. But at least with the 2nd option, they aren't going to cut out millions of potential customers.
I think Apple should get paid for initial purchase. first sale only. And it should be much lower than 30%. But on subscription services where Apple is not involved at all, they should get 0.
Apple are allowing them into their Eco-system. What about takeaway apps, the app isn't selling the food, it's just showing a list of places near a customers location, it's not cooking the food either. However these apps command a few from sales via their servers.
How is this different to Apple? Apple are allowing direct access via iTunes which in the case of those who subscribe because they downloaded the app is far more convient.
Spotify never went out of their way to get customers not to subscribe via iTunes before Apple pay came along, so it's never been a big enough problem before to their finances. Spotify can't expect to start having a pop at Apple all of a sudden and still expect to be allowed to stay on the App Store.
How is this different to Apple? Apple are allowing direct access via iTunes which in the case of those who subscribe because they downloaded the app is far more convient.
Spotify never went out of their way to get customers not to subscribe via iTunes before Apple pay came along, so it's never been a big enough problem before to their finances. Spotify can't expect to start having a pop at Apple all of a sudden and still expect to be allowed to stay on the App Store.
So, I'm curious ... what's 30% of nothing? Because 30% of nothing sure sounds like the majority of devs are paying a whole lot. /sarcasm. Most apps are free, but 30% of the significantly smaller paid subscriptions users you claim isn't fair to carry the burden of the free editions. So, what's 30% of an Instagram app, 30% of a Facebook app, 30% of a Twitter app all of which since creation were probably downloaded in excess of a billion times? So, what's 30% of 20 million paid Spotify subscribers when there are 60 million total? Personally I think 30% is actually very fair when you consider the other side of the equation. Also, devs don't pay 30% to get rejected, they effectively paid nothing and got rejected. If a dev had an existing paid app whose update was rejected, that's their mistake for adding something that violates. Their previous contributions does not give them a free pass on their next one, lol.
Your arguments are moot.
Because first the customers aren't actually the developer's. The app store is fundamentally a partnership where Apple agrees to manage the users, transactions, distribution, support system, taxes, vat, etc. As an ecommerce developer I can assure you that even the transactions and VAT portions are a very big headache, when payment processing has no less than 20 different kinds of fees based on the type of card the customer uses (and are no where near as low as the rate Apple is charged per transaction what Apple gets so developers get each item processed at a discount), and the VAT obligation of selling in many different countries with different VAT rules and sizes ... those two items alone would prevent most developers from even being able to create a globally distributed app. There's a reason companies like Square take years before they are available internationally. Additionally, Square was so popular because the payment processing fees are a nightmare so their simplified single fee and ease of enabling merchant transactions was appealing because it was actually difficult otherwise. 30% is actually a bargain to reach a percentage of the world that most iOS developers would've never had access to otherwise. But the fact remains, it's still 30% of nothing in more than half of the cases ... so we're really looking at 30% of <50% (aka 15%), and even then it's a steal. The way Apple handles the situation is that the customers are technically Apple's so Apple must fulfill the VAT requirements themselves, and the developer is then paid by Apple. So, you think that developers should manage the customers etc, and forgo the VAT isolation / protection. Cool. While you're at it, you should probably recommend that everyone purely develop for Android, to enjoy that VAT nightmare and forgo the majority of paid users.
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Right almost 100%. Apple is however processing the payments even if it is not worth 30%. Spotify still had/s a choice on the matter and that is key. They could let people sign up outside of Apple exclusively via the web. Why did they not do that to begin with? So technically in my opinion that is their fault also Clearly it was never an issue to them till Apple Music because only now have they decided to take issue with this. So lets not try to put Spotify on any type of Pedestal. (not saying you are). this is simply about them losing subscribers now that Apple Music is here.
Apple by all right should charge 30% (i agree with for initial purchase of the app itself). Because you are putting app developers in front of a consumer base of MILLIONS.. the world at your door step... there is no other place to go than the app store. Its a one stop shop! And marketing/ advertising is not cheap anywhere as a small business owner I understand this wholeheartedly.. So if out of a million sales i could make 700k.. IM GOOD!
Thank You... 30% is cheap in my book.. Access to the world over in potential sales.. With none of the true headache!
