Apple's control over the App Store now 'completely unsustainable,' says Spotify CEO

Posted:
in iPhone
Spotify founder Daniel Ek once more criticized App Store policies on Thursday at the International Conference on Competition in Berlin, arguing that Apple has stacked the deck in its favor unfairly.

Spotify on iPhone


"It's fairly widely known that Steve Jobs initially wanted only Apple content on the App Store. But his reversal just a year later to invite outside partners in, increased consumer demand and altered the fate of the app market overall," Ek said according to Variety. Despite his wording, he was presumably referring to the original iPhone, for which Jobs did indeed favor first-party apps until he was convinced to launch the App Store in 2008.

"What initially felt like a mutually beneficial partnership, increasingly felt very one-sided. And it's now become completely unsustainable," Ek told the crowd.

On Wednesday, Sweden's Spotify launched a complaint with the European Commission, arguing that Apple takes more money than it should be entitled to, isn't providing information on customers to vendors, and is unfairly limiting third-party access to technologies such as Siri, the HomePod, and the Apple Watch.

Apple Music has an unfair advantage, Spotify said, in that it's not only integrated across Apple's platforms, but doesn't sacrifice the 15 to 30 percent of revenue that third-party services do by selling on the App Store. At one point Spotify did offer in-app subscriptions, but at a higher price than via the Web to compensate for lost revenue. It ultimately dropped the in-app option rather than maintain a discrepancy.

"As you are aware, Apple is both the owner of the iOS platform and its App Store and a competitor to services like Spotify. In theory, this is fine," Ek continued. "But in Apple's case, they continue to give themselves an unfair advantage at every turn -- setting themselves up to be both referee and player in the world of audio streaming. This deliberately hurts Apple's competitors, like Spotify, but even more importantly, it harms consumers.

"I believe we are approaching an important time in history where we have to make a choice: Do we want a few, select dominant platforms to have the power to strong arm others and tax the rest of the ecosystem, taking away the ability for smaller companies to effectively compete? Or...do we want a healthy ecosystem where real competition flourishes and where consumer choice wins?

"Let's call this 30 percent revenue-share exactly what it is - a competitor tax. Importantly, Apple's posture towards Spotify became increasingly hostile after Apple acquired a rival music streaming service and launched Apple Music. But until now, we felt like we didn't have much of a choice."

At the U.S. Supreme Court last year, Apple insisted that developers are "buying a package of services which include distribution and software and intellectual property and testing" when they pay its commission. Critics have pointed out though that Apple won't let creators publish anywhere but the App Store, and that it might be unfair to take money from outside content streams it doesn't produce or host.
«13

Comments

  • Reply 1 of 49

    Spotify has become completely unsuitable for me from the last 2 years of their changes. Including Microsoft trying to push me to their services.

    .
    jbdragonmagman1979tmayhammeroftruthbshankracerhomie3watto_cobra
  • Reply 2 of 49
    IvayloKIvayloK Posts: 1unconfirmed, member
    In this case let’s Spotifi build their Os, their devices, their ecosystem, their web store and charge all developers with 0% tax :-)

    Wish them good luck. 

    How rude is to just to say ooo they charge us 15%.... be man with balls and leave the platform!!!
    magman1979tmayAppleExposedrepressthishammeroftruthdewmemac_doggenovellebshankArloTimetraveler
  • Reply 3 of 49
    magman1979magman1979 Posts: 1,110member
    The level of whining weasel exhibited by this moron's diatribe is astounding...
    AppleExposedrepressthishammeroftruthdewmebshankmacplusplusn2itivguylolliverwatto_cobra
  • Reply 4 of 49
    What do the actual content creators think of Spotify and the compensation to musicians...?

    https://www.digitalmusicnews.com/2018/12/19/zoe-keating-spotify-2018-payout/

    Define 'sustainable'...?

    edited March 14 AppleExposedhammeroftruthbshankelijahgracerhomie3larryjwwatto_cobra
  • Reply 5 of 49
    It’s funny that he frames his argument by saying essentially, “they didn’t have to give us access to this platform at all, and for a while they didn’t, but now that they have and we all take this for granted, access should be on our terms, not theirs.”
    AppleExposedrepressthisdysamoriahammeroftruthdewmesmiffy31bshankbeowulfschmidtmagman1979n2itivguy
  • Reply 5 of 49
    AppleExposedAppleExposed Posts: 584unconfirmed, member
    Allow me to translate.

