Spotify: Time to Play Fair
Spotify (Hacker News, MacRumors):
Apple requires that certain apps pay a 30% fee for use of their in-app purchase system (IAP) – as is their prerogative. However, the reality is that the rules are not applied evenly across the board. Does Uber pay it? No. Deliveroo? No.
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If we choose not to use IAP (the only payment option on iOS), Apple, in return, bars us from communicating directly with our customers who access Spotify via Apple platforms. Apple won’t let us share awesome deals and promotions — like 99c for three months of Spotify Premium. And we aren’t just talking about what we are allowed to do on the app. Worse yet, they don’t even let us email offers after you register your account, claiming we are circumventing their rules.
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But where Apple thinks that our app doesn’t abide by their unilaterally imposed restrictions, it routinely rejects bug fixes and app enhancements that would improve user experience and the app’s functionality – leading fans to believe our app and tech abilities are sub par.
For Spotify to use Apple’s billing system (IAP) — giving our fans the opportunity to upgrade to Premium — Spotify and others now have to pay 30% of any subscription fees. Apple now prohibits buttons or links to any other external ways to pay. This is the first of many moves from Apple that would make it harder and harder for our fans to upgrade to Premium[…] We elect not to use IAP for a bunch of reasons, including the fact that giving up 30% was too much for us to keep our prices low for our fans.
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Now that Apple has Apple Music, rejections of the Spotify app start becoming more and more common, and they even go as far as threatening to remove us from the App Store. Those rejections seem to coincide with our promotional campaign seasons[…] Now just having a “Learn More” button is enough to upset the Apple cart even though this is the first time we’ve heard of such a rule.
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This time, we are rejected because of a campaign that makes reference to a Spotify Premium promotion (“get 3 months now for €0.99”), despite only directing users to a landing page with no info on where or how to purchase Premium (which Apple had allowed only a few months prior). In fact, Apple’s chief lawyer told us a year earlier that such a landing page was OK, but that didn’t stop the App Store from blocking our app for this reason
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Apple Music sends the very type of promotional push notifications that it forbids its rivals to send
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So we announce two podcast acquisitions we are super excited about, and all of a sudden Apple arbitrarily decides to prohibit use of its API to recommend podcasts to users
I personally believe Spotify is right here, and that it’s time for Apple to open up their platform more and lower their App Store cut.
Think about it this way: is what’s good for Apple also good for consumers in 2019?
Take Spotify’s complaints and timeline with a grain of salt.
It’s really just three things:
- Apple’s 30% cut is high
- The rules around it are anticompetitive
- Spotify gets rejected a lot for trying to evade themEverything else is a bit bullshitty.
Many of Spotify’s complaints are ascribing malice to limitations of young products.
Any developer, Watch or HomePod owner, or Siri user can tell you that Spotify wasn’t the reason Watch podcast apps sucked before watchOS 5 or that SiriKit and HomePod have no audio intents yet.
There’s no Spotify for HomePod, but you can run it on a Mac SE/30.
Apple did the same thing to Kindle for iPhone back when it launched.
We submitted the original version to Apple with a fully functioning store built into it—and were then stuck in submission limbo. Two weeks later, Apple announces their intent to build in-app purchasing.
The kicker: Apple wanted a 30% cut of every book sold on the store …and at the same time, had negotiated with book publishers that the publishers MUST sell all books at a 30% margin on ALL stores if they want to sell their books via Apple’s own ebook store. Aka we couldn’t sell books at an increased cost, even if we wanted to. We would have had to take a loss on every purchase.
In the end, we had to remove all of the store functionality from the app, and weren’t even allowed to link people directly to the web store for purchasing (or even instructions for purchasing).