I agree that after the initial download Apple should only take a lower cut. However, look at this... Apple has to go back and have people review updates to the app etc.. buy passing the app store when you are benefiting HUGELY from the paying people using the app store leaves a sour taste in my mouth. I agree that if Apple does nothing they shouldn't get a 30% cut. It should be lowered to closer align with being a CC processing fee.
Indeed, but the focus of "30% of revenue", loses sight of the entire story. I guess to simplify matters we can say: Spotify has 20 million paid subscribers, but 60 million total users. Since 30% is only in regard to the 20 million, their 60 million total means they effectively give Apple 10% to have acquired that many users (solely if all of Spotify's paid subscribers are Apple's, and purely go through the app store). The truth of the matter is Spotify is circumventing the App Store in many cases, and so they are actually giving Apple less than 10% of the benefit Apple gave them. And they are attempting to give even less, while using Apple and defaming them.
That's a straight up slap in the face they gave Apple. Apple needs to give them a swift kick to the rear. But, that would be anti-competitive / bullying . *sighs* People sleep on Tim Cook, but business stratagem unleashed he's like a Tasmanian devil that will devour them with a smile on his face. They need to slow their roll, or get beat. They really don't want Tim to get all 50 Shades of Grey on them.
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In fact, the Google Play store has pretty much the same terms as the Apple app store, including the 30% and the ban of links to external sign-up pages:
http://developer.android.com/google/play/billing/billing_subscriptions.html#payment
As mentioned before, I'm curious if Apple will offer in-app subscriptions in the Apple Music app for Android and pay the 30% to Google.
BTW, as far as I know iOS is the only platform where Spotify offers in-app subscriptions. They don't do this on any of the numerous other platforms they support (Android, Playstation, Roku, Sonos, smart TVs/Blu-ray players, in-car systems etc.) .
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As mentioned before, I'm curious if Apple will offer in-app subscriptions in the Apple Music app for Android and pay the 30% to Google.
That's amusingly ironic, and they should on principle. However, I'm not sure how that would work with the user's payment needing to be processed by iTunes. I doubt it's feasible without needing to incur a hefty development investment to make it possible (basically allowing Apple subscriptions to be paid by other processors), but on principle if it is possible to execute this with almost no expense ... then I think they should.
This doesn't make sense. Spotify has a much broader reach than just iOS. I bet only a small fraction of their premium users have signed up through the iOS app.
On the other hand, I'm pretty sure that many Spotify fans who spent a lot of time setting up playlists etc. would consider buying an Android instead of an iPhone if Spotify weren't available on iOS. Spotify is a hugely popular app, and so far none of the other contenders (including big ones like Google "All Access") have changed that. It remains to be seen how successful Apple Music will be in this crowded market.
I factored in your second sentence, twice in the portion that you quoted. And one of those times literally says that it was a simplification. It's merely a reflection to demonstrate that it's not 30% of the big picture, the 30% only covers a small portion of Spotify's picture and even merely considering Apple's portion Spotify is giving significantly less than 30%. That being said, to the latter part of your post ... I agree they might consider buying an Android, but I doubt many actually would buy it.
In regard to your statement about success. It's estimated that more than 38% of iOS users upgraded to 8.4. That equates to hundreds of millions of users who can access Apple Music. Let's say only 30% of them actually tried it, and only half of those that tried it liked it. That's still more than Spotify's paid subscribers, lol. And that's being conservative.
https://mixpanel.com/trends/#report/apple_music_release/from_date:-29,report_unit:day,to_date:-1
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Well, I don't actually expect that Apple will offer in-app subscriptions through Google Play (and Google doesn't in their iOS apps).
Generally I'm curious to see how Apple's first ever Android app will turn out. Most likely it will suck.
Well, I don't actually expect that Apple will offer in-app subscriptions through Google Play (and Google doesn't in their iOS apps).
Generally I'm curious to see how Apple's first ever Android app will turn out. Most likely it will suck.
You're probably right. And I wouldn't be surprised if Apple cripples it on purpose to offer incentive for others to switch to a more stable version (by time the Android version is out, the iOS version should be very stable). However, they could surprise us and release something more bulletproof than it is on iOS, for the sake of having sticky subscribers.
In fact, the Google Play store has pretty much the same terms as the Apple app store, including the 30% and the ban of links to external sign-up pages:
http://developer.android.com/google/play/billing/billing_subscriptions.html#payment
As mentioned before, I'm curious if Apple will offer in-app subscriptions in the Apple Music app for Android and pay the 30% to Google.