    "It's fairly widely known that Steve Jobs initially wanted only Apple content on the App Store. But his reversal just a year later to invite outside partners in, increased consumer demand and altered the fate of the app market overall," 

    "Steve was a meanie for building the App Store for us!"

    "What initially felt like a mutually beneficial partnership, increasingly felt very one-sided. And it's now become completely unsustainable," 

    "The App Store launched our company and felt fair but now I wanna do what I want. No fair!"

    "Let's call this 30 percent revenue-share exactly what it is - a competitor tax. Importantly, Apple's posture towards Spotify became increasingly hostile after Apple acquired a rival music streaming service and launched Apple Music. But until now, we felt like we didn't have much of a choice."

    "Apple are taxing us! Apple should give us their platform for FREE! Apple shouldn't be able to us their own platform it should be for me me me!"

    Interviewer asks: "What about the artists?"
    *Elk gallops away*
    edited March 14 bshankmagman1979n2itivguylolliverwatto_cobra
  • Reply 7 of 49
    GhostalGhostal Posts: 2unconfirmed, member

    I agree. Whether it be Amazon, Walmart, Microsoft or Apple, things get problematic when your company has created a marketplace / platform, but is also competing within that marketplace / platform. You can tweak the rules or and your positioning within the marketplace / platform in order to maintain a competitive advantage. This stifles innovation and it often results in crappier experiences for the customer. 


    bala1234
  • Reply 8 of 49
    jbdragonjbdragon Posts: 1,996member
    Spotify has become a cry baby!!!

    Spotify keeps throwing out this 30%.  The same 30% that Google and Amazon charge!!!  The simple fact is that it's Apple's App Store.  It costs money to run it for a number of reasons. By the way, every time Spotify updates their app, everyone downloading that app any number of times a year over and over again is costing Apple money!!!  Apple makes ZERO on all the free apps.  They also like to keep leaving out that after 1 year of service the costs drop from 30% to 15%.  Is that too much?  What is too much?

    By the way, they can do the exact same thing as Amazon did and not allow people to Subscribe or buy anything from In the app or from Apple.  users have to just sign up directly at your own web site.  Which then Apple gets ZERO percent!!!  Again another fact Spotify likes to leave out.

    Why are they crying now?  Because Apple Music is #1 in the U.S. even though they are close behind in the #2 spot.  Globally Spotify is #1 by a huge margin.  The problem is getting new subscribers to sign up.  It's starting to flatline.  People would want to pay are already paying.  They're starting to flatline.  After all these years they've been around, they've been losing money.  I don't think they've turned a profit yet.  As they get more users, they lose more money.  So every year they are losing more and more money.  They are a huge money pit.  They're trying to find new ways to get people to sign up.
    .
    Now they're trying to cut costs in other ways and one of them is Apple's monthly fee.   If only they didn't have to fork out 30%.  Zero would be month better for them.  An extra 30% more money coming in every month without having to do anything would be a big plus for them.  So now they're on this Apple Anti fee campaign.  They want their cake and eat it also..

    hammeroftruthboltsfan17bshankretrogustololliverwatto_cobra
  • Reply 9 of 49
    dysamoriadysamoria Posts: 1,958member
    Spotify doesn’t care much for paying artists a sustainable income...
    rotateleftbyteAppleExposedbshankmagman1979lolliverwatto_cobra
  • Reply 10 of 49
    So how is this situation that they are in Apple’s fault?  Aren’t there other services that require you to purchase subscriptions outside of the App Store like Hulu, Directv now, SiriusXM and others?

    from my memory the 30% was for hosting the app, taking care of the processing of the transactions, making sure they are secure, and depositing the money in the developers bank account. This was intended for ANYONE to do, not just big companies that demand big profits because they are publicly traded or sloppy at how they are ran. This method is what created a lot of millionaires, some of them are children. 

