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> Spotify wouldn’t be the business they are today without the App Store ecosystem,

Apple makes Microsoft look like an angel. Using this argument, Microsoft could claim they could have made hundreds of billions if they got a cut out of every Windows app sale. Oh, and that those companies wouldn't exist if it weren't for Windows.

Apple popularized trusted computing. And yes, it's as bad as we feared it would be back in the '90s.

Ehhh I feel like Unix/Linux popularized trusted computing, Apple merely added a price tag on it. But I may be blinded by my techie point of view about "popularized".

> I may be blinded by my techie point of view about "popularized"

Yeah, unfortunately it seems like we're still in the state where UNIX/Linux can't popularize anything, especially themselves, unless they're repackaged by someone else :(

Apple popularized me not spending hours of time troubleshooting and restarting and letting me do what I want to do.

Sad/angry/sick macs the world over would like a word with you.

Look at what Apple is doing to native integration [1]:

Because it uses these deep integration APIs, we're only allowed to distribute the application using the macOS App Store (whose rejections, appeals, and eventual acceptance made for quite the stressful saga over the last week and a half)

Imagine having to get certified by the Linux Foundation, under distribution clause, to access native Linux kernel APIs. But that's what the developer of Wiregaurd has to do to gain access to native macOS integration.

[1] https://lists.zx2c4.com/pipermail/wireguard/2019-February/00...

In addition, Windows 10 requires that Microsoft approve and sign each kernel driver that's loaded, actually.

https://github.com/MicrosoftDocs/windows-driver-docs/blob/HE...

It doesn't seem like Apple said that Spotify wouldn't exist. Just that they wouldn't be the business they are today.

Which is absolutely true of Microsoft as well. The sheer productivity boon that Office has added to businesses around the world is unmatched by practically any other piece of software ever written. Most of the businesses would still exist, but they wouldn't be the same business. Excel, Powerpoint, and Word are ridiculously important software.

> And Spotify isn't asking to keep 100% of the revenue. Spotify is asking for a choice of letting users pay how they wish.

But users can pay how they wish, if Spotify didn't mind the 30%/15% cut. Spotify simply can't direct users to use their website to use an alternative payment system. I think that is a very reasonable policy for an app store, as it protects its users from poorly implemented financial info handling and scams.

I agree that Apple's article is more hostile than it needed to be, but it is only in response to an unreasonable attack by Spotify on Apple's IAP policies.

Regarding the walled-garden App Store policies of Apple, it's not friendly to enthusiasts and some developers, but it is good for most Apple consumers, and helps less tech-savvy users trust Apple's App Store.

Android has freer permissions on installing apps, because that is necessary for vendor adoption. However, it is unclear if this is still ultimately a better decision for consumers on aggregate.

> as it protects its users from poorly implemented financial info handling and scams

And, just coincidentally, that 'protection' is very lucrative for Apple.

> But users can pay how they wish, if Spotify didn't mind the 30%/15% cut. Spotify simply can't direct users to use their website to use an alternative payment system. I think that is a very reasonable policy for an app store, as it protects its users from poorly implemented financial info handling and scams.

Give me a break. It doesn’t take 15-30% to implement a secure payment system. This is proven by Apple itself: Apple Pay charges very little for secure payments for physical goods.

Sure Apple makes money off their share of the payment system. Why shouldn't they? They built the whole thing from scratch, including the phones it runs on.

Also Apple doesn't just support the secure payment system, they also handle distributing the money and providing customer support to the end user and the developer. That isn't free either.

If you don't like the Apple model, there are alternatives.

Apple's argument (which seems compelling if we judge it on the result) is that their model is the best solution for customers and developers.

>If you don't like the Apple model, there are alternatives.

What alternatives? Without allowing developers to create 3rd-party payment systems, all payments must be routed through Apple.

>Apple's argument (which seems compelling if we judge it on the result) is that their model is the best solution for customers and developers.

Apple's model does not seem to be compelling for developers/content creators. Developers need to pay a large (for some) amount of money and give Apple a large cut of their profits.

It's also unclear why Apple's model is best for consumers. While it seems good because it protects consumers from scams on third party sites, for reputable companies like Spotify or Netflix, there doesn't seem to be a risk, except for increased prices to the end user because companies need to compensate for losing a third of their earnings.

But it's quite interesting that Apple seems okay with not taking a cut of e.g. Uber, but does want to take a cut of Spotify. Why should they be treated differently?

