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Comment by pedroaraujo | Hacker News Reader

A 30% cut is something that Spotify needs to pay to Apple for every user that subscribes to Spotify through Apple devices. This cost doesn't doesn't exist for PC users, for example.

They probably could live with it but I can understand why it feels like an artificial cost that Apple came up with. It would be an understandable cost if they were selling the Spotify App through the App Store and using the actual store infrastructure for supporting Spotify... but they are not.

The app is nothing more than a portal to the entire Spotify infrastructure, it doesn't weight anything to Apple.

And then we have the subject of the direct competition, Apple Music doesn't need to have their profits cut in 30% because they are owned by Apple itself.

And it's even worse if they are using Siri, Homepad and Apple Watch to make Apple Music more appealing in comparison to Spotify.

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> A 30% cut is something that Spotify needs to pay to Apple for every user that subscribe to Spotify through Apple devices

Not so as I understand it. Only if you put the option to subscribe into your app in the app store. That cost doesn't exist for Mac or PC, but Apple doesn't heavily curate and have costs associated with the wild west of downloading apps from the web.

> it doesn't weight anything to Apple

There are significant costs associated with the app store, no? Part of the reason users gravitate towards the iPhone is because you can download high quality apps without malware, viruses, etc.

> Apple Music doesn't need to have their profitts cut in 30% because they are owned by Apple itself.

Conceptually I'm with you. This is an area I'm struggling with though. The Apple Online store charges accessory manufacturers a fee to be featured there. Should Apple also pay a fee to feature their own products there? I don't think so.

> it's even worse if they are using Siri, Homepod and Apple Watch to make Apple Music more appealing in comparison to Spotify

Why? They've made the hardware. Why should they have to let Spotify run on it in the exact way Spotify wants? (You can Airplay Spotify to Homepod.)

> There are significant costs associated with the app store, no? Part of the reason users gravitate towards the iPhone is because you can download high quality apps without malware, viruses, etc.

That should be covered by the one time fee that developers pay to Apple in order to publish apps into the App Store. I am not sure if a simple binary needs a 30% cut of the entire Spotify profit to keep up with the costs of hosting an app there.

> Why? They've made the hardware. Why should they have to let Spotify run on it in the exact way Spotify wants? (You can Airplay Spotify to Homepod.)

Because Apple is using a completely different market, which they have a strong presence on, to increase the value of Apple Music and consequently devaluing any other competing music streaming services.

> That should be covered by the one time fee that developers pay to Apple in order to publish apps into the App Store. I am not sure if a simple binary needs a 30% cut of the entire Spotify profit to keep up with the costs of hosting an app there.

We're now into the murky world of trying to tell other people what their cost base or margins should be.

> Because Apple is using a completely different market, which they have a strong presence on, to increase the value of Apple Music and consequently devaluing any other competing music streaming services.

Another view is that Apple fairly charges a consistent 30% to all customers in the app store. In the same way as Amazon doesn't pay to list its own products on Amazon, and Google doesn't pay to advertise Chrome on google.com, Apple should not have to pay to market its own services on its own marketplace.

This is the core issue. Apple using their dominant market position in the hardware/operating system markets to push anticompetitive practices for their product in a different market (Apple Music).

I don't see how this is much different than IE. Maybe even worse in some ways. But regardless, it is very clearly manipulating the market artificially in Apple's favor.

Apple is not dominant in the hardware market in the same way IE was. Nowhere near.

For those who have significant sums invested in the App Store, they are effectively dominant as there is no way to switch app licenses to a different app store.

Sure, but the rules are _reasonably_ unambiguous and unchanging. The 30% cut has been in place since day one. If Spotify didn't like it, they had the choice to focus their attentions exclusively on other platforms. That wasn't the case with Windows+IE, when effectively there were no other platforms of any size.

And worth noting that Spotify grows by millions of paying subscribers every quarter without the app store. They're currently choosing to focus exclusively on other channels rather than try to pay the 30% and… doing better than Apple Music…

> Apple using their dominant market position in the hardware/operating system markets to push anticompetitive practices for their product in a different market (Apple Music).

Allegedly anticompetitive.

Amazon, Google, Microsoft, Facebook all engage in similar behavior by giving preferential treatment of their products/features/services.

I would be upset because I bought the hardware and they arbitrarily won't let my music from Spotify play on it while their own music does.

Remember it's my device, but theirs. Not apples. If they are going to allow third party apps then do so, but there's no technical reason to not allow the service.

Imagine Ford says you can only use a certain brand of tires on your new car, or can only buy tires through the dealership. That's what's going on here.

My device *not theirs.

