This is a surprisingly open response to what is likely to be a legal matter, particularly given Apple's usual silence on... most everything.
I definitely take issue with it's avoidance of the core issues though: That the services they provide aren't optional on the iPhone. They make it sound like connecting Spotify to users, and allowing them to use their in-app purchase mechanism is a service they offer that they should be paid for. But the reality is, that Spotify has no choice but to use that service, which is the definition of a monopoly.
In that, I feel they didn't meaningful counter Spotify's primary anticompetition claim, and I look forward to seeing what the EU makes of it.
I think Apple is going to find itself standing alone by the time the dust settles on this issue. Their 30% tax is a disservice to its own customers, not just app publishers.
Apple tries to counter that the problem is Spotify. It's Spotify that is money-hungry, Apple claims:
Underneath the rhetoric, Spotify’s aim is to make more money off others’ work.
The only problem with this argument is that Spotify is just one example. App publishers of all sizes have expressed grave dissatisfaction over this issue. Ultimately, this has led to a poorer experience for Apple's own customers in the form of higher fees for in-app purchases or weird, convoluted checkout flow that requires you to goto your browser to finish a transaction.
Apple won't find itself standing alone. Other major distributors like Google and Valve are both happy to take 30% off the top of app sales too, and if the chance comes to speak up in support, they will. But the difference is both of them can be circumvented by competitors, for instance Epic Games, who is challenging both. (Epic is launching an Android store soon.) Apple can't be, and that's likely to be the crux of any action against them.
I currently subscribe to Spotify, use the iOS Spotify App, and do not make payments through in-app payments nor do I pay the 30% Apple tax. So it is circumventable, and Spotify is just "optimizing" their revenues here. So at least compared to Steam, Apple's platform is actually more open since you aren't required to pay through Apple's platform. Though I'm not sure on the current requirements for in-app purchases, so correct me if I'm wrong.
Discussion or capture of money must go through apple. The hinting of circumventing has to be really vague And creates a weird ux. IMO you have to follow the rules and pay the toll
As far as I know you can't do that on iOS. There's also nothing stopping the devs from selling IAP themselves on their own website. So no, Steam is much much more open than Apple's App store. Not to mention the fact that Steam is completely optional and the App store is not.
Yup. Another prominent example is Amazon’s inability to sell books in the Kindle application on iOS, which has the same anticompetitive undertones given that Apple sells ebooks to users of its platform.
But, at the very least, Amazon doesn’t prevent you from reading ebooks from outside their store on a kindle. They just don’t favilate their discovery. (Unless things changed since I last owned a kindle which was quite a while ago)
That's not a good comparison. An iOS device is not like a book shop. The iBooks application is. Nobody's asking that you can buy Kindle books in iBooks, but you can't even buy Kindle books in the Kindle app because Apple would demand 30% of the book. If you open the Kindle app on Windows you can buy books in there and Microsoft doesn't take a cut of the sale. People would lose their mind over this. Why is Apple different?
Let's not forget that you can't buy Kindle books on iOS because of this policy. Apple wants 30% of the cost of every book, which would kill Amazon's margin. (Of course, this is just businesses fighting over the lion's share of the money; the publisher is only going to give the author ten cents on the dollar in royalties anyway.) But Apple will happily sell you books in their store, which smells like anticompetitive behavior.
Steam Link faces a similar issue. Apple, apparently, considers buying desktop games through an app that can remotely play them on your phone to be the same situation, and demand that payments go through them.
My bet is they decided to respond due to PR issues. The response from the EU will likely depend to some degree on the public reception of Apple. The Spotify post looked very strong, so even if they don't fully dismantle it (as you noticed they dodge some issues) they provide enough arguments that it isn't immediately clear to bystander who is right.
From my understanding, Spotify is arguing that it should be void of platform/processing fees for in-app payments, potentially zeroing fees for everyone... That's a hard argument to make, because if they win that, then Stripe wouldn't be able to charge processing fees either. You'd get into an argument of what fees would be fair, and in-app payments are not a requirement for the app store so it's hard to argue it.
I think the most likely scenario is that Apple will capitulate and remove any restrictions from apps soliciting payments in a web browser from within the app (are there any restrictions on this?).
Yes, currently Apple prohibits developers from linking to their websites subscription signup. I agree if Apple provides payment processing, they should get some cut (though not 30%). The issue is that Apple prohibits signing people up from anything but their IAP feature.
I think the % for processing/platform is justifiable and hard to argue against setting that % for them. The most likely outcome is that they will either remove the restriction from advertising alternative payment methods on signup, and in exchange Apple can do what it wants with in-app payments.
I agree that the best case is that Apple sets the price it does business at, but that there are reasonable ways for the app to use a different payment provider, even if just by linking to the web. This keeps Apple's price in check naturally... As they'll need to keep the price competitive enough that the convenience of using their service is worth it.
I can also see the argument that for users that discover an app through the App store, they must pay the platform/acquisition costs. But I agree a lifetime 15% is unfair.
Best case scenario is
1) Apple switches their platform monetization to a more direct model where you pay to advertise your app in the App store. This will get tricky because their "Top apps" list still serve as advertising but you can't just remove an app from there because it refuses to pay.
2) Apple removes the restrictions against advertising alternative payment/subscription methods
Perhaps one reason people buy iphones, is because you can't install from outside sources. It's part of the feeling of trust in iPhone. If you get a subscription in-app, you can easily cancel it on your phone, without having to worry about going through some kind of retention hell (call to cancel, dark ux patterns to prevent cancellation, etc...) As well as level of security in that it's one less company with my credit card to worry about being leaked/hacked/whatever.
I'm talking about the merchant fees, not the interest rate for cardholders. The cardholder interest rate is not at all analogous to Apple's revenue share.
Apple is charging for the reach accessible by participating in their platform, it's effectively a distribution and marketing cost not a payment processing cost. The no linking requirement is so you don't use the accessibility enabled by their platform to bypass their fees. So if Spotify wants to bypass the App Store's subscription fees they'll need to find another way to notify and acquire new Customers, i.e. outside the App Store via their website or general advertising/marketing.
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 and that means you can’t engage in a practice like linking to an outside signup page that is solely for the purpose of circumventing the fees you rightly owe for use of the distribution channel.
Nobody has to distribute your app for free. You don’t like the prices Apple charges for it? Go to Android, or make your own distribution channel, whatever.
Spotify is free to not participate if they don’t like the pricing.
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 forces them to use Apple's distribution channel, which comes with a hefty price tag.
So if they want to distribute their free app on the iPhone, they are welcome to do so, as long as they don't mention that people have to go to their website to sign up for the premium service.
We can still argue about whether Apple is allowed to behave this way, but at least we'll be arguing about the right thing.
The only thing anyone is talking about is the price of app distribution. That price includes obeying the terms of Apple’s distribution channel.
> “Spotify already has their own distribution channel (sign up on their website)”
Yes, and if they don’t like the prices for oveying the rules of Apple’s distribution channel, they are free to remove the app from Apple’s app store, and notify customers that they cannot use the service on iOS devices.
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.
Apple does not have a monopoly on Smart Phones or App Stores. They're able to as much as anyone to control how their platform is used - there's no law against maintaining a closed and curated platform and your product or platform is not considered a Market in by itself.
There's also no law against having a monopoly, only for abusing your monopoly in one market to gain an unfair advantage in a different one.
iOS isn't considered to be a market so they don't have one to abuse. Unless the courts declare that iOS is a market then the App Store would be considered to have a monopoly on App Stores in iOS, but you can't have a monopoly on your own product/platform (then everyone would be a monopolist). A monopoly is measured against the overall market. If Android didn't have an App Store or it was the size of Windows App Store then iOS App Store could be considered a monopoly, but not at the fraction of the user base that iOS has now.
It doesn't matter in this case because iOS isn't a Market and the iOS App Store doesn't have a monopoly on App Stores. They can appeal to the public about the unfairness of it all (which is likely what their open letter was designed for) but they don't have a legal case against Apple nor an inalienable right to be able to participate in their platform on their own terms.
If so, McDonalds is abusing its power even more. They don’t even let me sell my burgers in their stores.
Similarly, it wouldn’t surprise me if music festivals or cinemas charge suppliers selling on their grounds more than 30% of revenues.
I know app stores feel different, but as far as I know, that legally still is a reasonably apt comparison. That may eventually change, but if so, someone will have to specify what exactly the difference is. I’m not sure that is as simple as “physical vs digital”.
App stores feel different because they are different. You seem to have an incorrect definition of what a market is
McDonalds is not a market, McDonalds is a vendor in a Market.
Apples has a created a market on is the platform by virtue of the App Store, a case can be made for Anti-Trust due to to this, but it would be a hard one.
Defining what is and is not a market is always one of the largest challenges for Anti-Trust, take for example the Merger of Sirus and XM, there was a debate over if Sat Radio was a market separate and independent of Traditional Radio, in the end Sirus / XM won and was able to establish that Sat Radio was not an independent market because consumer could easily switch between Sat Radio and Traditional Radio
Given the Lockin, and increasing Costs associated with Changing Mobile Platforms it becomes more of a question on if iOS and Andriod should be separate markets or be considered a single market. I can see cases for both
I am not familiar with the legal history you cite but it is intriguing. Are there other antitrust cases that hinged on whether or not two things were their own markets or part of a larger one?
Yes there is. It's called anti-trust law and a large part is about pure market share.
It's also illegal to use your monopoly in a market to get advantages in that market. Most notably, you can't use your monopoly to keep your monopoly. (I.e. intel making a deal with dell where dell cannot use AMD processors)
No, it's still not illegal to have a Monopoly. The FTC can block mergers that can create them if they believe it will harm consumers, e.g. through higher prices caused by less competition, but they typically won't block them if they think consumers will benefit through operational efficiencies gained by consolidation.
Monopoly regulations are enforced inconsistently across time according to political whims. There’re going to be plenty of counter examples to go around.
Monopolies and oligopolies are inefficient. Whether legal or not they result in in detrimental outcomes.
Walmart tells a manufacturer they have to pay a special Walmart surcharge every time a sale is made, and that they can't raise their prices only at Walmart (or give discounts at other stores) to make up for the difference.
And, in addition, after the sale is made, if the product allows the customer to buy add-ons after they bring the product home, the customer is required to go back to Walmart to purchase that add-on, and another Walmart surcharge is assessed; the manufacturer isn't allowed to sell add-ons directly to the customer without Walmart acting as middleman.
Like Walmart has a monopoly on shelf space at walmart.
Apple does not have a monopoly on neither Phones nor on application markets for phones. They have a very attractive market, which they control, but not a monopoly.
You know, it's a funny thing, how to define anticompetitive and monopoly practices, depending on how you frame the scope of the market. See Peter Thiel's book for a chapter on this.
You could say that Apple has a monopoly over developers building apps and providing their services to people using iPhones. But is that the scope that is under regulation, or what constitutes the "marketplace"?
Someone else looking at it could say that Spotify has a multitude of ways to provide its content to customers -- web, it's own Windows + Mac desktop apps, Android, etc. Would you claim that that is lacking competition?
To be fair Apple capitulated and reduced it to 15% for after the first year, and leave a lot of money on the table from freemium/ad-supported apps.
I'm honestly not sure what the big deal is. You can subscribe outside of the App store (by not using in-app payments) and not pay that extra $$, and Apple doesn't get that extra $$.
> I'm honestly not sure what the big deal is. You can subscribe outside of the App store (by not using in-app payments) and not pay that extra $$, and Apple doesn't get that extra $$.
It seems that Spotify claims that even making that information known on the app gets their app rejected. They have mentioned that Apple rejected their app because of the word 'Free' being used, as well as 'promotions' being used inside the app, and there is no way to link to external payment options.
Enabling payments via the App Store is helpful, denying other forms of payments seems leaning towards being anti-competitve.
Ok, it's hard to tell because both sides are over-extending and exaggerating the issues.
Asking Apple to change the 30% fee to 0, or some other arbitrary number is untenable.
Blocking Apps from advertising that you can subscribe on their website outside of the Apple platform is weakly tenable. I can see the argument and reasoning that Apps should pay for "advertising" for the service through the Apple platform, but in reality "discovery" through the Apple platform is limited and in Spotify's case most people probably do not discover it through the platform. That being said, I can see the argument that
1) If Spotify users discover them through the App store, they would not know about subscribing directly through Spotify for a lower rate. Therefore Spotify should pay the 30% as user acquisition cost.