It's not an even playing field though. Apple has a competing music service and they can undercut their competition by avoiding the 30% transaction fee, squeezing competitors into submission.

I think this is the cleanest seam to cut on. If Apple had to compete fairly in the ecosystem the 30% cut would much more likely be something Spotify could stomach -- not an existential threat to their business, just the cost of doing business on iPhone.

As things stand, Apple has mixed priorities. They want to enable developers where those developers add uniquely to the platform, but they want to outcompete developers where they cannibalise sales from Apple's own products.

This dual remit doesn't help consumers. If Apple's music offering had to pay the 30% tax "for real", they might have to charge $13 too, and that might make the iPhone an expensive platform for music-listeners, and they might be incentivised to cut their margins to compete with other platforms. We could all agree, "Sure it's expensive, but it's their turf and they can run it badly (to their own detriment) if they want."

Not sure where you draw the line between first-party app and OS functionality though. I imagine in some cases it'd be less clear than here.

>>if Spotify didn't mind the 30%/15% cut. Spotify simply can't direct users to use their website to use an alternative payment system.

No they cant, that is a violation of Apples Policies and would result in the App being removed, Amazon tried that with ebooks years ago. You can not redirect a user for payment inside the app, to a payment system outside the app.

>Regarding the walled-garden App Store policies of Apple, it's not friendly to enthusiasts and some developers, but it is good for most Apple consumers, and helps less tech-savvy users trust Apple's App Store.

It is not an either or option. I think Google has struck a good balence, Their App store is pretty locked down today, but if you know the "hidden" menu and what steps to take you can easily unlock the device and install alternate stores and apps.

There is zero security reason why Apple could not supply this type of hidden unlock for people, it is pure monetary control that they desire

IMO apple’s subscription management is greatly undervalued. When I go there and cancel a subscription, it just cancels and that’s it. No intentionally buried links to hunt down, no “But why are you leaving? :(“ guilt trip modal, no convoluted payment method removal process.

I would be much more supportive of efforts to push Apple to allow third party payment systems of the practices I mentioned above weren’t so common.

> Apple connects Spotify to our users.

This is a bit of a ridiculous claim. From another perspective, an iPhone is just another way to access your favorite apps and content. Taken to more of an extreme, imagine Comcast or T-Mobile claiming that they provide users to Spotify... Apple is easily just a middle man here but they make themselves sound like the entity that owns the users and plugs them into apps. It's not like people buy iPhones just because they're shiny pieces of aluminum and glass, and using apps is secondary to that.

This reminds me of the ISPs getting upset about the bandwidth they have to deliver on behalf of Netflix.

"Our platform enables your app" is true in both cases. But so is "our app brings people to your platform." The power imbalance is that it's easier to build a competing app than a competing app store or ISP.

The 'our users' bit is actually one of the most annoying bits. As if anyone that uses iOS is under Apple's control as to what they are or aren't allowed to do or be exposed to. It reveals a lot about how they view their position in the relationship. Between them and users. As if when I download an app or game, Apple is bestowing me to the app developer.

That's right back to the net neutrality debate and the claim that ISP should charge prices that scale with customer profitability rather than network load.

> I think that's a very hypothetical claim.

How is this is a hypothetical claim? It is blatantly obvious. Spotify's early days were entirely dependent on the mobile marketplace. Even now, desktop use constitutes a tiny fraction of their total users.

It's not a hypothetical claim at all, really.

> 30% / 15% is a very steep price / revenue loss

Source? Because 30% / 15% is a common middleman commision for most platforms.

> Google provides a similar App store service

This is ridiculously far from the truth. Google's Play Store isn't curated in the least. Malware regularly pops up, the review process is effectively nonexistent, and the quality of apps on the Play Store is thus far below what one can get from the App Store.

There are costs to reviewing every app. I don't think it's fair for you to say 30% is unfair unless you (a) compare the costs to other middlemen, and (b) figure out how expensive the review process and other infrastructure is.

In general, all you really seem to be doing is promoting freeloading off the App Store. Utilize the benefits it provides, but have users pay for your service via a side-channel so you don't have to contribute back to the ecosystem.

> Spotify's early days were entirely dependent on the mobile marketplace

Spotify's earliest days were before smartphones. I had Spotify on my computers before they'd even released an iPhone app.

This is response to Spotify's site which has the timeline - https://timetoplayfair.com/timeline/

Spotify launched on Desktop after the App Store launched.