Previously:
- Spotify’s Podcast Aggregation Play
- Netflix No Longer Offering In-App Subscriptions
- Basecamp App Rejected for Including Help Link
- Apple and Google Face Growing Revolt Over App Store “Tax”
- Apple Wants 30% of Tips From Chinese Chat Apps
- Purchasing From the Kindle App
- More Push Notification Spam From Apple
- Taylor Swift vs. Apple Music
- iBookstore Rejects Book for Linking to Amazon
- App Store Subscriptions, Revised
- The Apple Strategy Tax
- App Store Subscriptions
- In-App Purchase and Rent-Seeking
Update (2019-03-15): Peter N Lewis:
Forcing developers to use IAP, and forcing people not to offer a non-IAP purchase, is not a limitation, it is a deliberate financial move available to Apple only because of the lock-in on the iPhone App Store.
My $0.02: this will never happen unless something causes captive users to start switching away from Apple in significant numbers (highly unlikely) or there’s government intervention. If you see a third way out of this please let me know.
See company politics in action:
1) Use your iPhone to google a book
2) Tap on the Amazon link
3) Amazon properly deep links and opens its app
4) Amazon app: “Oh wait, if we sold a book now, Apple wants its cut, noooope, not with us”
5) Amazon app opens Safari again
6) Tadaaa 🎉
See the results of Apple’s greed and anti-competitive behavior in action.
Using the full featured Kindle, Audible, and Comixology apps on Android is such a revelation that I could never consider returning to such a crippled and user hostile platform.
I do see repurcussions with allowing apps to be installed outside of the App Store though. Apple would have to put a lot of effort into making the App Store a really attractive option for selling and promoting apps, otherwise someone else would do it.
Spotify CEO Daniel Ek elaborated on his company’s complaint against Apple with the European Commission in a speech today at the International Conference on Competition in Berlin, according to Variety and The Hollywood Reporter.
See also: Core Intuition and Apple Responds to Spotify.
10 Comments RSS · Twitter
While I have no sympathy for Spotify as a company, I do not understand why anyone who uses an iPhone or writes apps for the iPhone wouldn't be 100% on their side here. Spotify's intentions don't matter, what matters is that Apple's behavior is needlessly hurting iPhone users and devs.
And I'd give a lot more consideration to the "these are just young products" argument if Apple's older products were fundamentally better, but it seems to me that the opposite is happening: the Mac, at least, seems to be getting *more* developer-hostile, not less. If Apple wants us to assume good faith on their part, they should give some evidence for it.
It's becoming increasingly clear that Apple's walled garden is not capable of protecting iOS users from malware, spyware, or scam apps. Thus it seems to me the main reason for its continued existence is as leverage for Apple to use against its competitors in services and software, and the extraction of economic rent from the millions of transactions that take place via this platform.
Are we gazing into a future where the only way to survive as an app-based service provider is to either: be a big enough company to survive while circumventing Apple's restrictions (e.g. Amazon, Netflix), or be so socially indispensable that the rules don't apply to you at all (e.g. Facebook, Uber)?
It's sort of depressing to think about this. IMO, the way forward is not for Apple to reduce its tax rate to 15% or 10% or something, but to allow other app stores that free to implement whatever rules they choose.
Apple would have *some* ground to stand on if Apple Music didn't suck so much. But here we are, years after the launch of Apple Music and it still blows. To be fair, I think all of the streaming music services are terrible given how long they've all had to bring some real innovation to the music listening space... but Spotify sucks the least (and they have an API which helps) and Apple Music hasn't even begun to live up to the hype -- it's been nearly 4 years and I can't really name a single thing that they've improved except to remove the Connect "social network" from it. Music discovery still blows. "Listen to any song whenever you want" is not a selling point anymore.
I simply cannot believe it is 2019 and we are still discussing problems that started magnifying with the iPad/iBooks launch in 2010!!!! The 30% in app cut on digital media and the obsession with preventing linking from within app started with stupid iBooks! Price fixing scandal? Yeah, thanks iBooks! I was less than thrilled back in 2010/2011 as the policies started changing and I'm simply flabbergasted anyone could form a defense of Apple's position in 2019. Well, a defense that doesn't begin with, "Apple is a publicly traded, multinational company who's sole goal is to extract increasing amounts of income from its captured, single sourcing customers." Good gracious.