2) If Spotify users come to the App store from Spotify, they should already have signed up outside or know about the lower rate outside of the Apple platform.
It seems to me the main reason why Spotify is against the 30% tax (aside from generally wanting to not pay), is that
1) Spotify wants to be able to upgrade free users to paid users in-app with the least amount of friction. They can do this by email, or through the App, but obviously it's much easier to do so through an in-app popup. I've had countless friends that have accidentally subscribed to in-app subscriptions so I know how easy it is to subscribe.
2) Spotify does not want to pay the lifetime 30%/15% tax on customers acquired through the App store.
What you are missing is that Apple is selling their own music streaming subscription for 30% less while making it impossible for Spotify to advertise their subscription in the app.
There are many other ways to compete on rather than just pricing. That 30% less can be recovered by having exclusive artists, a better product, and a stronger presence on other platforms.
I don't see how having exclusive artists (or even content) encourages bad competition. These are artists/content that potentially wouldn't have existed without Spotify's investment.
A stronger presence on other platforms would enable Spotify to make more revenue from those users vs. what Apple could siphon. Apple's main focus is on iOS. Furthermore, Apple Music's association with Apple probably hurts its image on other platforms like Android, giving Spotify an edge.
What I'm inferring is that Spotify can easily make up that 30% loss to Apple with other tactics just by differentiating.
Well, those ads were honestly better. They were localized both in their scope and what they claimed to do. Nowadays, every tech company is changing the world, and there is much hullabaloo over everything under the sun when it's just shitty software at the end of the day. Take the opening sentence: "We believe that technology achieves its true potential when we infuse it with human creativity and ingenuity". Who gets paid to write this drivel ?
Spin doctors who can turn around faster than you can say "what?!". Probably high earners, too, given that they could cost their companies dearly with a single single wrong word.
> Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.
I think that's a very hypothetical claim.
> Let’s be clear about what that means. Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.
I think we should be clear that Apple built the app-store ecosystem to improve its iPhone adoption and lock-in. And Spotify isn't asking to keep 100% of the revenue. Spotify is asking for a choice of letting users pay how they wish.
The problem really is Apple wants to milk its App store ecosystem now that its popular and 30% / 15% is a very steep price / revenue loss for any significant player in that eco-system. And FWIW, Google provides a similar App store service, while also allowing users to what they choose with their phones (i.e., install side-loaded Apps).
> 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.
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 :(
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.
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.
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.
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.
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.
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.
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)
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.
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.
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.
> 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.
> 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.
Nothing stops you from implementing a secure payment system, installing it on devices bought by millions of wealthy consumers, making them trust you with their credit cards and... charging less.
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.
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.
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.
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.
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.
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.
> 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 of exploited artists is pretty disingenuous.
I think they may be specifically referring to the most recent royalties hike that was opposed by Amazon, Spotify, but supported by Apple. Was most likely a PR move to make Apple look like a supporter of artists.
According to this infographic (linked below), it seems like Apple Music does give more average revenue per play than Spotify, $0.0060 for vs $0.0044. But in general, Apple Music isn’t _that_ much better than the rest where paying artists goes. It lags far below tidal, for example, which doles out $0.0125 per play on average.
Holy cow. So you have to play a song 227 times for the artist to make a dollar off the song? Any idea what it's like for just buying the song on Amazon?
It’s actually more plays than that because Spotify also takes 30% of each stream payout, so it’s odd they would also complain about a 30% mechanical.
The premium accounts payout more per stream than freemium accounts.
This is also assuming the artist owns the master recording outright, wrote the entire song, and administers their own publishing and mechanical royalties. The latter being almost impossible.
More than likely if signed to a label, they will get 10% of sales, the label will get the rest. This is based on traditional album deals where you get 1 point per song. If they are also published, the publisher takes half of their performance royalties, a mere 6-7 percent of stream payout. Also the PRO(ASCAP, BMI, etc) recieves half of the mechanicals, another measly 6-7 percent. To be clear if you don’t speak music payment terms. The people that own the publishing AKA the people that actually write the song, and administer that published writing only get 12-16% per stream payout(not fair). When labels receive around 48%-58% per stream payout, this is for a specialized business loan that pays for the recording + marketing and distribution(way too much). Not to mention this loan has to be totally recouped before the artist sees any of that 10 percent, if they ever do.
To sell anything on Amazon, you are charged $40/month for a professional account, or they have an under 40 item plan with a listing fee of $.99 per item. An additional 15% is taken by them on music sales. So if you have less than 40 songs you pay $.99 a month to list them each.
Tidal's model is supposedly more literally like the proverbial "pie", where the most popular artists get the biggest cut. So if it's true that they inflate numbers for Jay Z and Beyonce, then other artists are being deprived of revenue.
It's a big problem that artists don't care. Artists are the ones who know the actual deals they have with publishers/labels.
So instead of demanding their fair share from the labels, they go after streaming services who don't even pay them directly: all money goes through labels.
> Spotify’s aim is to make more money off others’ work
Moreover, that's the pot calling the kettle black. That's the app store in a nutshell -- Apple supplies the marketplace, but is also making a substantial chunk of money off of others’ work.
Spotify build distribution, recommendation infrastructure,and more. They are far more than a warehouse middleman which adds no additional value beyond providing a retail outlet.
A car dealership is a middleman. A auto manufacturer is a platform. The car dealership sits between you and the manufacturer, making it easier for you to buy the car, but taking a cut. But you don't need the dealership in order to use your car. Spotify makes it easier for you to find music, but once you've found music, you don't need Spotify anymore (not a perfect analogy since you need to pay to purchase the music from a real store if you're ditching Spotify, but close enough). The auto manufacturer actually builds the car, supplies the replacement parts and manuals for repair, provides software updates for the car's computerized systems, manages any kind of in-car network GPS systems, etc. This is Apple. They develop the whole OS, including all the frameworks that developers actually use to build their apps (and the developer tools too, for that matter), they keep it updated, adding new features and fixing bugs. Apple provides ongoing value to both the user and the developer over the entire lifetime of the app.
It runs on all the platforms I want it to run, including on Linux or on my Playstation, you can easily switch devices, picking up where you left off, you can remotely control devices, etc. The suggestions engine isn't spectacular, but works. I also like to see what my friends listen to. They also have the best integrations with other apps.
The music selection could use some improvement but it's much better than Apple's Music and getting better every month.
You’re saying you get value out of Spotify’s services. That’s good. Middlemen exist because they’re providing some value. Doesn’t make them not middlemen though.
Ultimately, if I use Spotify to discover an artist, I’m going to continue paying Spotify to listen to that artist and the artist themselves will be lucky to even make pennies off of that. I could move off Spotify and keep listening to that artist pretty easily, I just probably won’t. Spotify is a middleman focused on discovery but isn’t providing ongoing value to the artist once the viewer has discovered them.
Apple on the other hand is building and maintaining the platform that app creators use. This is a lot more tha discovery, the app wouldn’t even exist without the platform, and Apple keeps adding more value to the platform over time. Apple is not a middleman.
Spotify would and does exist on all the other platforms, like Android, Windows or the open web.
Apple created a lot of value with its first iPhone, but the world evolved since then.
And yes, in your definition, Apple too is a middleman, because a big reason for why many people buy overpriced smartphones is to use apps. That you can't move those purchases easily to another platform, that's the lock-in effect of Apple's walled garden, but that doesn't make them any less of a middleman.
Speaking of pennies, I emphasize, but how much are artists getting paid by Apple Music? Isn't this hypocrisy on their part? This whole thing is infuriating because Apple can easily undercut its competition because they don't have to pay the 30% store tax.
This is anti-competitive behavior and yes, I realize that Apple does not have a monopoly, but I think anti-trust laws should be rewritten, because this kind of behavior isn't acceptable coming from the world's richest software company, due to the infinite potential they have for harming the market.
> That you can't move those purchases easily to another platform
You do realise that there are technical reasons for that.
You can't just lift an iOS, Linux, Windows, Android, PS4, Xbox etc app and just run it on a different platform. Especially if your target platform is a resource constrained one.
Linux apps are easily ported to other platforms and this is because the Linux kernel has an easy to port interface and all the GUI toolkits, along with the X Window subsystem are open source and have been ported already.
For example I use Gimp and Inkscape, irregardless of the OS. The experience is a little shitty on MacOS, but they get the job done.
It's also the reason for why Microsoft was able to provide the "Subsystem for Linux" on Windows 10, because the Linux kernel is much easier to mock than Windows is, being a much smaller effort than what the Wine project has to handle. Speaking of Wine, it has been doing a decent job of running Windows apps on Linux, many Windows-only games are playable on Linux due to it. And Steam has been using Wine to make games available on Linux.
iOS on the other hand is another matter entirely. First of all you don't have direct access to the binaries, without hacking the OS and Apple is doing everything they can to make that OS unhackable.
No, we are not talking of technical limitations, as those aren't insurmountable.
Indeed, however there is no technical reason why devices couldn’t be built so apps could be lift and shifted verbatim. We already have examples of cross platform frameworks that can target desktops as well as mobile devices. We have an understanding of how to reflow our content for different screen sizes, orientations, aspect ratios, and even (albeit less successfully) DPI. We also have platforms were code has to support different horsepower (eg games written for the Nintendo Switch between docked and undocked mode). So we understand the theory and I’m sure most developers would welcome such a change too. But there is absolutely no incentive for hardware manufacturers to do this (and I can’t blame them either).
To be honest though, I’m less concerned about app portability as I am about retaining ownership of apps after their or the app stores support has ended. While this doesn’t really matter for mobile apps nor music streaming services, it’s something that really concern me with regards to collecting retro games. There is a lot to be said for owning physical media. But I’ve digressed.
That definition of a middleman is pretty useless. According to you Apple is a middle-man because they just provide access to apps and web pages which you really want to use. Google search is a middle man because you just use them to access websites you really care about. Walmart is a middle man because they only connect the producers of consumer goods to consumers.
Everything ultimately leans on suppliers so if that's your definition everything is a middle man unless you farm crops or dig up ore or something.
I'm confused as to what it is that Apple Music does that Spotify doesnt? You say that Spotify is a middleman but never once comment that Apple Music is also by your own definition a middle man.
Also the title Middle Man has a sort of negative conotation to it. But Spotify/Apple Music is simply a platform that can connect a artist to a listener. But this doesnt make them any more of a middleman then Netflix or the guy at Mcdonalds who cooks your Cheeseburger.
What an incredibly silly comment. Serving music to millions of people across all major platforms whilst also being kosher/legal are real multifaceted challenges. This is one of the reason why you don't see much competition in this space. Remember Grooveshark? That was closer to a "middle man" than Spotify, and they promptly got sued and got shutdown.
I agree that 30% is egregious oligopoly pricing, but 1% is definitely insufficient to run a payment service and a software distribution platform that includes any sort of fraud prevention and support.
In 2018 (edit: 2017) they made roughly $11.5 billion[1] with their 30% cut.
1% instead would be $383 million a year. You think that wouldn't be sufficient to run a digital store (including the things mentioned)? Pretty sure you can do it with far less than that.
No, I really don't think it would be sufficient to run a payment service that includes billing, international VAT processing, chargebacks, customer support, fighting fraud, plus providing an entire software development, distribution and vetting platform.
Mobile platforms are dysfunctional markets. That's why they can charge 30% and that's why regulators will step in sooner or later.
But take a look around and you will find that there is no digital shop that acts as a merchant of record internationally for anywhere close to 1%. It's impossible and completely unrealistic even before accounting for the entire software development and distribution side.
Software development is completely unrelated: of course Apple needs to provide software so developers can build apps so consumers have a reason to buy an iPhone in the first place. That has little to do with a marketplace.
They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. If you want your app to be available on the iPhone you have to go through the App Store. There is simply no other way (for a native app), as such you either give in 30% or you don't create an iPhone app.
>They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain.
I agree with that. 30% is not a plausible rate in a well functioning market. But it's not 1% either, I can guarantee you that. So what is the right revenue share?
Paddle charges 5% to act as a merchant of record for you (i.e as a reseller). That's what Apple does as well and I haven't seen that service offered for much less.
On top of that, Apple provides all the software distribution and discovery functionality. I'm not sure what the cost of that is, but it's not nothing.
So by my estimate, a realistic revenue share for Apple in a well functioning market could be in a range between 8% and 15%. But on the lower end that might mean higher fixed fees for free apps and worse support.
What they should do first of all is change the pricing structure to charge a fixed fee plus a percentage. That would allow them to cover their per transaction cost and take a far more realistic revenue cut on top of that.