    So now this method is greedy because Spotify can’t come up with a system that has you sign up via the web and give them permission to contact you OUTSIDE of Apple’s App Store?
    Apple is not requiring you to make the subscription purchase inside the app is it? 

    It doesn’t make sense. 
    bshankmagman1979n2itivguylolliverwatto_cobra
  • Reply 11 of 49
    SpamSandwichSpamSandwich Posts: 30,748member
    Someone has been huffing the paint thinner.
    dewmebshankmagman1979n2itivguywatto_cobra
  • Reply 12 of 49
    Ghostal said:

    I agree. Whether it be Amazon, Walmart, Microsoft or Apple, things get problematic when your company has created a marketplace / platform, but is also competing within that marketplace / platform. You can tweak the rules or and your positioning within the marketplace / platform in order to maintain a competitive advantage. This stifles innovation and it often results in crappier experiences for the customer. 


    So how is that different than going to a store and seeing the store’s brand along with your brand of product? Plus it’s cheaper? Is that unfair??

    The only excuse you can use to stifle innovation is pure laziness. If not enough people buy your product over the house brand then you need to figure out why. If it’s price then you’re F*cked. That is what an open market does. 
    edited March 14 AppleExposedbshankgilly33lolliverwatto_cobra
  • Reply 13 of 49
    gatorguygatorguy Posts: 20,055member
    Ghostal said:

    I agree. Whether it be Amazon, Walmart, Microsoft or Apple, things get problematic when your company has created a marketplace / platform, but is also competing within that marketplace / platform. You can tweak the rules or and your positioning within the marketplace / platform in order to maintain a competitive advantage. This stifles innovation and it often results in crappier experiences for the customer. 


    So how is that different than going to a store and seeing the store’s brand along with your brand of product? Plus it’s cheaper? Is that unfair??

    The only excuse you can use to stifle innovation is pure laziness. If not enough people buy your product over the house brand then you need to figure out why. If it’s price then you’re F*cked. That is what an open market does. 
    Isn't Apple Music preinstalled? Kinda like having the store brand already in your shopping cart when you enter the store.

    Other techs have gotten in trouble with the EU as it's considered anti-competitive to favor your own products while putting others at a disadvantage. Maybe in Apple's case it will be OK, but I wouldn't place a bet on it yet unless the odds are worth the gamble that you'd lose.
    edited March 14 elijahgavon b7
  • Reply 14 of 49
    normmnormm Posts: 545member
    I think this is the same issue as net neutrality.  If you are a dominant platform on the internet, there should be rules about not favoring your own content.  I actually think it's short sighted of Apple to take such a large cut from major services that enhance their devices.  For example, not being able to buy Kindle books in the Kindle App just makes the iPhone that much less useful.  Perhaps a solution would be for Apple to tier its subscription revenue, so that when services grow large enough they take a much smaller cut.
    edited March 14
  • Reply 15 of 49
    dewmedewme Posts: 1,947member
    Oh, Danny boy, take your crybaby arguments over to Google and the Android platform and see how much special love they show you. Apple doesn’t need you or your Spotify. If you want to “punish” Apple for trying to run a legitimate business in a way that’s best for them and their vast array of stakeholders- send them a Dear Tim letter, pack up your toys, and leave them behind for greener and more Alphabetized pastures. Adios. Goodbye. 
    hammeroftruthAppleExposedlolliverwatto_cobra
  • Reply 16 of 49
    normm said:
    I think this is the same issue as net neutrality.  If you are a dominant platform on the internet, there should be rules about not favoring your own content.  I actually think it's short sighted of Apple to take such a large cut from major services that enhance their devices.  For example, not being able to buy Kindle books in the Kindle App just makes the iPhone that much less useful.  Perhaps a solution would be for Apple to tier its subscription revenue, so that when services grow large enough they take a much smaller cut.

