Spotify, other music services allege Apple App Store policies anti-competitive

Posted:
in iPhone edited July 2015
Spotify and other streaming music services are upset with Apple's App Store policies, which they say effectively prevent them from competing with iTunes or Beats Music, a report claimed on Wednesday.




The issue, according to industry sources for The Verge, is the 30 percent cut Apple takes from all App Store purchases, including in-app transactions. In the case of Spotify, the company has to charge $13 a month for a Premium subscription bought through its iOS app to make the same amount of money it does from a $10 fee elsewhere. App Store rules further prevent apps from linking to external storefronts.

More importantly, Apple has been venturing deeper into the streaming world. The company now pulls in revenue from both iTunes Radio and Beats Music, while benefiting from reduced competition on its industry-standard mobile store. Apple is believed to be working on rebranding Beats Music for an on-demand service launching later this year.

"They control iOS to give themselves a price advantage," one of the sources said. "Thirty percent doesn't go to any artist, it doesn't go to us, it goes to Apple."

Similar arguments arose when the App Store first began allowing in-app subscriptions. At the time, however, complaints were mostly from magazines and newspapers. Some publications caved in order to reach the lucrative iPhone and iPad market, but many still prefer that people sign up for a subscription elsewhere and use a login to unlock content. Indeed, music and video services have generally adopted the same model for iOS.

Spotify is believed to be a primary target for Apple. Earlier this week, The Verge claimed that Apple wants record labels to pressure Spotify into dropping its free tier, giving the company an edge with its upcoming service. This and actions involving YouTube have reportedly led to a U.S. Department of Justice probe.

On Tuesday, Bloomberg said the Federal Trade Commission is also looking into Apple's streaming music negotiations. The chance of government intervention could nudge Apple into making changes to its new service before it even launches.
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Comments

  • Reply 1 of 106
    mubailimubaili Posts: 387member
    Well how lucky that Apple is not market share dominant in the smartphone market. No antitrust issue here.
  • Reply 2 of 106
    nasseraenasserae Posts: 3,153member
    Release web app instead and stop whining if you think the App Store offer no value to your business model.
  • Reply 3 of 106
    genovellegenovelle Posts: 890member
    It's not Apple's job to promote their servixe. If they do their own promotion and signup customers from
    Their own site then they would have to pay the 30 %. The would have to pay all the marketing and placements plus the credit card processing etc.
  • Reply 4 of 106

    These rules have been here forever. Everyone knows that's the cost of doing business in the iOS playground. Nobody is stopping them from creating a web app or going to Android. Apple created their ecosystem and market and now these companies think Apple should just let them play for free. Welcome to business 101.

  • Reply 5 of 106
    blazarblazar Posts: 270member
    Spotify is a leech, gonna have to agree with the artists on this one. i will and do pay for tons of CD's and converted any "pirated mp3's" i could replace with actual lossless files taken from cd's that I purchased.

    The piece of crap sound quality of youtube and spotify, etc. is not the experience I want. The spotify's of the world also have limited internation music tracks that are important to my family.
  • Reply 5 of 106
    mstonemstone Posts: 11,510member

    They could make the purchase button in their app say something like:

    "Pay $13 dollars here in the app or go to our website and pay only $10."

     

    Let the customer decide.

  • Reply 7 of 106
    blazarblazar Posts: 270member
    On a side note, apple needs to have lossless, drm free, inheritable lossless accounts. I am sick of getting cd's and burning the lossless files into my library.
  • Reply 8 of 106
    rp2011rp2011 Posts: 159member
    I love Apple products as much as anyone, but as Apple gets in the streaming game it is going to HAVE to change. These are serious anti-competitive issues that will not go away. We do not want to see happen to Spotify what happened to EVERYONE under Windows. If Apple doesn't address this, they should get their asses sued big time.

    Spotify has a great service, and if the only way Apple can compete with them is the Walmart or Microsoft way, where by nothing but sheer virtue of size, and keys to the store, then it makes competition impossible, and that's fucked up and always has been. That's why anti monopoly laws were created in the first place.
  • Reply 9 of 106
    redefilerredefiler Posts: 323member

    Oh please.  Spotify's payouts to artists are laughably infinitesimal, 0.007cents per play.  They are one of the main antagonists towards music artists with regard to revenue.  