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 destroying greed again and again. They are killing their own golden goose.
"I wonder why companies are getting carried away with this kind of profit destroying greed again and again. They are killing their own golden goose. "
Could simply be that they dont know what the world will look like in 5 years so they might as well cash out while they can. No use playing the long game when the next big game changer could be around the corner?
Maybe not Google. But I would be a little shocked to find that Apple at least doesnt think that way to a degree. I mean... Look what the Ipod did. The Ipod was a game changer.
> 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 talk about “greed,” I tune out because that’s the sign of a person who doesn’t actually know what goes into running the thing they claim a company is greedy with. Take the Apple 30% fee for example. If you ran payment processing yourself through Stripe, you might pay 3%. So let’s take Apple’s remainder to 27%. Apple handles chargebacks/disputes for you. So each dispute using Stripe would cost you $15 unless you win the dispute. We also have fraud prevention and management, which Apple provides. An app developer never has to deal with fraud on the App Store. An fraud is a significant issue, especially selling globally.[1] How much is fraud worth? I would say that it’s worth at least 5% to never have to deal with it. So now the App Store commission is 23%.
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%. You can’t have any downtime or you lose money. You can’t have casual security or you’ll lose product. So that system has to be well maintained, robust, and able to handle scale, and be fast and easy for your customer.
Now we are at 18% of Apple’s commission remaining. For every product you sell worldwide, you have tax consequences worldwide, assuming you care about following the law. For every sale you get, you potentially have to remit taxes, taxes that vary by individual jurisdiction. Apple does all of that for you. They also provide a localized and internationalized store front for almost any country in the world. Want to sell your App in Vietnam? Is your infrastructure set up to reach those customers? How about your Vietnamese skills when a potential customer has a purchasing issue? How about your payment processor? Are they set up to handle how Vietnamese people like to pay for things? Can a Vietnamese person go buy a gift card and use it on their device to buy your product? With the App Store, you get all of that capability built-in. And you get that capability for pretty much every connected country. Including market exposure via App Store search and discovery. Let’s combine this point with the next, a product website. If you want to sell on your own you have to build and maintain a website to sell your app. You need to integrate payment processing, the download, security, and maintain it. While most of us have the skills to do that, you also have to ensure it’s updated, you have to pay to host it, translate it into worldwide languages (or not.) However if you actually want to sell your app, you’ll also need to worry about SEO, online marketing and attracting users to your app. Just a simple webpage isn’t going to make a dent in search results from the open web since your “premium music player” keyword will take years to rank.
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%.
So that leaves our “greed percentage” at 10%. However, we have another aspect as well. Not only do you sell a paid version, you also have a free version you use as a marketing tool to expose people to ho...
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.
I have made some of the exact same points in another thread hours ago where someone claimed that Apple could easily run the App Store for a 1% commission: https://news.ycombinator.com/item?id=19398315
So I am fully aware of everything you're saying and I agree with most of it in principle. I do disagree on the numbers you're using. But we are both inevitably ill-informed in the sense that neither of us has the hard numbers required to work out the true cost of running the App Store.
We do know a couple of things though:
1) The App Store is profitable. Apple has said so. Most analysts reckon that it has high and growing margins. Everything Apple says about its services business makes me believe that these analysts are correct.
2) There are only two relevant mobile app stores (perhaps 2 1/2 if you count Amazon).
3) Both charge exactly 30%
This is not a well functioning market by any definition. Dysfunctional markets like these rarely charge too little. So the assumption that they charge too much seems not too far fetched.
To me, charging 30% for every app, irrespective of its price, seems completely implausible, not just the percentage but also the structure. Any plausible pricing structure would include a fixed fee plus a percentage.
I'm not using the word "greed" in a moral sense (as is often the case). I'm using it because it is clearly an act of self harm to extract high margins in an obviously oligopolistic and dysfunctional market.
They are begging to be regulated and why would they do such a stupid thing?
The lack of choice is a problem. I’d support a law that mandated that all Turing-complete machines allow its owner to execute whatever code he wants on it, and therefore that iOS devices allow third-party apps (and third-party app stores) to be installed.
You can signup for a Developer account and then execute whatever code you like on the device.
You just don't have a right to distribute that code to others. And that's one of the reasons why many of us like iOS since I can almost guarantee I won't have malware, viruses etc.
Apple is not "actively trying to prevent" people from managing their Spotify, Netflix et al subscriptions outside of their respective iOS apps, what are you talking about?
The app literally can't send you to the Web page so you can sign up there. It has to say something vague for Apple to approve it for publishing. Here's an example from Kobo [1]. They apparently can't even tell you the domain name.
But just like my TV and my desktop computer, I've paid for my phone with cash. Its mine. Just like my PC, I don't owe Apple Computers any extra money in exchange for the privilege to install apps like spotify on my device. The benefit of having access to the app store is already factored into the (quite high) price I paid for my phone.
True, but a counter argument could be that Apple has created the ability of your phone to have apps installed on it. And I’m theory you could jailbreak your phone and install any app you’d want.
Sure; but I paid $1000 for my phone in part because of that capability. My phone would be worth less if I couldn't install apps like spotify. And unlike a game console, app purchases aren't used to subsidise the phones. Its pure profit for apple.
And I wouldn't have a problem with that in general, except it feels dirty to claim Apple are saints for graciously allowing apps like spotify to be sold on their platform. They're already being paid for doing so through phone sales. Leveraging the monopoly they hold over the ios app store against Spotify, one of their competitors, is exactly what antitrust legislation is designed to prevent.
And if you can find a way to defeat it's security, you are free to do so. However being incredibly locked down and secure is one the the product's features. It's up to you if you still want the product, but that's how it comes.
its about payment not app store lock in. there is nothing wrong with paying by browser and not via the appstore besides convenience. your car does come with a 'buy new tires' button but you can still go to the store and pay with cash.
Apple has ~15% market share (fluctuating) so it's not really a monopoly situation. Google will give you access to the exact same Spotify service.
Whether what Apple is doing is legal or not I guess the courts will decide. But it's certainly factually incorrect to imply that you're not free to buy from anywhere else.
EDIT: comments have made clear that Windows had a monopoly on the personal computer space, whereas Apple doesn't have a monopoly on the smartphone or tablet space.
Although I don't disagree, the difference was that Microsoft had a monopoly on computing. Not just on PC but take computing as a whole and microsoft was hugely dominant. From a legal standpoint there is a huge difference.
Desktop computing -- in the 90s in the server area there was more competition, primarily from Netware.
It wasn't until the end of the 90s when macs started making an impression on peoples desktops, with the imac, but oddly enough if https://en.wikipedia.org/wiki/Usage_share_of_desktop_operati... is to be believed, windows still has a 95% share of the desktop/laptop market.
I believe it because Windows comes on all kinds of devices and supports all kinds of hardware mixes and SKUs. It effectively encompasses the entire price range in a way that Apple doesn't care to.
MS had a monopoly in the personal computer industry. Apple does not have one in the mobile industry. By this logic Mercedes has a monopoly on all Mercedes cars but they're clearly not one in the auto industry. If Mercedes ever decides to ban or squeeze a supplier, monopoly will not be the argument to nail them.
I'm not saying Apple is right to do this. I'm saying the monopoly on their own product is not the correct argument. Apple is not a monopoly. If they lose this case it won't be based on this.
The other posters are right about the Microsofty monopoly, but what made it particularly egregious was Microsoft's anti-competitive practices using their market dominance to actively damage or destroy competitors. This included:
* Contractually barring licensees from offering competing OSes, or selling boxes without Windows installed.
* Leveraging their OS dominance to get dominance in other markets such as linking OS licensing with licenses for other software.
* Pinching competitor's technology using their advantages as platform owner and rolling it into their own products (Stac).
>* Leveraging their OS dominance to get dominance in other markets such as linking OS licensing with licenses for other software.
Such as leveraging their preferred status to get dominance for Apple Music (by being able to charge less since they aren't subject to a 30% Apple Store 'fee')?
Same story with phones. You are free to buy from other suppliers. But you can’t walk into a Walmart and buy milk from whole foods on their shelf’s, even if you feel that would be great for you personally because Walmart is closer but you prefer Whole Foods.
No, that is not the same story. Physical stores can be swapped out on a whim. Phones are something you change at most every couple of years (and hopefully last even longer, if you give a damn about the environment).
Actually, the "Walmart is a choice" claim also only holds up if there actually are multiple stores nearby, because who is going to drive fifty miles to the next store? Food deserts are a thing.
This is a false idea of "choice" and it is just yet another way producers and sellers try to shift responsibility to the end consumer who is largely powerless in most cases.
OK, but there are no iPhone deserts where only iPhones work and Androids get no signal. I don't see any false choice here. There are plenty of other phones on plenty of networks, with plenty of Apps. If there are more or better Apps on the iPhone, arguably that's at least in part because of their careful policies on curation of the platform rather than despite them.
To go to one grocery instead of another in suburban America means driving a few more minutes with a cost of some time, a bit of gas, and a minute amount of wear and tear on a car. To change app stores, it requires spending several hundred dollars on replacement hardware, not including having to repurchase applications, accessories, etc.
That applies as much to Android, or any other phone, as it does to Apple though. It’s just the nature of the market, not some perfidious Apple plot. There’s just nothing substantive here.
> That applies as much to Android, or any other phone, as it does to Apple though.
On Android you can side-load APKs, have alternative app stores like F-Droid and even install custom operating systems. So no, that is again not comparable.
> It’s (…) not some perfidious Apple plot
Sure
> just the nature of the market
Dammit, NO. The market is a human-made artificial construct, not some natural freaking law like gravity that is inevitable and unavoidable. And given that it is human-made we can change it, and make choices on what we demand from it.
Users can’t reasonably be expected to switch smartphone hardware just because of an app. The smartphone hardware market has its own constraints (people generally own only one at a time, they upgrade it every couple of years at a cost of several hundred dollars, etc). Apple may have legitimately earned its position in that hardware market by making products people want, but it’s not legitimate for them to use that dominance to control wholesalers’ access to consumers in a separate marketplace: music streaming. In that marketplace, the relative success of Apple Music vs Spotify should be based on consumer preferences for those services, not on which company also happens to dominate a separate marketplace. See also: Microsoft using its OS market dominance to control the web browser market.
And I am free to use Google Music, Apple Music, YouTube Music, Deezer and even Tidal. Nobody is forcing me to use Spotify.
But, if I have an iPhone, the only application store I can use is controlled by Apple.
In other words: if I am an artist and I want to offer my music via streaming I have plenty of options. If one of them does have a deal that I find unfair, I can choose others.
If I am a developer and I want to offer my app to iPhone users, I have only one option. And if I am banned from this store for any policy infringement (which sometimes is ridiculous and totally arbitrary) I have no other option to offer my app to iPhone users.
I think it's somewhat frequent to have app submissions denied, but I haven't heard of Apple banning future submissions in the same way that I hear of Google permabanning developers.
I agree with Android it's slightly different because side loading is at least possible, but I doubt many people are going to find your widget if it's not on the play store.
True, and if I’m a dairy farm that wants to sell my products to Walmart’s customers there’s only one distributor of shelf space to go to. You can’t cut through an arbitrary point in the business and just demand they change their model. The iPhone might not even be a viable platform today if they had been forced to carry malware from the start because they had “a monopoly on their own product”
It's either Android or iOS really. I'd love for a decent alternative to exist but if you don't want Google tracking everything you do, Apple is the only option.
The thing is there have been loads of other alternatives over the years. Blackberry, WebOS, Windows Mobile, Tizen. Actual customers said no, these are what they want.
A lot of them faced what I would argue anti-competitive behaviour to prevent their growth.
For example, Google banning their apps on Windows Mobile and Amazon Firestore. Google blocking Windows Phone users from accessing maps/mail via a user-agent check. That and Google actively blocking Microsoft developing a native Youtube app.
Is it any surprise that customers were unsatisfied?
Apple and Google's duopoly is natural, no question about it. That doesn't mean we should ignore how they use it.
Google is rightfully scolded for requiring that users sign away their information and following their every move (often using dark patterns).
Apple should be put on hot coals too for how they are abusing their position. Spotify is an excellent illustration because Apple is both the platform and a competitor. I don't understand why an Apple consumer would support their anticompetitive stance.
As soon as you install some apps, your iPhone is tracking you as well. The recent stories about FourSquare have made me realize that things are much worse than I previously thought.
