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Addressing Spotify’s Claims

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Re: Addressing Spotify’s Claims

#551

Post by deminature »

segphault wrote: post #7

> Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters. Uh, I seem to recall Apple being forced to reverse some brazenly greedy policies for their music service when a high-profile artist called them out and withheld content in protest. For Apple to characterize itself as a champion…

Spotify also only recently became profitable [1]. I'm not endorsing their extremely low artist payout rates, but it's not because they're greedily hoarding money the way Apple is implying.

[1] https://www.theverge.com/2019/2/6/18214331/spotify-earnings-...

Re: Addressing Spotify’s Claims

#552

Post by abalone »

supernova87a wrote: post #438

As with so many matters that involve money, arguments fly around left and right that claim to be on principle, but really aren't. When you see ESPN and Comcast argue over showing the World Series, don't buy the argument that one of them is "trying to prevent loyal customers from being able to see their favorite game", or when your local hospital group withdraws from your employer health plan that "the other side is t…

> When you see ESPN and Comcast argue...

Important detail you left out: Comcast is a regulated utility.

Things are different at scale. There is absolutely ample precedent for regulating pricing for large scale utilities.

Re: Addressing Spotify’s Claims

#553

Post by FireBeyond »

briandear wrote: post #459
fauigerzigerk wrote: post #183

Earlier quoted context omitted.

I don't know how you arrive at that conclusion unless you seriously compare physical with digital distribution. Retail margins are famously low (very low single digits). The problem is that Apple and Google are exploiting their mobile content distribution oligopoly so aggressively that they are practically begging for a regulatory crackdown. I wonder why companies are getting carried away with this kind of profit des…

> Retail margins are famously low (very low single digits). The margins and costs include more than the wholesale price of the product. The correct question is how much does a farmer get paid for a gallon/liter of milk and how much is that same gallon/liter sold for at the shop. Farmers in the US are getting roughly $1.00 per gallon for whole milk. How much is it selling in the store? Roughly $3.50. Anytime people ta…

So your response is to find a bunch of features and assign an arbitrary 5% value to each of them and conclude Apple is doing you a favor?

> Apple handles chargebacks/disputes for you.

In many cases they forward the complaint on to you as the developer for "does not perform as described".

> If you ran payment processing yourself through Stripe, you might pay 3%. ... We also have fraud prevention and management, which Apple provides. An app developer never has to deal with fraud on the App Store.

You're double dipping. You already subtracted some money for Stripe, unless you're implying they _don't_ have fraud protection and management?

> Next you have to deal with a CDN for delivery of the purchased app. Where do you store the file? How do you secure it? Who pays for the bandwidth of distributing it? Who maintains that system? With the App Store you don’t have to deal with any of that. I would say that’s worth at least 5%.

Or Cloudflare for $20/mo?

> So the App Store gives you the ordering system, access to many more markets than you’d likely normally be able to handle yourself as well as the aforementioned search and discovery. There is also the trust factor: why would I download some random music player from some random site off the internet? That concern is going to create a high barrier to getting large numbers of people to download the app. Not so on the App Store.

> I would say all of that is worth at least 8%.

Sounds like an artificial barrier to me. "Insert roadblock, charge for roadblock, say I'm doing you a favor". I'm also not sure how you think you magically don't have to do any SEO or marketing just because you're in the Apple Store, let alone that it's automatically worth "8%".

No-one is saying that the Apple Store doesn't add value or manageability.

But I am questioning your magic calculations that just happen to reduce Apple's tax to effectively nothing.

Apropos of anything else, developers handling "millions" of downloads are in the single percent range. And can also afford economies of scale to support things themselves, CDNs, merchant accounts and the like. But instead they have to pay Apple's flat rate.

Re: Addressing Spotify’s Claims

#554

Post by abalone »

ppeetteerr wrote: post #506
weavejester wrote: post #479

Earlier quoted context omitted.

" There's no public right to have a music app be charged a certain amount that's called "fair". Spotify could charge nothing to consumers, and be charged nothing by Apple. It's their choice. It's Apple's choice." Competition laws place limitations on what a business can do. They're not free to sell or price entirely as they please. In this case Spotify are arguing that Apple is using its dominance of the smartphone m…

I keep hearing this but it doesn't make it true: Apple does not have dominance in the smartphone market. It barely reaches 20% of the smartphone market in the EU.

It dominates the profits (87%)[1] which probably correlates with the premium subscriber market.

[1] https://www.forbes.com/sites/chuckjones/2018/03/02/apple-con...

Re: Addressing Spotify’s Claims

#555

Post by teddyfrozevelt »

sbuk wrote: post #547
weavejester wrote: post #479

Earlier quoted context omitted.