> Spotify launched on Desktop after the App Store launched.

Your link seems to say the opposite.

Um, no? Are you confusing between launch of the App Store itself and launch of Spotify's app on App Store?

You're acting like Apple gets nothing out of a healthy app ecosystem (if there weren't apps, no one would bother to buy an iPhone), or from their App Store review process (many people prefer the iPhone because they feel safer with iPhone apps than they would with Android apps). It's not like Apple provides a developer SDK and reviews apps out of the goodness of its heart.

Underrated comment.

Have you ever tried getting a subscription with Spotify on an account linked to facebook, where the facebook account was disconnected?

It is impossible to stop the subscription. No thank you, I will trust my payments with Apple.. Esp. subscriptions.

This is something I think people miss. Almost every other company I have subscriptions with make them a pain to cancel. Subs through the App Store are easy to find and cancel. It's very consumer friendly. Plus as you said, I'm not a fan of giving every service I want to use my CC.

Is that worth 30%/15%? I don't know. The fact that 15% exists shows that Apple is thinking about the pricing and adjusting. Apple just doesn't do anything quickly.

> Let’s be clear about what that means

Is anyone else bugged by the "Let's be clear/To be clear" prefix that gets thrown around a lot these days? It seems unnecessary. If you're being clear then that will be self-evident. It seems like a way to preemptively trick the reader in to taking whatever follows as correct and authoritative.

I wonder if this is why it has become so popular

https://www.politico.com/story/2009/08/obamas-catch-phrase-l...

They can fuck right off with that rhetoric - businesses built and popular before the App Store get strongarmed in the same way.

We can also say Apple Music wouldn't be the business today had Spotify not explored the business of music streaming years ahead. Now they just took the idea themselves and pretend that Spotify contributes nothing.

Realising you can make a great inexpensive product by paying a minuscule fraction for the content isn't exactly business innovation. The innovation was paving the way for artists to be stiffed; Apple had no choice but to compete in order to stay viable.

I think Spotify was quite happy with _not_ keeping the in-app transactions, in exchange of paying a smaller cut to Apple.

They’re not milking anything. Apple has, as far as I know, always charged 30%. What has changed is the way we buy and pay for apps and services.

Everyone wants to move to the subscription service model and Apple has developed rules accordingly.

I thought the problem was, that their own apps do not have to pay 30%, so they can easily replace any app with their own, if they choose to.

But that's a too simple way to look at it. I am not trying to defend the 30%, but just saying 'their own apps do not have to pay 30%, so they can easily replace any app with their own' doesn't go far enough. They got two options: a) make a 30% on $10/month from Spotify -> $3 in Apple's bag for no work or effort at all. Almost pure profit. b) sell their own music solution for $10/month (INSTEAD of that customer going to Spotify) and have to pay out X to musicians, companies, younameit. Higher hosting and streaming costs too. If X>$7/month Apple loses. If it's $7 Apple earns as much but no more than with option a), if it's less than $7/month only then Apple wins.

  $3 in Apple's bag for no work or effort at all

I agree with most of what you said, but come on. Running (one of?) the biggest software distribution and payment processing systems on the planet is hardly "no work or effort at all".

This is the same sort of rhetoric that calls dropbox a weekend project.

True that. I agree with you. I overstated.

There's credit card costs etc associated with that as well. Doubt it's $3/user per month though and the distribution costs are minimal (only downloads of app updates) compared to the streaming costs (which could be multiple GBs every month).

Apple: $ to build the app, $ to maintain the music label relationships, $ to manage paying royalties, $ to manage server infra, $ for bandwidth.

Spotify: $ to build the app, $ to maintain the music label relationships, $ to manage paying royalties, $ to manage server infra, $ for bandwidth, $ to Apple for the "privilege" of being listed on the App Store and using Apple's payments system (which they have no choice over).

Both companies have the exact same base costs to operate their service. But Apple gets to charge for subscriptions through the app for free, whereas Spotify does not. That's literally the only difference cost-wise, and IMO Spotify is correct to consider that anti-competitive. Whether or not Apple would make more or less money shuttering Apple Music and transferring all their customers to Spotify is completely irrelevant.

And no, I don't consider "creating and maintaining an iOS payments system" to be a part of Apple's costs here. That would exist even if Apple Music did not, and the marginal cost of having Apple Music use that system is virtually nil, certainly not 30% of Spotify's subscription fee.