That’s also why high street stores are now struggling while consumers are buying direct from the source or online where margins are tighter.
However I’m not suggesting that local stores are in the wrong either but it does illustrate how consumers have choice there is no such competition inside Apples walled garden. And that is the real crux of why their margins are high: it’s because developers and iPhone owners are locked into the App Store
The obvious counteragument here is that people don’t have to buy iPhones - and that is true. However people do and they still expect their app prices to be low, so developers are the ones who ultimately lose out as they either have to support Apple or be left out entirely and they’re the ones who then have to lower their prices to compete.
It’s also worth noting that the physical store, in your example, would have greater overheads than an App Store
of equivalent size so Apples markup shouldn’t include the same operational cost.
> There is massive competition to the garden itself.
I did already acknowledge that and pointing out why it doesn't work in practice.
In a normal high street setting manufacturers and distributors set their prices and the shops then add their mark up on time. If the prices are too high then consumers will shop in another local store. Which means those stores either have to negotiate a lower selling price or reduce their own margins (or offer an alternative incentive to shop there in spite of the high prices - like free coffee)
With iOS consumers don't have the option of going to another App Store, which then flips the order of control. It means Apple can dictate their markup and app developers are then forced to lower their own margins if they want to appear attractive to other shoppers.
> With iOS consumers don't have the option of going to another App Store
Correct, it's certainly unfair competition but what I'm saying is that it's still not a monopoly, not that it's "fair". When you paid for the iPhone you also paid for the services bundle that you bought as a package. Now if Apple controlled 90+% of the market this would fall under antitrust laws (MS+IE situation all over again). But they only control 15%. Users have the option of going for the the same/equivalent service provided by other vastly more popular phones and their app store(s). So every link in the chain has a perfectly good equivalent.
And even Spotify has a choice. They can shaft Apple and become Android only, since Android has 85% of the market. The reason they're not doing it right now I assume is because they would also shaft themselves, the AppStore might bring a very big chunk of their revenue (historically iOS users are bigger spenders).
Practical example of single supplier without an actual monopoly: If you buy a GM car you're left with one option for a subscription telematics service: OnStar. You can't get Lexus Link for example. I don't think it ever occurred to anyone to call this a monopoly.
> it's certainly unfair competition but still not a monopoly
I agree - which is why I specifically did NOT call it a monopoly.
> When you paid for the iPhone you also paid for the services bundle that you bought as a package....
You're still missing my point:
> And even Spotify has a choice. They can shaft Apple and become Android only, since Android has 85% of the market. The reason they're not doing it right now I assume is because they would also shaft themselves, the AppStore might bring a very big chunk of their revenue (historically iOS users are bigger spenders).
EXACTLY. Thus Spotify effectively doesn't have a choice. It's pay Apples tax or don't have support at all.
This is compounded when you factor in that the in-app sales that Apple wants to take a cut from for businesses like Spotify are sales that Apple's had no stake in. Since you like car metaphors: it's like a taxi driver buying a car and the the dealer expecting to take a cut from all the taxi fairs even though the dealer's involvement ended the moment the car rolled off their forecourt.
> I don't think it ever occurred to anyone to call this a monopoly.
Again, I never called the App Store a monopoly. Others might have but I deliberately didn't because I'm already aware that it legally is not a monopoly. However that doesn't mean they don't still have total control over app sales on their own platform - legal terms aside.
I'm not sure I follow this. When I say choice for Spotify I mean Apple or Google. The industry still allows them to get the same service from the other 85% of the market. I interpret that as "choice", having options. When I go to Malls'R'Us to rent a storefront I only have them as a choice. But I can go to another mall without anyone claiming foul about competition.
Having no choice is when you want internet but there's only one provider. Rejecting that provider doesn't mean you get different internet, or worse. You get none.
And to pick up on the mall analogy above, some storefronts cost more than others especially if they bring in more revenue for the store. And the owner of the mall also has full control over this. Is this not an equivalent situation?
I know I now sound unsympathetic to Spotify's situation but after reading (and later validating) some of the claims Apple is making in this article I can't help but feel like Spotify kind of cheated when they published their call for action by leaving some important stuff out. I had my pitchfork out only to realize the truth is a little more nuanced.
> I'm not sure I follow this. When I say choice for Spotify I mean Apple or Google. The industry still allows them to get the same service from the other 85% of the market. I interpret that as "choice", having options.
> Having no choice is when you want internet but there's only one provider. because rejecting that provider doesn't mean you get different internet, or worse. You get none.
But ignoring Apple's App Store does mean they then get no service for "iDevices" (not just the iPhone).
So their choice on iOS is pay the tax or don't have a presence. This is complicated by the fact that they would then lose customers who want a music streaming on multiple platforms including iOS. So Spotify's choice is really just an illusion.
> But isn't this what you'd expect when renting a storefront in a mall?
Indeed it is. You usually get a little more choice because you can have different landlords in a given high street (albeit you did specifically say "mall" where that choice wouldn't exist) but even in those cases shop owners are regularly complaining that increases in rent are pushing them out of business. and in fact the UK has seen a lot of independent stores go out of business because of exactly that.
> So their choice on iOS is pay the tax or don't have a presence
If I want my music in the Spotify catalog who decides what's my cut and what's Spotify's cut of the money my music is generating? They have 100% control there so if I want to list my music there what are my choices? Pay up or not have a presence.
Apple's choice is to give them access to millions of customers with big pockets (statistically), maintain the whole infrastructure for this, not get anything because the app is "free" but actually not even be allowed to drop them? What kind of choice is that? Should an app even be called "free" if it offers nothing without paying? Isn't that like asking for tax exemptions for a nonprofit organization that makes a profit?
Would it be OK if Apple changed the rules so apps had to offer full functionality without further paid unlocks or simply charge for the app as a service in the App Store at whatever monthly price the developer chooses?
The fact that Spotify lied or misled about these details that are pretty obscure to most people (including me until I specifically read about them) kind of disqualifies them from playing victim in my perspective. They want all the benefits with none of the strings.
> If I want my music in the Spotify catalog who decides what's my cut and what's Spotify's cut of the money my music is generating? They have 100% control there so if I want to list my music there what are my choices? Pay up or not have a presence.
Indeed. This same argument has been ranging on for years about music streaming services and ebooks via Amazon too. So it's not just Apple who get put under the spotlight.
> Apple's choice is to give them access to millions of customers with big pockets (statistically), maintain the whole infrastructure for this, not get anything because the app is "free" but actually not even be allowed to drop them? What kind of choice is that? Should an app even be called "free" if it offers nothing without paying? Isn't that like asking for tax exemptions for a nonprofit organization that makes a profit?
I think that's a little disingenuous. Apple don't chose to let app developers on board - Apple do it because their platform depends on it. Smart devices live and die depending on the developers that support it.
I also agree there is an infrastructure cost but as I said in an earlier post, it's not equivalent to the infrastructure costs of bricks and mortar despite Apple retaining the same kind of mark up. This is where people get narked off. But as I said elsewhere, I also accept Apple has the right to charge whatever they think they can get away with. I mean that's just basic business.
Your point about free apps is an interesting one however if we're honest, Apple do still make money even from free apps. Developers have to pay a small fortune to get their apps included in the App Store - from MacBook sales (if they weren't already Mac users), developer licences and app submissions. I think (but please correct me if I'm wrong here) Apple also have their own ad network for iOS as well? So they would obviously get a cut of that too. In any case I'm not trying to disagree with you here - more just say that Apple are hardly making a loss on free apps even without taking into account in-app sales.
> Would it be OK if Apple changed the rules so apps had to offer full functionality without further paid unlocks or simply charge for the app as a service in the App Store at whatever monthly price the developer chooses?
In fairness Amazon's app store states something like full functionality. I can't remember the specifics but they push back on apps that are in-app orientated in a scammy way while still allowing developers to be contributed for their work. It's a system which works pretty well - at least from an end user perspective. In fact that was one of the biggest things I missed when I "upgraded" my son's Kindle to a regular Google Play-powered Android tablet.
> The fact that Spotify lied or misled about these details that are pretty obscure to most people (including me until I specifically read about them) kind of disqualifies them from playing victim in my perspective. They want all the benefits with none of the strings.
I don't think Spotify has mislead anyone any more than Apple are misleading people. As you said, they all have an agenda - but that's just the nature of business. The question is really who's controlling the deck and are they doing so unfairly. The answer to the former is quite clearly Apple - but the jury is still out on the latter.
It's not really. Crying wolf is a bit hypocritical seeing how both engage in the exact same practices but only one is coming up with the sob story.
> I don't think Spotify has mislead anyone any more than Apple are misleading people
They came in the court of public opinion asking for fair treatment while misleading and giving half the story in their very loud complaint. They lost their moral high ground. Even worse since they're a company doing the exact same thing to artists. My point is, when you're in the same pigsty keep a low profile ;).
Your argument is weird. You acknowledge both are up to the same tricks yet it’s ok for one party and not the other because the first party annoyed you with a press release?
I agree it’s hard to argue who’s right and wrong but your opinion seems to be based purely on a knee jerk emotional reaction - which isn’t a compelling stance to take.
No, I'm saying that what Apple is doing to Spotify is exactly what Spotify is doing to their artists, and it's business as usual for both. It may be immoral but I don't see it as illegal (a court may very well see it differently). After putting Spotify's "call for justice" in context it lost all credibility in my eyes. It's like a robber complaining they've been robbed.
And it's not a kneejerk reaction. I plan on using both Apple and Spotify in the future. But anything Spotify want to get they should also give. Doe it look like they are to you?
I'd take Apples comments about the way Spotify treats artists with a huge pinch of salt. Spotify can only work with the labels and they're the ones who pay the artists. Often for a pittance, yes, but that's outside of Spotify's control. In fact labels are the ones who have been asking for higher mark ups in distribution while paying less to the artists and it's because of this we've seen so many music streaming services go under. Despite what Apple say, it's not that lucrative a market for most streaming services.
So I really wouldn't take Apples rebuttal at face value either. It doesn't line up with what any other the other streaming services (both current nor the ones that closed shop because they simply couldn't afford the exorbitant rights being demanded) have claimed over the years, and it certainly doesn't line up with what I experienced back when I was involved in the music scene myself (which was some years ago now - but sadly it's an industry that showed no sign of adapting even then)
> So their choice on iOS is pay the tax or don't have a presence.
Not true. They can simply not offer in-app purchases. The Kindle App doesn’t pay any “tax” to Apple. Consumers have access to the Kindle App without Apple getting any “cut” of Amazon purchases even as Apple has Books.
I think this is basically what Spotify are doing at the moment but it's not really an ideal solution. Though I guess there's nothing stopping users signing up via Safari and then installing the native iOS app.
> Since you like car metaphors: it's like a taxi driver buying a car and the the dealer expecting to take a cut from all the taxi fairs even though the dealer's involvement ended the moment the car rolled off their forecourt.
I think this is an incorrect analogy. This is why Apple only charges for physical goods, not digital ones. The rationale is they distributed your product to customers you would never have had access to without them:
- they spend marketing dollars to get those customers;
- they develop and maintain a platform so you can run your business on it.
By simply publishing their app on the App Store, Spotify gets access to 15% richest customers of the smartphone market. If you’re charging customers for something they consume on that device, then I think it’s fair to pay a share.
That being said, I have no idea how this will play out in court. Intuitively, 30% the first year sounds like a lot of money for a distribution fee.
> I think this is an incorrect analogy. This is why Apple only charges for physical goods, not digital ones. The rationale is they distributed your product to customers you would never have had access to without them:
Would the app developers "never have access" to those consumers though? Because if the iPhone didn't exist then consumers would just use another handset. Just like we did before the iPhone and just like a significant amount of people do currently.
There's definitely a blurred line somewhere though. I agree to Apple having a fee for app sales though I think 30% is a bit steep but I agree Apple ultimately get to decide how much they want to charge. I agree that some apps might try to circumvent that fee by offering in app sales instead so Apple are trying to close off that particular loophole. However I don't agree that Spotify fall into that same category because their "in app sales" is actually a subscription service to a much larger product. However where do you draw the line?
> I think this is an incorrect analogy.
Obviously I wouldn't agree but I can completely understand why you'd say that given how open to interpretation analogies can be.
To be honest I hate posting them in debates because if you agree with the point then you'll agree with the analogy but if you don't agree with the point then you'll naturally find a reason the analogy doesn't fit. And given analogies aren't meant to be 100% representative, it means there's always plenty of ways to disprove it. Thus analogies are never persuasive in a debate. Worse still, sometimes you end up going down a rabbit hole of arguing analogies rather than discussing the actual point at hand.