" There's no public right to have a music app be charged a certain amount that's called "fair". Spotify could charge nothing to consumers, and be charged nothing by Apple. It's their choice. It's Apple's choice." Competition laws place limitations on what a business can do. They're not free to sell or price entirely as they please. In this case Spotify are arguing that Apple is using its dominance of the smartphone m…

> "In this case Spotify are arguing that Apple is using its dominance of the smartphone market to give an unfair advantage to its own music store." You forgot to add context; by charging 30% on IAPs . The fact is Spotify don't need to use IAPs for subscriptions. Apple even mentioned this in TFA.

But Spotify can’t even tell users how to upgrade to premium according to Apple’s rules. The best they can say is “You can’t upgrade to Premium in the app. We know, it’s not ideal.”

Re: Addressing Spotify’s Claims

#556

Post by simonh »

therockhead wrote: post #410
simonh wrote: post #389

Earlier quoted context omitted.

There’s a thread of truth in what you’re saying, but it unravels on close inspection. Proprietary cables are hardly new, and to be fair those cables and connectors are usually way better than the standard stuff. Firewire and thunderbolt were actually released as open standards and saw decent adoption. Lightning is far superior to Micro-USB. Just listen to the wailing and gnashing of teeth by Macbook owners having to…

Historically the console manufacturers sold their consoles at a loss and only made profit on games sales. This might have influenced our perspective on the sales model.

Not always. Nintendo was making a profit in each Wii sold, as a unit, from day one.

Re: Addressing Spotify’s Claims

#557

Post by mythz »

efdee wrote: post #393
mlthoughts2018 wrote: post #293

Earlier quoted context omitted.

This is the clearest way to say it. Spotify has utterly no argument in this case. Their claims make no sense, it’s just a lot of noise for Spotify to drum up an angry mob of people who vaguely misunderstand “monopoly” and hate Apple for whatever unrelated reasons. If you want to put your product into the distribution channel that Apple spent shitloads of money to create and operate, then you have to pay their fees an…

Nobody is talking about the price of app distribution though. It's about the cost of a Spotify subscription. This subscription has nothing to do in the slightest with Apple. Apple doesn't have to promote it, distribute it, host it, pay for its bandwidth, nothing. Spotify already has their own distribution channel (sign up on their website), and Apple is prohibiting them from mentioning it on iPhones and instead force…

The cost of distribution is the cost of selling their commercial digital services on Apple's platform.

If Spotify deems 30%/15% split is too much to be able to sell their services on iOS, they don't need to participate in that market, they can continue selling their online streaming services on the Web and Android and and spend the money they would've paid Apple in distribution costs in more advertising/marketing to acquire new Customers.

If the App Store revenue share is so lucrative they can also consider that as an opportunity and are free to build and sell on their own platform, invest their resources in building hardware + mobile devices, OS, Apps + software, dev tools, distribution channels, retail stores, marketing/advertising to entice everyone to use it and enjoy the 30%/15% revenue share from everyone else choosing to participate and thrive on it. Or maybe it will end up being cheaper for them and they'll get more revenue because of iOS's larger and quality user base to just pay the App Store fees for being able to offer their commercial services to the iOS ecosystem created with Apple's investments.

Re: Addressing Spotify’s Claims

#558

Post by ThomPete »

coldtea wrote: post #529
ThomPete wrote: post #487

Earlier quoted context omitted.

Just as Apple could allow them to build their own payment stack into it and circumvent the app store. But they don't.

Well, you build the environment, you make the rules is kind of the whole point.

That's a very shallow point though. Technically correct but misses the point completely.

Re: Addressing Spotify’s Claims

#559

Post by sbuk »

teddyfrozevelt wrote: post #555
sbuk wrote: post #547

Earlier quoted context omitted.

> "In this case Spotify are arguing that Apple is using its dominance of the smartphone market to give an unfair advantage to its own music store." You forgot to add context; by charging 30% on IAPs . The fact is Spotify don't need to use IAPs for subscriptions. Apple even mentioned this in TFA.

But Spotify can’t even tell users how to upgrade to premium according to Apple’s rules. The best they can say is “You can’t upgrade to Premium in the app. We know, it’s not ideal.”

If that is their argument, then it's pretty weak IMO.

Re: Addressing Spotify’s Claims

#560

Post by ppeetteerr »

abalone wrote: post #554
ppeetteerr wrote: post #506

Earlier quoted context omitted.

I keep hearing this but it doesn't make it true: Apple does not have dominance in the smartphone market. It barely reaches 20% of the smartphone market in the EU.

It dominates the profits (87%)[1] which probably correlates with the premium subscriber market. [1] https://www.forbes.com/sites/chuckjones/2018/03/02/apple-con...

That's not how you measure market dominance.
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