Spotify says Apple's App Store changes omit 'price flexibility,' customer data
Apple's planned changes to the App Store still don't address some fundamental problems, a Spotify executive said on Thursday, hinting that the music service's in-app subscription fees are likely to remain unchanged.
The App Store's upcoming changes will still prevent "price flexibility," Spotify's head of corporate communications and global policy -- Jonathan Prince -- told The Verge. That means that the company can't provide conditional sales or discounts, something it's known for elsewhere.
Spotify normally charges $9.99 per month for Premium access, sometimes offering discounts like a three-month trial for 99 cents. People subscribing through the iOS app have to pay $12.99 per month, meant to compensate for Apple's standard 30 percent cut of all in-app purchases, even subscriptions. Spotify has encouraged customers to subscribe through other platforms first, then sign into the iOS app.
Prince also raised concerns about the lack of data Apple provides about customers, a long-standing complaint from many subscription services, particularly magazines and newspapers dependent on advertising.
"Apple still insists on inserting itself between developers and their customers, which means developers will continue to lack visibility into why customers churn -- or who even qualifies as a long-term subscriber," he explained.
Starting June 13, Apple will be halving its cut to 15 percent for app subscribers who maintain their service for a year, with a 60-day grace period during which customers can cancel and resubscribe. Beginning in the fall, the company will also let services charge a higher rate for new subscribers while keeping prices lower for existing customers.
The App Store's upcoming changes will still prevent "price flexibility," Spotify's head of corporate communications and global policy -- Jonathan Prince -- told The Verge. That means that the company can't provide conditional sales or discounts, something it's known for elsewhere.
Spotify normally charges $9.99 per month for Premium access, sometimes offering discounts like a three-month trial for 99 cents. People subscribing through the iOS app have to pay $12.99 per month, meant to compensate for Apple's standard 30 percent cut of all in-app purchases, even subscriptions. Spotify has encouraged customers to subscribe through other platforms first, then sign into the iOS app.
Prince also raised concerns about the lack of data Apple provides about customers, a long-standing complaint from many subscription services, particularly magazines and newspapers dependent on advertising.
"Apple still insists on inserting itself between developers and their customers, which means developers will continue to lack visibility into why customers churn -- or who even qualifies as a long-term subscriber," he explained.
Starting June 13, Apple will be halving its cut to 15 percent for app subscribers who maintain their service for a year, with a 60-day grace period during which customers can cancel and resubscribe. Beginning in the fall, the company will also let services charge a higher rate for new subscribers while keeping prices lower for existing customers.
Comments
Not even a Spotify fire sale is going to bring me back. I don't like their software and nothing I say is going to change their design. I can tolerate Apple's design missteps because it's integrated in a better fashion.
Your attitude expressed in the question contains your answer, dumbass.
Oh... because they want customer data but that isn't going to get them a headline.
Well that and the customer will be promoted at the end of three month trialto agree to increased pricing so they can't just use sign-up then forget or make it hard to un-sign-up. Which is a pretty rubbish business model.
I still prefer Spotify premium to Apple Music.
I tried Apple Music 2 times. When it appeared with the free subscription for several months, and then recently for one paid months.
Apple Music has very inconvenient design of playlists and how I can search for music, and how I want to discover music. Though the spotify app design is bad (I would need to reach my playlists easier and faster, e.g. also play playlist after I just open it), but their music discoverability and search are much more convenient than Apple Music.
As for the business model, you guys all that smart - suggest the business model for Music service which would be 'successful'. I bet you can just say that 'Spotify are dumbasses'.you can just talk and theoretize how cool you would be if you would be doing something in Music business.
Meanwhile (and how it has always been) these people are free to operate their own terms outside of the app store and just use the App Store as a convenient distribution platform. You'd think they'd be able to piece together a compelling offering considering how much cheaper it is to purchase a spotify subscription outside of the Appstore.
In short: Spotify complain too much, about too little and need to put on their big-boy pants.
Apple in 1 years has become 40% of the size of Spotify, the squeeze will be even worse this year as Apple learned from their first year errors. By next year I expect Apple to be close to overtaking Spotify and by year 3, Spotify gets crushed by Apple and Google.
From the perspective of the app developer there are some serious flaws in the app store business model:
- you cannot cherish your preferred customers. Actions like "you've bought my app A, so you get 30% discount for my app B" are not possible.
- the chances that your app is discoverd in the app store has approached
0%. The app store search function is lousy. You are wondering what you
get in return for the 30% cut Apple is taking, because you have to do
all the marketing yourself
- unless you prove to Apple that the coordinates of a user are needed for the functioning of your app, your app is not allowed to ask for the user coordinates. As such, offering additional benefits (e.g. on your website) to your customers is quite difficult.
- you cannot launch a marketing campaign with coupons
- if you are selling and promoting in a non US dollar country, you might face out of the blue changes in the pricing, because Apple changed the exchange rate. Due to the fixed pricing table in dollar, it is not possible to keep the price in your currency, even if your app is only available in your country. This can kill your marketing campaign.
The first 2 points are also applicable to the Google Play Store.