There does seem to be a conflation of “unfair competition” and “monopoly” going on. Generally speaking of this debate, that is.
The App Store is a service rendered to its customers, the likes of Spotify. In the form of the hosting of the app, and all the backend behind that like in-app storage (iCloud). The code review and ‘security guarantee’ that Apple holds over Google and other rivals is also a cost.
IMHO this boils down to subsidy, on the part of digital services companies, publishing apps, subsidise the free and “real world” goods and services company’s that go unlevied for their participation.
It’s a bit like at carnivals, when food trucks pay to get a place, and are often expected to pay a commission on their profits too. But the charity stands, and free ‘workshops’ for kids etc. don’t pay to be their, because their providing a different service.
Although growing on the pie seems a more apt metaphor. Defending 15% fees on second-year subscription is pretty difficult. There's no marketing, very little fraud risk. It's really rent-seeking behaviour – which of course is the commercial point of the walled garden approach.
This is Apple exploiting a very lucrative market position, one that they did invest quite a lot of money in – and took quite a gamble – to create.
Definitely no counter-arguments from me. Because of Apple's pricing insanity, I've made sure I own zero of their devices, and I think every person capable of independent thought should do the same.
And this makes sense. They are counting the value paid per 1000 plays. If most of users in spotify are free, the average will be lower. Also, spotify has more plays than apple, so the final value paid might be higher.
This makes me wonder if $ per play is the right metric, versus $ per artist per platform. If you get paid less per play on Spotify, but get many more plays there would that still be a better deal?
>Moreover, that's the pot calling the kettle black. That's the app store in a nutshell -- Apple supplies the marketplace, but is also making a substantial chunk of money off of others’ work.
Yes, but on mobile Spotify doesn't even provide the Marketplace -- only part of it (their own app), the other (the mobile OS, platform, payment processing, consumer trust, marketing, etc) is built by Apple and Google.
Spotify literally sued artists and musicians because they didnt agree with a court ordered fee increase...but Apples hypocritical on this issue somehow.
Spotify also uses Apples infrastructure and marketing tools for its app. I dont think Ive seen any app creator up on stage at Apple events more than Spotify. Its not like Spotify will use Apples tools and ecosystem one time then stop. Its ongoing and 15% is reasonable. Apple literally changed the app store rules to accomodate Spotify and everyone knows it.
I will say that I think Spotify should be able to advertise payment outside the app.
Well, why don't Apple Music pay its "fair share" of 15%~30% to Google since it's hosted on Google Play? They are also using Google's tools and ecosystem.
Don't forget that it is a symbiotic environment. Spotify needs to be on the Apple ecosystem as it is massive and Apple needs to have Spotify in its ecosystem because that's what the users want.
As for payments, they all follow the same scheme more or less and redistribute about 70% of the revenue to the rightholders. If the services are priced the same, it's exactly the same for artists.
The big difference is that Spotify has a permanent free tier, which admittedly makes less money short term, but it is driving acquisition of premium users faster than any other methods. The alternative being no revenue, it's just fine.
Apple on the same topic doesn't care about razor thin margins on this product, or even losses. They are a hardware vendor, so as long as they still sell their devices, they will be fine.
She called out Apple when she was at her high, now she bends to Spotify and launches exclusive content on the platform. The platform that doesn't want to pay the artists even when they have all the right.
Since when have Apple's PR releases seemed so snarky? I haven't seen so many phrased like this, which underneath the layers of pseudo support for developers and artists, is basically a big "NO U".
I was thinking this too. I’m not a big fan of this “we’re champions of privacy and the little guy” bullshit Apple has been spewing lately. They have some good points and so does Spotify. But the way they address these issues comes across very condescendingly.
Want to talk about exploiting others work to make money, how about we start with their factories which they use to exploit other countries’ cheap labor?
For context: Apple's original plan was that artists would get no royalties from users using Apple Music's (3-month) trial. Taylor Swift threatened to (maybe actually did for a bit?) pull her music, and Apple backed down.
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.
> 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.
I think you may want to refresh your memory on that. The subject was Apple paying artists during the trial period—when Apple itself isn't being paid. Which isn't brazenly greedy, since (a) they're not making any money during that time, and (b) that was and is still the standard. What was different about Apple was that their trial period—the period where users could subscribe to Apple Music without paying Apple anything—was 3 months, instead of the industry standard 1 month.
Swift had a legitimate complaint about not getting paid for 3 months of listening, but to describe "2 more months where listeners don't have to pay Apple a dime" as "some brazenly greedy policies" misses the mark by quite a bit.
> What Spotify is demanding is something very different. After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace.
Please Apple, pay all the open source projects that you use, a fair share of the revenue you generate on top of them.
They contribute to specific open source projects with a long-term view to undercutting other open source projects that are more independent of Apple. That is far from being "nice" or "contributing back".
Have you heard of "dumping"? What Apple does in its FOSS contributions is a similar thing - pour a ton of developer resources into critical FOSS projects so that they eventually control the development process and claim they are "contributing to open source", but in the end everyone that depends on these projects have to follow the direction that they set. LLVM/Clang is perhaps one exception, but even the Apple parts of that project's history have very obvious goals of undermining GCC since they hate the GPL's guts, counterbalanced by the legitimate need for a FOSS competitor to GCC that attracts enough non-Apple influence in the LLVM/Clang project to balance out the Apple influence.
Every company uses and contributes open source if they believe there is a business case for it. No one is immune from that fact.
I’m sorry but the whole open source claim is weak because the musicians aren’t releasing their product as free to use by anyone. Why would you otherwise need anti piracy measures like Spotify if the music was free to use to begin with?
Apple has no grand plans to dominate open source, that's silly. All of Apple's OSS contributions can be easily understood as solving Apple's needs.
Apple's LLVM involvement is not driven by spite towards the GPL; Apple simply needed a compiler that was compatible with their business model. Likewise they started WebKit so as not to be dependent on MS for a browser, and Swift because they wanted a successor to aging ObjC.
That's very innocent and naive of you to believe, though of course it's easy to write off any corporate misbehaviour as "solving business needs".
Steve Jobs originally tried to keep the ObjC compiler frontend to GCC proprietary but was forced to open source it due to GPL requirements. Needless to say he hated the GPL ever since that episode and of course jumped on the opportunity to fund a competitor with a non-copyleft license.
Lots of companies hate the GPL. It’s nowhere exclusive to Apple. So what? They don’t have to align with your vision of what open source should be like. What’s wrong with the idea of playing in a different sandbox with a different set of rules if the rules in your current sandbox aren’t ideal? Are you suggesting that we should shame companies who don’t want to deal with GPL-licenses code?
Huh? I totally agree that the app store is a monopoly and leveraging the iOS app store to pressure spotify (a competitor to apple music) is anticompetitive.
But I'm very confused how you're twisting Apple's huge contribution toward LLVM and Webkit over the years into some evil act. Even if all you want is for GCC to be the best compiler it can be, work on LLVM has contributed to that goal by raising the bar. Predictably, GCC has gotten a lot better in the past decade or so. And I'm sure competition from LLVM has helped, just like how browser performance improved remarkably across the board when Chrome first came out. And Android's UI got way better after the iPhone was first released. (It used to be awful). Competition raises all boats; and consumers benefit when that happens.
Who exactly do you imagine is hurt by Apple's open source contributions to LLVM? If clang dethrones gcc it will be because llvm gives developers what we want - a faster compiler, faster executables, better IDE support or something else. My life is made measurably better by these things. Getting all that for free? Hallelujah.
If you don't like the direction Apple (and others) set for an opensource project you care about, you're free to build your own community around a fork. Thats what you would have to do anyway if you want a project to succeed without Apple's support.
What do you want? Great, free software? You've got it. The freedom to change that software however you want? Fork away, brave coder. The ability to sell software based on your changes? Go right ahead.
So where does that anger come from? How is anyone worse off?
> But I'm very confused how you're twisting Apple's huge contribution toward LLVM and Webkit over the years into some evil act.
I'm not twisting anything into an evil act, read my words more closely.
Some of Apple's contributions to open source have been beneficial to the rest of us, because there are competitors to keep them in check in those areas they chose to do open source in.
You should have no doubt that, had those other competitors not existed, Apple's open source contributions would have been used to push a monopolistic advantage over other projects and organisations, and passed it off as "meeting their business needs".
They do not do open source out of any principle of generosity or co-operation with other projects, and much of their ecosystem is legally and technically hostile to supporting FOSS the "proper way". For example it is impossible to properly supply a GPL binary on an iPhone because in general you do not have the ability to install arbitrarily-modified versions of it, a very fundamental principle of the standard definition of Free Open Source Software.
Also I'm not sure why you cite Android vs iPhone since near-everything about an iPhone is proprietary.
What areas are there no competitors, in the space of things they opensource? LLVM has GCC. Webkit has (amongst others) blink. Darwin has Linux. FoundationDB has dozens of great competitors.
And even in the absence of competitors, how is new permissively licensed opensource software a bad thing? How, exactly do you weaponise opensourcing decent software which has no competitors? Can you give some examples?
Forget open source - Apple rips off ideas from devs-and subsequently dumpstering their apps coz why buy an enhancement when your device does it already?- on their platform so commonly there is even a term for it - getting "sherlocked"
This is not exclusive to Apple. Software included in the default MS Windows installation was a huge concern, too. MS killed a company or two back in the day when they piled on extras in Windows that these other companies were selling for profit. And I am certain that Google killed a few 3rd party apps by integrating similar features in Android nor their apps.
This. They took half of FreeBSD without giving them a single cent, only to never give horseshit about them afterwards. They're didn't even add support for FreeBSD to Swift despite the fact it would cost them very little effort, just to underline how little they care.
I am aware of this. Hence the reason for mentioning it–Apple clearly chose to use BSD because it's not GPL, but I don't think it's fair to complain that Apple is bound to contribute back. This is the tradeoff the project made when they chose the BSD license.
Open Source, pay for Apple's WebKit and Apple's contributions to FreeBSD and other open source projects.
Every Linux box that is connected to a printer (specially networked printers) runs CUPS in part by Apple.
Also, FreeBSD is a small part of macOS, contrary to what some people want other people to believe, and FreeBSD is not in that camp of GPLv3, so no, FreeBSD is not on that disgusting echo chamber leaded by Stallmann
They owe nothing for anything they legitimately use: that’s the consequence of open source licensing as a developer. If a developer expects a project to get a fair share of revenue from projects that use it, they are free to adopt a licensing model that dictates that. That is a perfectly reasonable licensing model.
I get it: I had an open source project that HP built a product around many years ago, but modulo a couple of patches from them, we saw nothing. Didn’t bother me: we knew when we open sourced it, anything that was done with it was out of our hands.
The best I’d expect from a company using open source is that they be good open source citizens and contribute back. Apple has. clang, WebKit, etc....
The fact that they set up the legal structure of the "App Store" in a more restrictive/monopolistic way than traditional GNU/Linux package repositories, is no excuse if they are going to start playing the "moral" card like in OP's link.
They benefit substantially from open source and give very little back in concrete financial terms, yet complain that Spotify is asking the same thing and portray them as freeloaders. In reality, Apple are doing far more freeloading off of other projects than Spotify is doing off of them, legal or no.
What Apple have created in the App Store (a software package repository on an OS platform) is a monopolistic trust over what should be a free marketplace, like how regular GNU/Linux package repositories have worked for decades. This is exactly what "anti-trust" is supposed to prevent and the DoJ need to have the balls to start breaking up tech companies for this shit, just like they almost did to Microsoft.
> In reality, Apple are doing far more freeloading off of other projects than Spotify is doing off of them, legal or no.
You cannot make any moral assumptions here because the whole point of many of these open-source projects is that people can use them freely, with no obligation - moral, or otherwise - to contribute back.
> should be a free marketplace, like how regular GNU/Linux package repositories have worked for decades.
Yup, this'll end beautifully. It won't devolve into a malware-ridden mess that destroys the privacy and security of users. The users that pay for a curated ecosystem and idiot-proof privacy/security.
Package repositories might be great for the HN crowd. But I think it's fairly blind to think it won't harm Apple's target audience.
I'm not making any moral assumptions. I'm just pointing out the hypocrisy of Apple's moral assumptions that they're making in their posting.