BTW, as far as I know iOS is the only platform where Spotify offers in-app subscriptions. They don't do this on any of the numerous other platforms they support (Android, Playstation, Roku, Sonos, smart TVs/Blu-ray players, in-car systems etc.) .
I meant, 30% of Google music subscription, since they're the provider of that. ther'es no 30% going to a 3rd party.
Google also, i believe allows 3rd party software to link to their websites for subscription based content allowing subscriptions to be purchased outside of google play world. Where Apple has banned the practice. you either let Apple do your payment processing, or expect the user to find your website on their own.
They probably only offer the in-app subscriptions for Apple iOS because they really don't have much choice. Without the ability to link to their own website for purchase, too many users would probably download the app and then get confused on where to purchase.
I think Apple will need to respond with a couple options, or risk alienating some of their subscriptiuon based services. Either back off and allow apps to link to purchase pages on the web, or reduce their expected fees. 30% is a lot of recurring money to be paying for, at that point, nothing but a payment processing company. Consider, that most of us bitch about credit cards charging retailers too much of a processing fee, when its roughly only 1%
The problem is, you're not putting your app in front of millions, because it gets lost in the App Store.
You're paying Apple to file your app in the middle of a haystack, hoping desperately that someone will find your needle.
So effectively, you're paying Apple to file your app at the bottom of the filing cupboard, where no-one will find it unless Apple deigns to feature your app on the front page one week. Is that worth 30%? No.
Your logic is broken. No one pays Apple 30% up front to be filed in the middle of a haystack. People only pay 30% for successful sales, if their app is being sold at all. So really, the developer is only paying 30% of their actual success, not 30% to stagnate. lol.
Buyt what if your fixed costs of your subscription services are 800k?
you're now losing 100k, despite your software actually pulling in 1million.
with 300,000 of that arbitrarily going to a company who really isn't doing much more than being a storefront?
no, in likelihood, you're going to raise your prices to a point where you make a profit, or at least stop losing money out of your pocket,
Thats what they're doing here. Because Apple takes 30%, they've raised their price. it just so happens, that they have a cheaper method of buying a subscription, you just need to go elsewhere to do it.
Sorry maybe I'm missing something here. So many have mentioned that a dev can't link to their own website within their app (true) and say therefore it is difficult for the average user to find the website to purchase the subscription at the lower non-Apple rate. I don't understand this at all. Just go to any app page in the App store, scroll down, and wonder of wonders, THERE IS THE LINK TO THE DEVELOPERS WEB SITE. Right there in Apple's own app!
What am I missing here? This is always the first place I go to find the link if I don't already know it.
What am I missing here? This is always the first place I go to find the link if I don't already know it.
Apple App store rules state that you are not allowed to tell people in the app store, or the app that they can go purchase something for the app elsewhere.
SO yes, their homepage is there. but until you've gotten into the app and realized "hey, I need to buy something to get full service", the App isn't allowed telling you "go to our website to subscribe"
True, but like many others like Netflix simply don't offer in-app purchases. The first thing a user will do us find your website to sign up.
its a risk that any developers have to take. does the companies have enough influence and knowledgable users to do so? or not?
just a standard business time decision.
That doesn't make sense I'm afraid. Yes I'm putting it in a haystack but it's still one place and one place only.. Take android google play store. If I want to search for an app on android there are many stores to go through aside from google Play .. If I want to do it on iOS there is only the Apple Store. So the apple market is contained to one location. Chances of my app being discovered are far better on the Apple Store for iPhone and so on than it is for android. Example Samsung even has there own store.. It goes on and on with them.
There are many apps that I have and came to the App Store to look for specifically that are never featured. If you are making an app it's for a specific cause and to market to specific people on the App Store that are in fact looking for that app.
And you pay only if your app is purchase so eccentially free marketing you only pay per purchase. That's good business in my book be used you have place that charge for advertising regardless if you make sales on not!
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That goes back to my original point. It is in fact Spotifiy who raised the price because apple is taking 30%. But if they knew that was a problem for them they should have had people sign up exclusively outside of the App Store. Left the app as a free download and customers first must subrcribe using a desktop. But they technically are more than a store front. If my app is used all over the world. Do you know how many hurdles I would have to go through if i were trying to sell on my own so to speak. Apple pretty much takes care of that.
I do agree with you that this would be the best, friendliest, and least ethical suspect method.