    The thing is, Apple Music isn't favored. If you count it being installed on the device as being "favored" then the only solution is to not allow device manufacturers to pre-install apps on their devices. Is there favor from Apple not charging $12.99 for an Apple Music subscription? Then Spotify should reduce their costs so that they can offer a $9.99 price on iOS, which they already do through the web.
    watto_cobra
  • Reply 17 of 49
    gatorguy said:
    Ghostal said:

    I agree. Whether it be Amazon, Walmart, Microsoft or Apple, things get problematic when your company has created a marketplace / platform, but is also competing within that marketplace / platform. You can tweak the rules or and your positioning within the marketplace / platform in order to maintain a competitive advantage. This stifles innovation and it often results in crappier experiences for the customer. 


    So how is that different than going to a store and seeing the store’s brand along with your brand of product? Plus it’s cheaper? Is that unfair??

    The only excuse you can use to stifle innovation is pure laziness. If not enough people buy your product over the house brand then you need to figure out why. If it’s price then you’re F*cked. That is what an open market does. 
    Isn't Apple Music preinstalled? Kinda like having the store brand already in your shopping cart when you enter the store.

    Other techs have gotten in trouble with the EU as it's considered anti-competitive to favor your own products while putting others at a disadvantage. Maybe in Apple's case it will be OK, but I wouldn't place a bet on it yet unless the odds are worth the gamble that you'd lose.
    Apple Music isn’t just a subscription service though. It will let you add your already purchased or ripped music from iTunes. Plus you can delete the app if you don’t need it. 

    The comparison you make isn’t the same because Apple Music is free. It’s the same as iTunes being on your Mac. 
    You don’t have to use it and you can download Spotify if you want. 

    If a store decides to give away their product over yours, it’s completely legal, although you don’t see that happening very often, nor do you see a competing brand leaving the store over it.
    Sometimes the free store brand sucks and consumers would rather pay for something they know is better than get a free product.
    Kinda like how people buy an iPhone over an Android device. 

    It’s not like how Microsoft integrated IE into the OS so you can’t remove it. 
    edited March 14 lolliverwatto_cobra
  • Reply 18 of 49
    normm said:
    I think this is the same issue as net neutrality.  If you are a dominant platform on the internet, there should be rules about not favoring your own content.  I actually think it's short sighted of Apple to take such a large cut from major services that enhance their devices.  For example, not being able to buy Kindle books in the Kindle App just makes the iPhone that much less useful.  Perhaps a solution would be for Apple to tier its subscription revenue, so that when services grow large enough they take a much smaller cut.
    So going to the Amazon app is too
    much work for you?  😢
    watto_cobra
  • Reply 19 of 49
    I think the question of how big Apple‘s cut needs/should be is worth asking. Where the line between running a business in a profitable way and being greedy should be drawn.
  • Reply 20 of 49
    genovellegenovelle Posts: 861member
    Ghostal said:

    I agree. Whether it be Amazon, Walmart, Microsoft or Apple, things get problematic when your company has created a marketplace / platform, but is also competing within that marketplace / platform. You can tweak the rules or and your positioning within the marketplace / platform in order to maintain a competitive advantage. This stifles innovation and it often results in crappier experiences for the customer. 


    Innovation is creating your own. The web is wide open. They can make their service available online. Sign customers up an work via Safari.  They can also host a app for free on Apple’s platform. They want Apple to promote, process, and manage their subscriptions for free. To which Apple rightly gives them the middle finger. 
    hammeroftruthlolliverwatto_cobra
Sign In or Register to comment.