> It won't devolve into a malware-ridden mess that destroys the privacy and security of users.
Windows, GNU/Linux, and in fact Mac OS X itself, are all doing fine. The real security problem is elsewhere, it is disingenuous to use this as an excuse for monopolistic practises.
Apple's 'moral assumption' is that Spotify would like to 'freeload' off of their store. The App Store is provided with the intent that services which are based off of it contribute back to the App Store.
Open-source software is not provided with the 'moral assumption' that users contribute back.
There is no hypocrisy here. Apple is criticizing Spotify for trying to sidestep the moral expectations of the App Store, but Apple itself is not sidestepping moral expectations of the open-source products it uses.
> Windows and GNU/Linux are doing fine.
Are they? In what context? Do you really think Windows does "fine" for the average user, and that they are not at a huge risk of malware, terrible software, and more?
It's also disingenuous to say that security problems are not in large part caused by how open available distribution channels are. We have proof showing that the App Store has provided an objectively more secure environment for the average user than Windows or even the repository model.
> The App Store is provided with the intent that services which are based off of it contribute back to the App Store.
No, the App Store is provided to drive iPhone sales. If you couldn't install third-party apps on iPhones, no one would buy one nowadays. The market has changed drastically since the iPhone's launch, when a public SDK was still unavailable.
> We have proof showing that the App Store has provided an objectively more secure environment for the average user than Windows or even the repository model.
I'm not convinced that's true. Apple has also invested heavily into app/process isolation on iOS itself, and a permissions model that keeps apps away from sensitive data without the user's consent.
Not to mention the fact that it's more the review process that keeps malicious apps off the phone. Google Play Store is also an app store, but they don't review apps anywhere nearly as closely.
Either way, an app store is not a prerequisite for a review process.
This is a very good point. The simple act of having a popular app on the App Store is a significant contribution to that marketplace.
I imagine losing Spotify wouldn't cause every Spotify user to ditch the iPhone, but I'm sure there are others like you. And many people likely have some other app that they'd consider ditching the iPhone for if it was pulled.
A healthy app ecosystem is a big part of what drives iPhone sales.
Just ask Microsoft, they were/are paying developers to port their apps to Microsofts platform, just to get traction. They even made an unofficial Youtube app to fill the gap, which Google blocked.
Can anyone explain why Wechat, the app that can do everything, streaming paid music, read paid ebooks, order food and goods, play games, are allowed to charge directly without IAP?
Is this a real question (genuinely asking) ? Apple applying its policy differently for some apps, or chosing to re-interpret some of their policies randomly for some apps, is not an uncommon complaint and was a big part of spotify's original complaing.
It's a real question because the linked statement explicitly states the same rules are applied to all apps. One who may not acknowledge the obvious falsehoods can be excused for assuming the same rules are applied to all when told that's the case.
I think part of it was that Apple was taking 30% from donations, tips, and e-cash gifts that wechat itself wasn't profiting off of, and I don't think those were even powered by in-app purchases.
Also, Apple itself accepts wechat as a payments method, so it's a payment processor.
Because if they try to tell wechat no wechat won't change their app anyway so that would mean no wechat on ios. Which would mean goodbye to ios in china.
Apple has created a massive platform with a large number of users over the last years. This has cost them a substantial amount of money and hard work. Why is not ok to monetize this Why is it ok to collect so many users on a platform that you end up as "unicorn" like Spotify without paying money for this acquisition channel? I don't get why Apple is viewed here as the "bad boy". You could argue the same with Google. Why do they take money for ads? Because they have the users. Same with the app store. Nobody forced Spotify to create an Apple app. It was THEIR strategy to grow on the Apple store.
> You could argue the same with Google. Why do they take money for ads? Because they have the users.
That's a bizarre analogy. The analogy would be that Google not only takes money from PnG for showing you an ad for Head and Shoulders, but then charges forces PnG to sell you the shampoo through Google AND takes a 30% cut on the revenue.
> Having read both Spotify's and Apple's claims, I am confused. Both seem legit.
Both sides are exaggerating: Spotify's claims that Apple is blocking their apps and preventing them from shipping features are likely bogus, while Apple's claims that they don't selectively implement rules when doing app review is false as well.
What an immature letter, did not really expect a response like that.
It also fails to address the most important points from Spotify, which I thought were: you have no choice but to use the apple store, and promoting your own payment is not allowed. Fix one of those and most people would be happy.
I guess you didn't take the time to read the full response:
When we reached out to Spotify about Siri and AirPlay 2 support on several occasions, they’ve told us they’re working on it, and we stand ready to help them where we can.
Are they saying that there's no Siri or AirPlay2 integration because the Spotify developers just didn't get around to it yet?
Last I checked the documentation the capabilities of what you can get from Siri were extremely locked down to only a handful of usecases
>We know from painful experience that letting a third party layer of software come between the platform and the developer ultimately results in sub-standard apps and hinders the enhancement and progress of the platform. If developers grow dependent on third party development libraries and tools, they can only take advantage of platform enhancements if and when the third party chooses to adopt the new features. We cannot be at the mercy of a third party deciding if and when they will make our enhancements available to our developers.
I have noticed that the quality of writing at Apple has gone down dramatically since Jobs passed. It used to be concise and elegant. Now it’s some cross between a SAAS landing page and a passive-aggressive tweet.
You can see this everywhere from Apple.com to this letter.
This letter is the exception, not the norm. I have never seen official statements from Apple this strong aside from the Bloomberg letter they published last last year.
> A significant portion of Spotify’s customers come through partnerships with mobile carriers. This generates no App Store contribution, but requires Spotify to pay a similar distribution fee to retailers and carriers.
Everyone would benefit from seeing what both Apple and Spotify are paying to the carriers for these bundling deals.
Everyone would benefit from seeing what both pay the labels. Everyone speaks about “they only pay artists X per stream”. However, neither of them pays the artist directly.
Well that's not really their problem is it, I'm sure independent artists that do have their music on Spotify do get paid 'x per stream'. That is the problem with the music industry and their label signing deals.
There are very few independent artists on Spotify that get paid directly by Spotify. The absolute vast majority (easily 99.9999% of artists) are signed up via the four major labels or (if they are independent artists) via aggregators:
- Spotify only started signing up independent artists since 2017 or so [1] [2]
- Even there Spotify recommends you upload music through aggregators or labels [3] (I'm not even sure if you can get there as an artists without going through a label or a distributor)
> That is the problem with the music industry and their label signing deals.
The music industry has no other options but sign deals with labels. Because the major labels control the catalog of music that people listen to. Almost anything even remotely popular you listen to belongs to them: from Taylor Swift to Beatles, from Drake to Iron Maiden, from One Direction to Pink Floyd etc.
And the industry is too scared to say anything against the labels for fear of retribution. You go against Warner Music, they pull their content, and goodbye Slipknot, R.E.M., Skrillex, Red Hot Chilli Peppers, Muse, Ed Sheeran, Eric Clapton, Ghorillaz, ... [4] You go against Sony, and... etc.
Notably absent: addressing the point that Apple's own streaming music offering has an unfair 30% price (or profit) advantage over any other service that chooses to use in-app payments.
1. 15-30% is a fair “contribution to maintaining the App Store ecosystem” which has led to Spotify’s “dramatic growth.”
2. Spotify is greedy and bad, just look at how they squeeze artists, unlike us.
The second point is really weak considering that paying such a high fee to Apple, which Apple Music itself doesn’t have to pay, might force Spotify to take it out of the artists’ end to stay afloat.
And as to the first point, Apple makes it sound like the App Store was the reason for Spotify’s success, so it’s only fair they take a healthy cut. But there’s no other choice on iOS. It’s not clear if discovery in the App Store was essential to Spotify’s growth or if it was just the only way to install software on iPhones.
One need only look at macOS to determine how important the App Store is to discovery and growth. Many, perhaps most developers bypass it.
> paying such a high fee to Apple, which Apple Music itself doesn’t have to pay, might force Spotify to take it out of the artists’ end to stay afloat.
bunnycom's reply to you is flagged dead, but there's an important rebuke to that claim: Spotify doesn't use iAP for subscriptions any more, and Apple gets no money off of Spotify today except for pre-existing subscriptions from before Spotify disabled iAP: https://support.spotify.com/us/account_payment_help/subscrip...
So I think it's a bit specious to say Spotify has to squeeze artists more to pay Apple's fees, when they're not even paying those fees any more.
And I'd venture to say the iAP process really does help growth of apps like Spotify: it lets you use a single credit card you have linked to your iTunes account for all in-app purchases with just TouchID/FaceID, and is a much lower-friction way of paying money to an app than filling in your credit card information into every app, having to change them all when your card expires, etc. I wouldn't say it's worth a 30% (or even 15%) cut, but it's not worthless.
> I wouldn't say it's worth a 30% (or even 15%) cut, but it's not worthless.
Sure. By that logic Apple also “helps the growth” of Uber by offering the same convenient payment method in the form of Apple Pay. Their fee for that: 0.15%.
Charging 15-30% is clearly about more than “helping growth”.
And Apple isn’t just charging for the convenience of IAP. They’re also frustrating Spotify from collecting payment any other way. The specious argument here is saying that strangling premium subscription growth doesn’t hurt a company’s finances.
Though I think there are parts of this letter that are obviously self serving and hypocritical the point I find more problematic actually has nothing to do with Spotify.
Apple says most apps contribute nothing to the app store. This is false. To list an app on the app store developers must pay, yearly, for the privilege. This is important because a reasonable person could make the argument that _this_ is a more fair model and one more in line with providing the actual service of the app store.
Apple,rightly IMO, has accused Spotify if wanting to have it's cake and eat it too, but charging a fee to list and taking a percentage of revenue could easily be seen as the same.
This argument is super thin -- they seem to think that Spotify enjoys a huge advantage to being available on their platform (they do), without acknowledging that they also enjoy a huge advantage from the most popular music streaming app being available on their platform (which is also true). Apple still makes most of its money on hardware, and having popular apps is absolutely vital to selling hardware.
Apple has Apple Music, has more music than Spotify and even if there is a track on Spotify and not in Apple Music, you can upload your own MP3s and stream them. I have a gigantic collection of Soundtracks and indie music there.
If Spotify wasn't on iOS I would move back to Android in an instant. I don't like Apple services because I don't want vendor lock in.
I use Spotify because they're independent and support a large number of devices. This is just like how I use Sonos because they're independent and support a large number of services.
Apple benefits greatly from having high quality, third party applications on iOS. Wasn't the lack of third party apps/support one of the big issues with Windows Phone?
Lots of people said that when a popular local carrier changed from free Spotify to free Apple Music on one of its plans. Everybody switched to Apple Music.
Windows Phone failed primarily because it didn't offer anything that Android or iOS couldn't offer.
Apple is also being misleading about the 30%/15% fee variance. They make it seem like Spotify's fees drop to 15% after it has been in the App Store for a year. In reality, it is only 15% if a user is renewing their annual subscription. For initial purchase of annual subscriptions or initial purchase+renewal of all other subscription durations the fee is still 30% indefinitely. And I'm willing to bet that the vast majority of users pay monthly rather than annually.
This sidesteps a few of the issues, which include that Spotify like others in the app store is at the mercy of Apple interpreting its own rules when deciding to block updates.
Then there's the notion that Apple is competing with its own customers in the appstore. And when it comes to Spotify, Apple Music is a direct competitor but I doubt they charge them 30% of revenue. They have a huge conflict of interest. Pretending that they are even remotely neutral is ludicrous. They block competing browser technologies; technology stacks not favorable to them; content they don't like; business models they don't like; etc.
And then the infamous Apple tax is of course very lucrative for Apple. Calling others greedy while charging this much while actively competing against them is simply arrogant. Spotify has delivered lots of revenue to Apple over the years. It seems Apple feels entitled to a huge chunk of this revenue and to the privilege of unfairly competing with them at the same time.
This company (and others like it, cough Amazon) deserve to be scrutinized for their anti competitive practices.
Funny that they didn't mention Apple Music even once in their statement, which is what a major part of the complaint is about.
Overall I'm shocked by the level of hubris coming from Apple. The app store is a mutually beneficial ecosystem for all parties, but they make it sound like they are doing the world a huge favor by running it.
> Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace
Wow, Apple's response is rather arrogant. Apple seems to forget that without apps like Spotify, and those it said "contribute nothing to the app store", app store won't grow to what it is today. I am pretty sure that Spotify is willing to distribute outside AppStore if you give it a choice.
