Spotify on Apple's Response to App Store Dispute: 'Every Monopolist Will Suggest They Have Done Nothing Wrong'

[Marshall73]

How would you feel Amazon starting to sell the same stuff as you, while still taking a 30% cut off your sales?
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Like Apple with the Modems right?

Did apple make modems? You probably meant routers/access points which wasn’t their ONLY product and they didn’t build the business on borrowed money with a business plan that can be derailed by giving away some one else’s product for free and having to pay out royalties to them.

 

[Ries]

The amount Spotify has to pay in royalties has no connection whatsoever to whether or not Apple gets a cut. And as Apple has pointed out in their response, the vast majority of Spotify users on iOS use the 'Free' version of the app that's advertising supported anyway. Apple makes zero dollars from that version.

Of course it does, the royalty rates are negotiated, not dictated.

 

[DNichter]

I am not seeing where Apple has done anything wrong in this situation. It seems that Spotify is just bitter because they have to pay Apple to profit from their platform.

 

[Ries]

Did apple make modems? You probably meant routers/access points which wasn’t their ONLY product and they didn’t build the business on borrowed money with a business plan that can be derailed by giving away some one else’s product for free and having to pay out royalties to them.

No modems, Qualcomm modems, those who they refuse to pay their royalty rates. The royalty rates they said yes to.

 

[Marshall73]

No modems, Qualcomm modems, those who they refuse to pay their royalty rates. The royalty rates they said yes to.

Oh right, the case Apple just won, because Qualcomm were double dipping.

 

[StellarVixen]

Except Apple is not on the business of a lot of apps, but it is competing with Spotify in the music streaming service.

So I would say their complaint is very valid.

It would be valid complaint if Apple created 30 percent tax just to hurt Spotify. But they didn't. 30 percent tax was there long before Spotify.

If you do not agree, then let users buy your subscription somewhere else.

 

[recoil80]

Microsoft didn't own the hardware, so monopolizing IE was in the wrong. You can't force a company to offer third party software on a device they own. It's why google home devices don't support Apple Music, but you can use Spotify. Is it illegal? no. The needs of the consumer will dictate market sales.

Microsoft case was different, I didn't mean to make a direct comparison, but my point was the EU fined Microsoft, while I don't remember the US doing the same thing.
What is illegal here may be perfectly legal elsewhere. A judge in a European country could decide Apple is acting against competition, who knows? I'm not saying they're going to win, but they have a case.

All I care about is having the ability to pay in app for every service I'm interested to. I don't care if Apple will be forced to lower its cut or if Netflix and Spotify will have to continue supporting IAP for their services. This bad user experience has to end, and to me the Solomon's solution is to strike a deal, give a discount to some of the competing companies and continue as is before a judge or a parliament act against Apple.

 

[az431]

It's time for us consumers to have a choice of downloading apps to our iPhones through other means beside the App Store. We already do and have been doing this for years on our Macs and Windows computers. It was great when the App Store was first introduced, but its been over 10 years and times are changing. Stop being greedy Apple!

Pass. That would require eliminating the vetting of apps for security, force people to deal with individual developers, and make it more difficult to find relevant apps, among other issue.

It would be better if everyone adopted Apple’s model, but I agree that Apple should give developers more leeway in marketing their apps.

 

[Marshall73]

Microsoft case was different, I didn't mean to make a direct comparison, but my point was the EU fined Microsoft, while I don't remember the US doing the same thing.
What is illegal here may be perfectly legal elsewhere. A judge in a European country could decide Apple is acting against competition, who knows? I'm not saying they're going to win, but they have a case.

All I care about is having the ability to pay in app for every service I'm interested to. I don't care if Apple will be forced to lower its cut or if Netflix and Spotify will have to continue supporting IAP for their services. This bad user experience has to end, and to me the Solomon's solution is to strike a deal, give a discount to some of the competing companies and continue as is before a judge or a parliament act against Apple.

iPhone, Xbox, PS4, Nintendo, Amazon, Google Play, all controlled platforms, you pay to put your apps on them. Apple will have the backing of all of these to prevent being strong armed by the BIGGEST player in streaming music.

 

[az431]

Microsoft case was different, I didn't mean to make a direct comparison, but my point was the EU fined Microsoft, while I don't remember the US doing the same thing.
What is illegal here may be perfectly legal elsewhere. A judge in a European country could decide Apple is acting against competition, who knows? I'm not saying they're going to win, but they have a case.

All I care about is having the ability to pay in app for every service I'm interested to. I don't care if Apple will be forced to lower its cut or if Netflix and Spotify will have to continue supporting IAP for their services. This bad user experience has to end, and to me the Solomon's solution is to strike a deal, give a discount to some of the competing companies and continue as is before a judge or a parliament act against Apple.

What bad user experience? Consumers are free to get the subscription from Spotify or from Apple. Spotify even communicates this in the welcome email. As far as I know, the app works exactly the same regardless of how you pay for the subscription.

 

[Crowbot]

Someone square this circle for me; when a retailer offers iTunes gift cards at a 15-20% discount, which is often the case in the US at least during many holidays, who is actually eating the discount? Is it Apple or is it the retailer? I have always assumed it’s a marketing promotion by Apple as retailers have such small margins already.
So in this case, if Apple were to cut subscription fees for services like Spotify to 10% or less, would Apple actually be losing money then? I have a feeling Apple wouldn’t allow gift card purchases for subscriptions much longer if that’s the case.

