Spotify’s not happy about the way that Apple charges a 30 percent fee toward sales thorough its App Store, including subscription services.
The tax structure means that in order for Spotify to make $9.99 per month for its premium service it has had to raise the app subscription price to $12.99 — which prices it out of the market compared to the lower-cost Apple-owned Beats Music service, set to launch this summer.
Although Spotify costs just $9.99 per month if users subscribe online, Apple does not allow the app to redirect users to a browser where they can access the lower-priced subscriptions.
As Apple writes in its App Store review guidelines, “Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a ‘buy’ button that goes to a web site to purchase a digital book, will be rejected.”
“They control iOS to give themselves a price advantage,” an industry source tells the website Re/Code. “Thirty percent doesn’t go to any artist, it doesn’t go to us, it goes to Apple.” A possibly different source describes the 30 percent fee as “f*cking bullshit.”
Spotify has every reason to be unhappy about Apple at the moment, given that Cupertino is reportedly pushing music labels to pressure Spotify to drop its free tier service.
Spotify’s not the only organization upset with Apple’s music streaming plans, either. Apple is currently being scrutinized by both the U.S. Federal Trade Commission and the European Commission, regarding concerns that the company could use its dominant position to disadvantage rival companies.
A major redesign of Beats Music is supposedly set to debut at this year’s WWDC, rebuilt from the ground up by none other than Nine Inch Nails frontman Trent Reznor.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
9 responses to “Spotify thinks App Store charges are squashing the competition”
Isn’t the APP Store still an Apple Store owned and operated by Apple ? Since when do vendors get to question the store’s business model? They can withdraw their app and go to Google, Amazon or Samsung and sell their service there. All of those have app stores.
Waiting for the first genius to chime in that the Feds should break up Apple’s monopoly on Apple products and services.
Nice thing about targeting only the high end of the market is that aside from capturing the fattest profit margins, no one can accuse you of being a monopolist.
Let me see if I understand… Spotify wants to enjoy the fruits (no pun intended) of the market that Apple has created, but wants to complain that they don’t want to play by Apple’s rules. Apple does not have the luxury of telling Spotify what Spotify should charge for its service. Why should Spotify have any say over Apple’s rates. If they don’t like it, don’t subject your service to the Apple market.
No, they’re complaining that Apple has gotten into the same business that Spotify is in, but Apple gets to play by a different set of rules.
30% of a cut seems high……I agree but doesn’t Google Play also take a 30% cut? I don’t know about Windows or Blackberry cuts but basically Spotify ought to be criticizing both Apple and Google……..and yes, I do agree with their overall criticism.
I don’t see the issue here, that 30 percent is a running cost, servers across the world don’t buy and support themselves.
Just because Apple has a bigger presence and more users doesn’t mean Spotify should be allowed to sell their apps for free.
Yes Apple has its own streaming service but so what, if they do it right it could well see the end of Spotify anyway.
I think services like Spotify where you can listen to music for free (even with ads) is a useless model, the artist aren’t making any money.
Streaming services should be affordable, with no ads
yeah, pretty stupid. Its like saying walmart charges you money for displaying your products in their stores but doesn’t charge walmart branded products the same fee. If you don’t want to put up with the walmart fees, then you are free to take your product elsewhere. If walmart is bringing you customers, then they demand a cut. I see no difference between that real world analogy and app store guidelines.
It’s only Spotify that can price itself out of the market. It’s they who put the subscription fee to $12.99, Apple didn’t make them do it. Idiots.
““They control iOS to give themselves a price advantage,” says an industry source” Uh, of f’n course they do. Why wouldn’t they? It’s their store, it’s their OS. Listen, if you want to sell your pies in my pie shop, I’m certainly going to expect you to understand that my pies are going to get an advantage.