It's a symbiotic relationship, but if it reduces to "which came first, the chicken or the egg?" analogy it would be:
* the app store is successful thanks to apps like Spotify
* Spotify is successful thanks to the app store
I think the second premise tends to be more accurate to the case. If I make the most used app in the world today, I cannot take credit for pumping the success of the app store, because it was already there when I launched my app.
In either case, it's Apple yard, they set the rules and charge what they want. Don't place your main source of income in another person's yard.
The app store is shoved down my throat unless I jailbreak my Iphone NOT a value add. I'd have ten times more apps on my phone without it. They'll lose this legal battle.
> The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.
So Spotify complains that the rules are draconian and the response is that everyone has to follow them? If anything, it requires getting to a certain size to have your complaints addressed like this, even if they are hand waved away as consistently applied.
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[ 2.8 ms ] story [ 360 ms ] threadI definitely take issue with it's avoidance of the core issues though: That the services they provide aren't optional on the iPhone. They make it sound like connecting Spotify to users, and allowing them to use their in-app purchase mechanism is a service they offer that they should be paid for. But the reality is, that Spotify has no choice but to use that service, which is the definition of a monopoly.
In that, I feel they didn't meaningful counter Spotify's primary anticompetition claim, and I look forward to seeing what the EU makes of it.
Apple tries to counter that the problem is Spotify. It's Spotify that is money-hungry, Apple claims:
Underneath the rhetoric, Spotify’s aim is to make more money off others’ work.
The only problem with this argument is that Spotify is just one example. App publishers of all sizes have expressed grave dissatisfaction over this issue. Ultimately, this has led to a poorer experience for Apple's own customers in the form of higher fees for in-app purchases or weird, convoluted checkout flow that requires you to goto your browser to finish a transaction.
https://developer.apple.com/app-store/review/guidelines/#in-...
As far as I know you can't do that on iOS. There's also nothing stopping the devs from selling IAP themselves on their own website. So no, Steam is much much more open than Apple's App store. Not to mention the fact that Steam is completely optional and the App store is not.
Not at scale, no, but you can generate promo codes (up to a limit - maybe 100?) to distribute your paid app for free.
If the App Store could be circumvented as easily, Spotify probably wouldn't be raising this issue to begin with.
You can upgrade to Spotify Premium through a website which they advertise during their free tier ads.
Apple doesn't allow that apparently.
epic is not the saviour here, they're dumping cash to bring shitty console practices to the pc ecosystem, namely storefront exclusives
So not sure what you mean.
It’s the same (technically easier as I don’t need to convert ePub to mobi)
Apple owns a mall (iOS). In that mall, Apple owns a book store (iTunes). Amazon also has a book store in the mall (Kindle).
Apple does not want to sell Amazon's books (Kindle format ebooks) in it's store (iTunes). Ok.
Apple decrees that no store in the mall shall sell any books but iTunes books, which only they may sell. Not Ok.
In the brick-and-mortar world, malls are fungible, and stores that sell the same goods are fungible. The iPhone is not fungible.
Anyone that wants to constrain themselves to a single market, needs to accept the rules of focusing on a single market.
Steam Link faces a similar issue. Apple, apparently, considers buying desktop games through an app that can remotely play them on your phone to be the same situation, and demand that payments go through them.
This is the strange bit, since Apple does this very rarely. Or at least, they used to…
I think the most likely scenario is that Apple will capitulate and remove any restrictions from apps soliciting payments in a web browser from within the app (are there any restrictions on this?).
Best case scenario is
1) Apple switches their platform monetization to a more direct model where you pay to advertise your app in the App store. This will get tricky because their "Top apps" list still serve as advertising but you can't just remove an app from there because it refuses to pay.
2) Apple removes the restrictions against advertising alternative payment/subscription methods
The problem is that you can't laugh Apple out of the market for payments on iOS devices, because they don't allow other entrants into that market.
Is it because they provide a service in exchange for that 30%, a service that many people are willing to pay 30% for?
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 and that means you can’t engage in a practice like linking to an outside signup page that is solely for the purpose of circumventing the fees you rightly owe for use of the distribution channel.
Nobody has to distribute your app for free. You don’t like the prices Apple charges for it? Go to Android, or make your own distribution channel, whatever.
Spotify is free to not participate if they don’t like the pricing.
Spotify already has their own distribution channel (sign up on their website), and Apple is prohibiting them from mentioning it on iPhones and instead forces them to use Apple's distribution channel, which comes with a hefty price tag.
So if they want to distribute their free app on the iPhone, they are welcome to do so, as long as they don't mention that people have to go to their website to sign up for the premium service.
We can still argue about whether Apple is allowed to behave this way, but at least we'll be arguing about the right thing.
> “Spotify already has their own distribution channel (sign up on their website)”
Yes, and if they don’t like the prices for oveying the rules of Apple’s distribution channel, they are free to remove the app from Apple’s app store, and notify customers that they cannot use the service on iOS devices.
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.
There's also no law against having a monopoly, only for abusing your monopoly in one market to gain an unfair advantage in a different one.
Similarly, it wouldn’t surprise me if music festivals or cinemas charge suppliers selling on their grounds more than 30% of revenues.
I know app stores feel different, but as far as I know, that legally still is a reasonably apt comparison. That may eventually change, but if so, someone will have to specify what exactly the difference is. I’m not sure that is as simple as “physical vs digital”.
In this case apple has a marketplace AppStore.
McDonalds is not a market, McDonalds is a vendor in a Market.
Apples has a created a market on is the platform by virtue of the App Store, a case can be made for Anti-Trust due to to this, but it would be a hard one.
Defining what is and is not a market is always one of the largest challenges for Anti-Trust, take for example the Merger of Sirus and XM, there was a debate over if Sat Radio was a market separate and independent of Traditional Radio, in the end Sirus / XM won and was able to establish that Sat Radio was not an independent market because consumer could easily switch between Sat Radio and Traditional Radio
Given the Lockin, and increasing Costs associated with Changing Mobile Platforms it becomes more of a question on if iOS and Andriod should be separate markets or be considered a single market. I can see cases for both
Yes there is. It's called anti-trust law and a large part is about pure market share.
It's also illegal to use your monopoly in a market to get advantages in that market. Most notably, you can't use your monopoly to keep your monopoly. (I.e. intel making a deal with dell where dell cannot use AMD processors)
That's not a law against having one, only abusing one.
No, it's still not illegal to have a Monopoly. The FTC can block mergers that can create them if they believe it will harm consumers, e.g. through higher prices caused by less competition, but they typically won't block them if they think consumers will benefit through operational efficiencies gained by consolidation.
It's legal to have a monopoly and get advantages in the market.
It's illegal to have a monopoly and then try and extinguish your competition in the current or any adjacent markets.
My given example of dell and Intel actually happened and was prosecuted. How does that fit your claims?
Monopolies and oligopolies are inefficient. Whether legal or not they result in in detrimental outcomes.
I mean that’s basically them abusing their monopoly on Walmart stores right?
Let’s get things straight. Apple does not have a monopoly on smartphones. Apple does not have a monopoly on smartphone app stores.
Walmart tells a manufacturer they have to pay a special Walmart surcharge every time a sale is made, and that they can't raise their prices only at Walmart (or give discounts at other stores) to make up for the difference.
And, in addition, after the sale is made, if the product allows the customer to buy add-ons after they bring the product home, the customer is required to go back to Walmart to purchase that add-on, and another Walmart surcharge is assessed; the manufacturer isn't allowed to sell add-ons directly to the customer without Walmart acting as middleman.
Like Walmart has a monopoly on shelf space at walmart.
Apple does not have a monopoly on neither Phones nor on application markets for phones. They have a very attractive market, which they control, but not a monopoly.
You could say that Apple has a monopoly over developers building apps and providing their services to people using iPhones. But is that the scope that is under regulation, or what constitutes the "marketplace"?
Someone else looking at it could say that Spotify has a multitude of ways to provide its content to customers -- web, it's own Windows + Mac desktop apps, Android, etc. Would you claim that that is lacking competition?
Which way is a regulator supposed to look at it?
Wow. It is astonishing to read this from a company being widely accused of an unfair 30% tax.
Correction: the revenue share is 15%, it was originally 30%
I'm honestly not sure what the big deal is. You can subscribe outside of the App store (by not using in-app payments) and not pay that extra $$, and Apple doesn't get that extra $$.
It seems that Spotify claims that even making that information known on the app gets their app rejected. They have mentioned that Apple rejected their app because of the word 'Free' being used, as well as 'promotions' being used inside the app, and there is no way to link to external payment options.
Enabling payments via the App Store is helpful, denying other forms of payments seems leaning towards being anti-competitve.
Link for reference: https://www.timetoplayfair.com/
Asking Apple to change the 30% fee to 0, or some other arbitrary number is untenable.
Blocking Apps from advertising that you can subscribe on their website outside of the Apple platform is weakly tenable. I can see the argument and reasoning that Apps should pay for "advertising" for the service through the Apple platform, but in reality "discovery" through the Apple platform is limited and in Spotify's case most people probably do not discover it through the platform. That being said, I can see the argument that
1) If Spotify users discover them through the App store, they would not know about subscribing directly through Spotify for a lower rate. Therefore Spotify should pay the 30% as user acquisition cost.
2) If Spotify users come to the App store from Spotify, they should already have signed up outside or know about the lower rate outside of the Apple platform.
It seems to me the main reason why Spotify is against the 30% tax (aside from generally wanting to not pay), is that
1) Spotify wants to be able to upgrade free users to paid users in-app with the least amount of friction. They can do this by email, or through the App, but obviously it's much easier to do so through an in-app popup. I've had countless friends that have accidentally subscribed to in-app subscriptions so I know how easy it is to subscribe.
2) Spotify does not want to pay the lifetime 30%/15% tax on customers acquired through the App store.
'stronger presence on other platforms' doesn't help with presence on iOS market
'a better product' they arguable already have it
A stronger presence on other platforms would enable Spotify to make more revenue from those users vs. what Apple could siphon. Apple's main focus is on iOS. Furthermore, Apple Music's association with Apple probably hurts its image on other platforms like Android, giving Spotify an edge.
What I'm inferring is that Spotify can easily make up that 30% loss to Apple with other tactics just by differentiating.
Widely accused by people who do nothing at all.
I think that's a very hypothetical claim.
> Let’s be clear about what that means. Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.
I think we should be clear that Apple built the app-store ecosystem to improve its iPhone adoption and lock-in. And Spotify isn't asking to keep 100% of the revenue. Spotify is asking for a choice of letting users pay how they wish.
The problem really is Apple wants to milk its App store ecosystem now that its popular and 30% / 15% is a very steep price / revenue loss for any significant player in that eco-system. And FWIW, Google provides a similar App store service, while also allowing users to what they choose with their phones (i.e., install side-loaded Apps).
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.
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 :(
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...
https://github.com/MicrosoftDocs/windows-driver-docs/blob/HE...
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.
Everyone wants to move to the subscription service model and Apple has developed rules accordingly.
This is the same sort of rhetoric that calls dropbox a weekend project.
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).
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.
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.
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 store platform is paid by the developers when they sell the app.
We don't see the internal accounting but it's quite likely they do. 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.
Consumers pay the same price. Artists earn more. Who cares how Apple shuffles fictional numbers in their internal accounting?
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.
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 ....
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.
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)
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.
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.
And, just coincidentally, that 'protection' is very lucrative for Apple.
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.
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.
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.
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.
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
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.
It is impossible to stop the subscription. No thank you, I will trust my payments with Apple.. Esp. subscriptions.
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.
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 earliest days were before smartphones. I had Spotify on my computers before they'd even released an iPhone app.
Spotify launched on Desktop after the App Store launched.
Your link seems to say the opposite.
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.
"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.
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.
https://www.politico.com/story/2009/08/obamas-catch-phrase-l...
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.
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 of exploited artists is pretty disingenuous.
https://informationisbeautiful.net/visualizations/spotify-ap...
It’s actually more plays than that because Spotify also takes 30% of each stream payout, so it’s odd they would also complain about a 30% mechanical.
The premium accounts payout more per stream than freemium accounts.
This is also assuming the artist owns the master recording outright, wrote the entire song, and administers their own publishing and mechanical royalties. The latter being almost impossible.