From what you're saying it sounds like Spotify should have built a smartphone platform. It's not free for Apple to build and maintain the App Store and everything that entails—from API documentation to the rock solid software platform that is being kept up to date and is astonishingly robust compared to any internet-connected consumer platform that came before it.

Some apps pay for that effort with a cut of the app's retail price. Spotify pays for it with the tiny fraction of their users which (a) pay for it at all and (b) pay for it through their iOS device.

It's not free to build a platform, but I believe the cost has already been paid by the users when they buy their device.

No reason to have users pay twice, when they buy their device and when they try to use services on the device they already have.

The cost for the hardware platform is paid by the customer when they buy the phone.

The cost for the store platform is paid by the developers when they sell the app.

There is zero evidence that Apple does not pay the 30%.

We don't see the internal accounting but it's quite likely they do. Internal revenue distribution is standard practice in almost all enterprises.

There’s clearly a difference between moving money from one internal balance sheet to another, and moving it to an entirely different company’s balance sheet.

>> Internal revenue distribution is standard practice in almost all enterprises.

This is both true and generally irrelevant for business, except for the particular matter of taxation.

You couldn't be more wrong.

The issue I see is this, Apple Music does not play fair, it is similar priced with the competition but it is in fact subsidized by Apple, any application or service it is in danger because if Apple wants and it is competent it can create an Apple version of it and give itself smaller prices(or free), native integrations that the competition does not have. This is not fair for the users (it may be fair f5rom other POV but not for the users, fair competition is better look like IE as an example)

Apple Music is priced about the same AND they pay the artists more. Sorry but what's the scam?

Consumers pay the same price. Artists earn more. Who cares how Apple shuffles fictional numbers in their internal accounting?

The thing is obvious and I will explain it again, using a made up example so less emotions are attached

1 I have an app or service say X and I sell it for 5$ and this is the lowest price I can afford

2 Apple wants a 30% cut, so I will have to make my app 7$ .

all is fine so far, the problem is at step 3

3 Apple clones my app names it iX(my original app was named X), makes it 5$ (or bundles it with some gift cars or other deals if you give them more money).

4 Apple's iX gets access to private APIs, is cheaper(or free) since is subsidized, Apple also forces me not to remove from my X app any links to my webpages if I sell things there

Now, please, consider THE USER, what does the user get:

- the user gets less options if my app X is killed or I remove it from the store

- the user pays more if I raise the prices

- the user does not see m,y sale pages because I can't show it in the app

- the X app that some(a big number of ) users consider it better can't access native features like iX can

So, get 30% or whatever you want but compete fair.

With that idea, we should forbid grocers from charging less in-store for their brand name items that compete directly with mainstream brands (Safeway Select, WholeFoods 360, etc)

Can you comment on my point and not add an "What about x" ? My point is about the user, do I benefit is a supermarket makes it own products cheaper, Yes , but if it makes my preferred product more expensive to force me to buy the product they want, this does not benefit me,

again, tell me about what the benefit is for the user/consumer not what about x, the market shares, the laws in US, free market ....

The consumer gets an equivalent service for cheaper, that is like literally the definition of consumer benefit in economics. If you truly believe that X is better than iX than you can pay the extra money for X, but if iX is just as good and is cheaper than X the consumer benefits because they can spend less to get the same service.

This is wrong, because you get it cheaper because the better product price was inflated.

I get your point. I got your point the first time. But there are a lot of "ifs" in your hypothesis.

Meanwhile Apple is not attempting to undercut Spotify in the retail space. And they are paying artists substantially more than Spotify for the music so they're clearly not attempting to run a more profitable business.

There is no IF, all Apple apps have unfair advantages, not only financial but I also mentioned access to private APIs.

The user looses when there is not enough competition, like you get stuck with a worse browser (but in this case this may be a deliberate thing to protect the app store)

What has changed is Apple has a direct competitor product.

Firstly, that competitor product has technical advantages as it can access APIs that Spotify cannot (SiriKit, background audio on earlier versions of WatchOS).

Secondly, that competitor product is at a financial advantage because of the 30% fee.

It's not the fee itself that's the issue. It's that Apple is (arguably) using it's control of the platform to compete unfairly against Spotify.

> And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions.

Which you mandate Spotify uses. This isn't an enumerable benefit to Spotify, it is the lock-in mechanism that makes the Apple Tax work.