I don't know but it could be that they're using "the first one's free" model. I started with Pandora (free then paid) but found that after a while I was hearing the same tracks over and over. The 3 month freebie that Apple had from the start led me to try it snd stay. Apple also looks to the long term and can afford to be flexible on things like gift cards. All with an eye to keeping customers once they've run through the trial.

 

[noupf]

How would you feel Amazon starting to sell the same stuff as you, while still taking a 30% cut off your sales?
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Like Apple with the Modems right? Apple Music didn't exist when they started, something Apple copied off them, their whole business model.

Amazon is already re-branding products and selling them as their own....... so yea.

 

[az431]

Everything that Apple said is true.
But 30%? Are you kidding me, even 15%?
I would think services like this would expect 1-5%. Apple is greedy, pure and simple.

That “greedy” argument is nonsensical. You may want to look that word up in a dictionary before using it again in a sentence.

This is a free market and developers can choose whether to create iOS apps. Developers are well aware (as was Spotify) that when they choose to sell iOS apps they will need to pay Apple 30%. Anyone who doesn’t agree can offer their apps on other platforms.

Spotify’s argument is that the App Store is essential to their business, but the 30% is too much. If the App Store is so essential then the 30% is clearly not too much.

If anyone is “greedy” it’s Spotify, they are the ones who oppose paying just about everyone, including artists.

 

[mrex]

sometimes i real wish that app store owners pull bitchy apps from their platform - especially after comments like this.

your wish has already answered - many devs dont put their software to mac appstore because of stupid restrictions so that the software cannot function fully. no wonder mac appstore is dead.

 

[gnipgnop]

Of course it does, the royalty rates are negotiated, not dictated.

Not in the United States.

"Songwriters and publishers who generally felt they were short-changed by the initial streaming deals have been pushing for a better revenue share as the streaming market has evolved. That usually means negotiating hard whenever licensing deals come up for renewal, though in the US – because of the compulsory licence – it meant persuaded the Copyright Royalty Board to increase the rates. As they have now done."

https://completemusicupdate.com/art...ms-44-increase-in-streaming-royalty-on-songs/

 

[recoil80]

What bad user experience? Consumers are free to get the subscription from Spotify or from Apple. Spotify even communicates this in the welcome email. As far as I know, the app works exactly the same regardless of how you pay for the subscription.

I can't buy Spotify premium on my iPhone. Same for Netflix. Maybe in the US is still possible, I don't know. That's what I call bad user experience. Sure, not a big hassle, if I was interested in Spotify I could easily subscribe on their site but if feels like an unnecessary step...

 

[Mathriis]

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Spotify is a Swedish company, so it really is not that funny or weird.[/QUOTE]

Well, I wouldn’t any longer call Spotify a Swedish company. It is an international company that originates from Sweden.

 

[SoulCloud]

Spotify sees the writing on the wall. Apple is disrupting Spotify’s defacto monopoly on speakers by offering Apple Music built in.

Until recently, when someone purchased a connected speaker, Spotify was the only real choice even for iPhone users because Apple Music wasn’t offered. Apple Music is now spreading to these speakers so that people have a real choice and Spotify is scared.

Good point! Now the question is should those speaker manufacturers be able to change Apple 30 percent per customer, you know because it’s their speaker/platform?

 

[Heineken]

Nice reply by Apple.
I still think it’s a publicity stunt by Spotify to bring awareness using negative ‘advertising’ (which, I guess, is fair game in business)

I’m not sure why they need to:

- Just continuously make your service better and promote why it’s better.. Lots of people already use Spotify because they like it better than AM.

- they already have twice as much customers than Apple.

- the revenue to Apple is minuscule compared to their overall revenue. They get even more revenue from leveraging the customer bases of carriers ... and they get benefit of attracting a lot of ‘free’ subscribers that pay no revenue to Apple.

- if you want to make a complaint to the EU, sure go for it, but then following up by making statement to Variety and gripe on blog? What are they trying to achieve? Sympathy thru negative ad campaigning about how bad Apple is?

Maybe I’m wrong, but it sure appears like just a big gripe.

Confused.

The devil is in the details. Spotify has more subscribers but since when? Since 2008. Apple Music has half as many subscribers and was launched 3 years ago. People here can ride the keyboard all day long, but for Spotify, the writing is on the wall. Basically, every single company underestimates Apple and Apple plays the long game like a king.

 

[2010mini]

Everything that Apple said is true.
But 30%? Are you kidding me, even 15%?
I would think services like this would expect 1-5%. Apple is greedy, pure and simple.

Spotify does not pay 30% in fact they pay nothing to Apple.

 

[Ghost31]

Worst MGK vs. Eminem remake ever.

Apple is Eminem In this beef

 

[mnsportsgeek]

Apple is Eminem In this beef

Winning? Yes

 

[Feyl]

Apple is a monopolist? What about Google, Amazon..? They’re trying too hard in this and they will fail this ridiculous battle in the end.

 

[KennethS]

I really don’t empathize with Spotify on this complaint. Our Spotify subscription is paid directly to Spotify and Apple gets no cut, although the app for access to that subscription is on our iOS devices through the App Store. Same with our Netflix account. As a subscriber we choose to pay Spotify directly. I don’t feel any coercion by Apple to pay via the App Store nor do I need to and yet we still have the app on our Apple devices.

 

[recoil80]

Spotify does not pay 30% in fact they pay nothing to Apple.

I think they still offer IAP for old subscribers, like Netflix does, at least in Europe so for those people they still pay the 30 or 15% cut

But for new users Apple doesn't get a cent. So it would be even in their interest to have IAP for those people and get a smaller cut instead of nothing at all, that's why I think they'll strike a deal eventually.