That's the reason I don't buy Apple stuff to begin with.

Wha? You buy an Amazon Alexa and it only supports certain music services. Certain Bose speakers have Spotify integration https://www.spotify.com/uk/bose/ - how is this not the same?

It's your device that you bought, which quite clearly doesn't support the things you want, so why did you buy it?

>That should be covered by the one time fee that developers pay to Apple in order to publish apps into the App Store

As a developer I can push a hundred updates per day if I want to, and they all have to be reviewed by a human. How large of a "one time fee" should be expected to cover the cost of that review?

> That should be covered by the one time fee that developers pay to Apple in order to publish apps into the App Store.

That seems quite unrealistic. Apple certainly has recurring costs to keep the app store running. Taking a one time publishing fee wouldn't be sustainable long term.

> Why? They've made the hardware. Why should they have to let Spotify run on it in the exact way Spotify wants? (You can Airplay Spotify to Homepod.)

I perfectly understand why Apple would be as anti-competitive as they can away with on their plateform. It benefits them tremendously.

What I don't understand is why some comsumers, who are definitely loosing from the situation - even if you prefer the Apple solution competition tends to bring price down - are systematically defending Apple. It's not like we are talking about a small and endearing company here.

Out of curiosity, do people really view using Apple products as a life style choice ? I liked my iphone but as far as I am concerned it's a mass market device.

All I know is I don’t have to deal with blue screens, malware, and facetime has worked flawlessly for 10 years. And I can walk into a store and get a replacement device in 30 minutes when I break it. The time and effort I’ve saved not dealing with Windows/Android BS (which I experienced) has been well worth it.

>who are definitely losing from the situation

Maybe you haven't considered that some consumers don't feel like they're losing from the situation. Maybe some consumers feel like they are winning because Apple's interests align with their own, and the interests of Apple's competitors are not aligned with their own?

I like having an app store I can trust to not have malware, I like knowing the apps I download have had a human review them for quality. I like having hardware with an OS where the developer of the OS controls when I get updates, not a carrier or manufacturer who are not affiliated with the developer. I like getting security and feature updates for my OS for 5 years. I like paying the developer of my software so the developer has a profit structure that doesn't necessitate spying on me. I like knowing that every piece of software pre-packaged on my device was put there by the developer of the OS with their explicit approval, and not sold to the highest bidder. I like knowing that the software on my phone is exactly how the developer planned it, and not modified by an unaffiliated device manufacturer to the point where multiple websites exist for the sole purpose of creating ROMs that mimic the developer's intended software, necessitating that I now either trust the unaffiliated hardware manufacturer or trust some random person on the Internet to deliver me a clean ROM.

There are platforms that are open and free to use however you see fit. They exist and they are great options. Very modern and easy to use and as open as you want them to be. I prefer the option that isn't open to modification. Products exist for both use cases.

> I like having an app store I can trust to not have malware, I like knowing the apps I download have had a human review them for quality. I like having hardware with an OS where the developer of the OS controls when I get updates, not a carrier or manufacturer who are not affiliated with the developer. I like getting security and feature updates for my OS for 5 years. I like paying the developer of my software so the developer has a profit structure that doesn't necessitate spying on me. I like knowing that every piece of software pre-packaged on my device was put there by the developer of the OS with their explicit approval, and not sold to the highest bidder. I like knowing that the software on my phone is exactly how the developer planned it, and not modified by an unaffiliated device manufacturer to the point where multiple websites exist for the sole purpose of creating ROMs that mimic the developer's intended software, necessitating that I now either trust the unaffiliated hardware manufacturer or trust some random person on the Internet to deliver me a clean ROM.

And none of that has anything to do with what we are discussing. Apple could still do all this thing while allowing more competition on the plateform. For example could you explain to me how allowing apps competing with the system ones or allowing other streaming service to cast and use the watch would prevent any of what you listed ?

It is not an either/or situation between two opposite situations. There are plenty of inbetween possibilities.

> feel like they are winning because Apple's interests align with their own

Apple interests is selling you phone and apps so they can make money. Unless you are a stockholder, I don't see how their interests can align with yours. Unless you take pleasure in paying more, you are clearly losing from the situation.

> Not so as I understand it. Only if you put the option to subscribe into your app in the app store. That cost doesn't exist for Mac or PC, but Apple doesn't heavily curate and have costs associated with the wild west of downloading apps from the web.

The cost is there whether or not you pay through the App Store mechanisms. You have to pay it, even if you provide your own payment mechanism.

> There are significant costs associated with the app store, no? Part of the reason users gravitate towards the iPhone is because you can download high quality apps without malware, viruses, etc.