     

    Regardless, they should all be paying the same royalty rate as terrestrial radio, cause its the same damn thing... a business broadcasting a song.  If anything the internet streaming rates should be higher, since their reach exceeds a radio stations broadcast's range.

     

    If a retooled Beats can forward even a tiny fraction of listeners to an iTunes Store purchase is a huge step in the right direction vs Spotify's virtual freeloading off artists work.

  • Reply 10 of 106
    lanfalllanfall Posts: 1member

    I created this account specifically to address redefiler.

     

    You clearly don't know how business works. Spotify does not pay the artist directly. Spotify pays the RECORD LABEL that owns the artists music and the RECORD LABEL pays the artists. 

     

    Do you walk into a store and pay the store plus all it's distributors/suppliers? No because that's now how business works. The same principle applies here. 

     

    Spotify isn't a free service, you still pay with your time while you listen to ad's the same as any radio station on the planet.

  • Reply 11 of 106
    SpamSandwichSpamSandwich Posts: 30,862member

    The real problem with Spotify and other streaming services (as recently pointed out by Jason Calacanis when he visited This Week in Tech) is that they are not making money now and will soon have to pay much, much higher licensing fees. Their original agreements contained low music licensing fees and those low rates will expire, essentially putting them into bankruptcy.

     

    There is absolutely NOTHING wrong with Apple's App Store policies. The problem is these streaming services are bad businesses and cannot make money!

  • Reply 12 of 106
    alcstarheelalcstarheel Posts: 554member
    Just like playing in ebay's playground means you have to pay seller fees so to do you have to pay Apple for making [I][B]your[/B][/I] money making ability slick and intuitive.

    The 30% rule is not only for streaming music apps so they need to take this upset-ness somewhere else. Like to Google Play.

    Oh wait..they charge 30% too https://support.google.com/googleplay/android-developer/answer/112622?hl=en
  • Reply 13 of 106
    SpamSandwichSpamSandwich Posts: 30,862member
    Quote:

    Originally Posted by rp2011 View Post



    I love Apple products as much as anyone, but as Apple gets in the streaming game it is going to HAVE to change. These are serious anti-competitive issues that will not go away. We do not want to see happen to Spotify what happened to EVERYONE under Windows. If Apple doesn't address this, they should get their asses sued big time.



    Spotify has a great service, and if the only way Apple can compete with them is the Walmart or Microsoft way, where by nothing but sheer virtue of size, and keys to the store, then it makes competition impossible, and that's fucked up and always has been. That's why anti monopoly laws were created in the first place.



    Oh, boy... Blocked.

  • Reply 14 of 106
    freerangefreerange Posts: 1,585member
    Hey Spotify and the rest of you, go FK yourselves. Why shouldn't you have to pay to access Apple's customer base! If you don't like it, don't put your apps in the Apple App Store and create your own valuable ecosystem! Does Walmart have to carry every product that knocks on their door? Or have to put your products on their shelves when asked?
  • Reply 15 of 106
    sully54sully54 Posts: 83member
    All I can say is don't bite the hand that feeds you.
  • Reply 16 of 106
    irnchrizirnchriz Posts: 1,581member
    The solution is simple, just don't offer in-app purchases.
  • Reply 17 of 106
    rogifanrogifan Posts: 10,669member
    I'm convinced now that Spotify is behind all of these investigations into Apple's upcoming music service. It's pretty simple for Spotify, just don't offer subscription service in app. People can easily go to Spotify.com and sign up there.
  • Reply 18 of 106
    lkrupplkrupp Posts: 6,818member

    Anyone else think Spotify sees the bullet headed for their head? I love how everybody tries to play that anti-competitive trump card when they feel threatened. 

  • Reply 19 of 106
    "They control iOS to give themselves a price advantage...".

    Ah, no.
    They control iOS because they created it.

    But a thought comes to mind, didn't Apple make a 15% agreement with HBO?
  • Reply 20 of 106
    lkrupplkrupp Posts: 6,818member
    Quote:

    Originally Posted by blazar View Post



    On a side note, apple needs to have lossless, drm free, inheritable lossless accounts. I am sick of getting cd's and burning the lossless files into my library.



    Yeah, you and that other guy.

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