Sure. Then charge all apps for the cost of being in the App Store. It doesn't excuse a situation where Apple directly competes with Spotify and then charge Spotify 30% they don't charge for Apple Music. Thats a textbook violation of antitrust law.

> Conceptually I'm with you. This is an area I'm struggling with though. The Apple Online store charges accessory manufacturers a fee to be featured there. Should Apple also pay a fee to feature their own products there? I don't think so.

You can buy your accessories other places as well. Apple's Online store doesn't have a monopoly on selling accessories to iPhone users. The App Store on the other hand is the only mechanism to sell to iPhone users. The alternative is to allow competing App Stores on their platform.

> Only if you put the option to subscribe into your app in the app store.

Yes, they get 30% only if you subscribe through the app store. That's already too much for a service that doesn't use Apple's infrastructure, but Spotify played along for a while. Their main complaint however is that Apple is outright censoring the Spotify app so that it makes no mention to other options for upgrading to Premium.

That's clearly foul play in my book. I wonder if you would still defend it if instead of Apple, it was e.g. Microsoft using Windows Defender to block Chrome downloads.

> There are significant costs associated with the app store, no?

You pay a $99 per year fee as a developer to Apple. That should cover their costs for general QA. If they feel that popular apps need to pay more, they can still set a higher fixed price. But claiming that 30% is to cover Apple's QA costs is ridiculous.

> Why should they have to let Spotify run on it in the exact way Spotify wants?

Because of the way they market Homepod. They present Homepod as interoperable with your iPhone, but it turns out they place artificial limits to interoperability. I wonder, what would Apple do in case of a mass-return of Homepods from customers unhappy by the lack of interoperability with Spotify or other apps?

>Not so as I understand it. Only if you put the option to subscribe into your app in the app store. That cost doesn't exist for Mac or PC, but Apple doesn't heavily curate and have costs associated with the wild west of downloading apps from the web.

They can do the purchases on their own website, but its against App Store rules for an app to tell users that they have the option of upgrading outside of IAP.

How much does Spotify pay for "PC users"? Of course, they have Customer Acquisition costs there too. Google gets the money. Why do they not fight Google? Spotify got big through the apple app store channel. Now that they are big they start whining about the cost of the channel. If you don't like it, then don't use it?

I don't think Spotify complains about customer acquisition costs. They complain about having to give away 30% of their revenue forever. That's not the case on the PC, or anywhere else.

As I said: These are the costs of the channel. You don't need to use the channel.

You do, that's the crux of the matter. Apple can happily claim that 30% is the overhead cost of providing the subscriptions service, that's within their right. Looking past how ridiculously high 30% is the fact that they are so hostile to apps having users pay via means that aren't the app store is the issue. For example Spotify aren't allowed to even tell people in the iOS app that they can subscribe with a credit card on the web without facing rejection.

No, you don’t. Just don’t work with Apple.

Their primary complaints seem to center around the rules being unfair and arbitrarily applied.

> A 30% cut is something that Spotify needs to pay to Apple for every user that subscribes to Spotify through Apple devices.

Can you even subscribe through the app? Spotify could simply yell you so go to your web browser to subscribe. That’s what Amazon does for its video etc and it doesn’t seem to cause them any problems.

I subscribed to Spotify via their web site and it works fine on my phone. I’m sure they pay nothing to Apple in order for me to listen. That makes me feel that this is a publicity play by Spotify no matter what the more general (non-Spotify) merits of the issue might be.

In the article, it mentions several times that Apple has rejected apps for linking to the web page to upgrade, or for even mentioning it is possible to upgrade (when IAP is not enabled).

The article says so but I just tried to watch a video on iOS amazon video and it tells me to “Buy through the Amazon website or on your TV”. So I’m sure Spotify could say the same.

I believe it's about the type of product you're paying for -- the Spotify site specifically says Apple doesn't allow _content subscription_ services to be advertised through apps. In addition, I bet Prime gets away with it because it's not _purely_ a content subscription service.

I was about to argue that in a free market, 30% would never be a reasonable price, but then I looked and that's what Steam charges and they have multiple viable competitors on the same platform, so now I don't know.

But hosting full games is a different story than hosting apps. Not to mention that Steam offers more features, such as cloud saves and an entire social network.

From what they posted, 30% is not the main reason of their complaint. I guess it's more about that they now have to face Apple Music, which has such a huge advantage over them, no fee, better OS support, .etc.

Steam has been hemorrhaging publishers as of late for exactly that reason, and has started offering larger publishers lower rates. That probably still won't be enough.

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