More than likely if signed to a label, they will get 10% of sales, the label will get the rest. This is based on traditional album deals where you get 1 point per song. If they are also published, the publisher takes half of their performance royalties, a mere 6-7 percent of stream payout. Also the PRO(ASCAP, BMI, etc) recieves half of the mechanicals, another measly 6-7 percent. To be clear if you don’t speak music payment terms. The people that own the publishing AKA the people that actually write the song, and administer that published writing only get 12-16% per stream payout(not fair). When labels receive around 48%-58% per stream payout, this is for a specialized business loan that pays for the recording + marketing and distribution(way too much). Not to mention this loan has to be totally recouped before the artist sees any of that 10 percent, if they ever do.
To sell anything on Amazon, you are charged $40/month for a professional account, or they have an under 40 item plan with a listing fee of $.99 per item. An additional 15% is taken by them on music sales. So if you have less than 40 songs you pay $.99 a month to list them each.
Tidal's model is supposedly more literally like the proverbial "pie", where the most popular artists get the biggest cut. So if it's true that they inflate numbers for Jay Z and Beyonce, then other artists are being deprived of revenue.
I would imagine that the artists probably care even if you don't.
So instead of demanding their fair share from the labels, they go after streaming services who don't even pay them directly: all money goes through labels.
Moreover, that's the pot calling the kettle black. That's the app store in a nutshell -- Apple supplies the marketplace, but is also making a substantial chunk of money off of others’ work.
It runs on all the platforms I want it to run, including on Linux or on my Playstation, you can easily switch devices, picking up where you left off, you can remotely control devices, etc. The suggestions engine isn't spectacular, but works. I also like to see what my friends listen to. They also have the best integrations with other apps.
The music selection could use some improvement but it's much better than Apple's Music and getting better every month.
In other words your claim is very disingenuous.
Ultimately, if I use Spotify to discover an artist, I’m going to continue paying Spotify to listen to that artist and the artist themselves will be lucky to even make pennies off of that. I could move off Spotify and keep listening to that artist pretty easily, I just probably won’t. Spotify is a middleman focused on discovery but isn’t providing ongoing value to the artist once the viewer has discovered them.
Apple on the other hand is building and maintaining the platform that app creators use. This is a lot more tha discovery, the app wouldn’t even exist without the platform, and Apple keeps adding more value to the platform over time. Apple is not a middleman.
Apple created a lot of value with its first iPhone, but the world evolved since then.
And yes, in your definition, Apple too is a middleman, because a big reason for why many people buy overpriced smartphones is to use apps. That you can't move those purchases easily to another platform, that's the lock-in effect of Apple's walled garden, but that doesn't make them any less of a middleman.
Speaking of pennies, I emphasize, but how much are artists getting paid by Apple Music? Isn't this hypocrisy on their part? This whole thing is infuriating because Apple can easily undercut its competition because they don't have to pay the 30% store tax.
This is anti-competitive behavior and yes, I realize that Apple does not have a monopoly, but I think anti-trust laws should be rewritten, because this kind of behavior isn't acceptable coming from the world's richest software company, due to the infinite potential they have for harming the market.
You do realise that there are technical reasons for that.
You can't just lift an iOS, Linux, Windows, Android, PS4, Xbox etc app and just run it on a different platform. Especially if your target platform is a resource constrained one.
For example I use Gimp and Inkscape, irregardless of the OS. The experience is a little shitty on MacOS, but they get the job done.
It's also the reason for why Microsoft was able to provide the "Subsystem for Linux" on Windows 10, because the Linux kernel is much easier to mock than Windows is, being a much smaller effort than what the Wine project has to handle. Speaking of Wine, it has been doing a decent job of running Windows apps on Linux, many Windows-only games are playable on Linux due to it. And Steam has been using Wine to make games available on Linux.
iOS on the other hand is another matter entirely. First of all you don't have direct access to the binaries, without hacking the OS and Apple is doing everything they can to make that OS unhackable.
No, we are not talking of technical limitations, as those aren't insurmountable.
To be honest though, I’m less concerned about app portability as I am about retaining ownership of apps after their or the app stores support has ended. While this doesn’t really matter for mobile apps nor music streaming services, it’s something that really concern me with regards to collecting retro games. There is a lot to be said for owning physical media. But I’ve digressed.
https://mixmag.net/read/new-data-reveals-which-streaming-pla...
Everything ultimately leans on suppliers so if that's your definition everything is a middle man unless you farm crops or dig up ore or something.
Also the title Middle Man has a sort of negative conotation to it. But Spotify/Apple Music is simply a platform that can connect a artist to a listener. But this doesnt make them any more of a middleman then Netflix or the guy at Mcdonalds who cooks your Cheeseburger.
If Spotify were selling their products through retail they would probably lose about 50% of their margins.
I'm quite sure technically (at the size of the Apple Store) a digital marketplace could charge 1% and still make a profit after the operational costs.
1% instead would be $383 million a year. You think that wouldn't be sufficient to run a digital store (including the things mentioned)? Pretty sure you can do it with far less than that.
[1]: https://www.forbes.com/sites/chuckjones/2018/01/06/apples-ap...
Mobile platforms are dysfunctional markets. That's why they can charge 30% and that's why regulators will step in sooner or later.
But take a look around and you will find that there is no digital shop that acts as a merchant of record internationally for anywhere close to 1%. It's impossible and completely unrealistic even before accounting for the entire software development and distribution side.
They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. If you want your app to be available on the iPhone you have to go through the App Store. There is simply no other way (for a native app), as such you either give in 30% or you don't create an iPhone app.
I agree with that. 30% is not a plausible rate in a well functioning market. But it's not 1% either, I can guarantee you that. So what is the right revenue share?
Paddle charges 5% to act as a merchant of record for you (i.e as a reseller). That's what Apple does as well and I haven't seen that service offered for much less.
On top of that, Apple provides all the software distribution and discovery functionality. I'm not sure what the cost of that is, but it's not nothing.
So by my estimate, a realistic revenue share for Apple in a well functioning market could be in a range between 8% and 15%. But on the lower end that might mean higher fixed fees for free apps and worse support.
What they should do first of all is change the pricing structure to charge a fixed fee plus a percentage. That would allow them to cover their per transaction cost and take a far more realistic revenue cut on top of that.
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 destroying greed again and again. They are killing their own golden goose.
Could simply be that they dont know what the world will look like in 5 years so they might as well cash out while they can. No use playing the long game when the next big game changer could be around the corner?
Anyhow, they have so much money that even when regulation comes, their business will still be secured.
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 talk about “greed,” I tune out because that’s the sign of a person who doesn’t actually know what goes into running the thing they claim a company is greedy with. Take the Apple 30% fee for example. If you ran payment processing yourself through Stripe, you might pay 3%. So let’s take Apple’s remainder to 27%. Apple handles chargebacks/disputes for you. So each dispute using Stripe would cost you $15 unless you win the dispute. We also have fraud prevention and management, which Apple provides. An app developer never has to deal with fraud on the App Store. An fraud is a significant issue, especially selling globally.[1] How much is fraud worth? I would say that it’s worth at least 5% to never have to deal with it. So now the App Store commission is 23%.
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%. You can’t have any downtime or you lose money. You can’t have casual security or you’ll lose product. So that system has to be well maintained, robust, and able to handle scale, and be fast and easy for your customer.
Now we are at 18% of Apple’s commission remaining. For every product you sell worldwide, you have tax consequences worldwide, assuming you care about following the law. For every sale you get, you potentially have to remit taxes, taxes that vary by individual jurisdiction. Apple does all of that for you. They also provide a localized and internationalized store front for almost any country in the world. Want to sell your App in Vietnam? Is your infrastructure set up to reach those customers? How about your Vietnamese skills when a potential customer has a purchasing issue? How about your payment processor? Are they set up to handle how Vietnamese people like to pay for things? Can a Vietnamese person go buy a gift card and use it on their device to buy your product? With the App Store, you get all of that capability built-in. And you get that capability for pretty much every connected country. Including market exposure via App Store search and discovery. Let’s combine this point with the next, a product website. If you want to sell on your own you have to build and maintain a website to sell your app. You need to integrate payment processing, the download, security, and maintain it. While most of us have the skills to do that, you also have to ensure it’s updated, you have to pay to host it, translate it into worldwide languages (or not.) However if you actually want to sell your app, you’ll also need to worry about SEO, online marketing and attracting users to your app. Just a simple webpage isn’t going to make a dent in search results from the open web since your “premium music player” keyword will take years to rank.
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%.
So that leaves our “greed percentage” at 10%. However, we have another aspect as well. Not only do you sell a paid version, you also have a free version you use as a marketing tool to expose people to ho...
> 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.
So I am fully aware of everything you're saying and I agree with most of it in principle. I do disagree on the numbers you're using. But we are both inevitably ill-informed in the sense that neither of us has the hard numbers required to work out the true cost of running the App Store.
We do know a couple of things though:
1) The App Store is profitable. Apple has said so. Most analysts reckon that it has high and growing margins. Everything Apple says about its services business makes me believe that these analysts are correct.
2) There are only two relevant mobile app stores (perhaps 2 1/2 if you count Amazon).
3) Both charge exactly 30%
This is not a well functioning market by any definition. Dysfunctional markets like these rarely charge too little. So the assumption that they charge too much seems not too far fetched.
To me, charging 30% for every app, irrespective of its price, seems completely implausible, not just the percentage but also the structure. Any plausible pricing structure would include a fixed fee plus a percentage.
I'm not using the word "greed" in a moral sense (as is often the case). I'm using it because it is clearly an act of self harm to extract high margins in an obviously oligopolistic and dysfunctional market.
They are begging to be regulated and why would they do such a stupid thing?
You just don't have a right to distribute that code to others. And that's one of the reasons why many of us like iOS since I can almost guarantee I won't have malware, viruses etc.
That's basically capitalism in a nutshell
That's an edgy tankie teenager's definition of capitalism in a nutshell.
[1] http://imgs.fyi/img/7hut.png
And I wouldn't have a problem with that in general, except it feels dirty to claim Apple are saints for graciously allowing apps like spotify to be sold on their platform. They're already being paid for doing so through phone sales. Leveraging the monopoly they hold over the ios app store against Spotify, one of their competitors, is exactly what antitrust legislation is designed to prevent.
Whether what Apple is doing is legal or not I guess the courts will decide. But it's certainly factually incorrect to imply that you're not free to buy from anywhere else.
I really don't see this being that much different from the famous United States v. Microsoft Corp. case[1].
[1]: https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
EDIT: comments have made clear that Windows had a monopoly on the personal computer space, whereas Apple doesn't have a monopoly on the smartphone or tablet space.
It wasn't until the end of the 90s when macs started making an impression on peoples desktops, with the imac, but oddly enough if https://en.wikipedia.org/wiki/Usage_share_of_desktop_operati... is to be believed, windows still has a 95% share of the desktop/laptop market.
I'm not saying Apple is right to do this. I'm saying the monopoly on their own product is not the correct argument. Apple is not a monopoly. If they lose this case it won't be based on this.
* Contractually barring licensees from offering competing OSes, or selling boxes without Windows installed.
* Leveraging their OS dominance to get dominance in other markets such as linking OS licensing with licenses for other software.
* Pinching competitor's technology using their advantages as platform owner and rolling it into their own products (Stac).
There was more, but those were the main ones.
Such as leveraging their preferred status to get dominance for Apple Music (by being able to charge less since they aren't subject to a 30% Apple Store 'fee')?
Actually, the "Walmart is a choice" claim also only holds up if there actually are multiple stores nearby, because who is going to drive fifty miles to the next store? Food deserts are a thing.
This is a false idea of "choice" and it is just yet another way producers and sellers try to shift responsibility to the end consumer who is largely powerless in most cases.
On Android you can side-load APKs, have alternative app stores like F-Droid and even install custom operating systems. So no, that is again not comparable.
> It’s (…) not some perfidious Apple plot
Sure
> just the nature of the market
Dammit, NO. The market is a human-made artificial construct, not some natural freaking law like gravity that is inevitable and unavoidable. And given that it is human-made we can change it, and make choices on what we demand from it.
But, if I have an iPhone, the only application store I can use is controlled by Apple.
In other words: if I am an artist and I want to offer my music via streaming I have plenty of options. If one of them does have a deal that I find unfair, I can choose others.
If I am a developer and I want to offer my app to iPhone users, I have only one option. And if I am banned from this store for any policy infringement (which sometimes is ridiculous and totally arbitrary) I have no other option to offer my app to iPhone users.
I agree with Android it's slightly different because side loading is at least possible, but I doubt many people are going to find your widget if it's not on the play store.
You're not forced to have an iPhone.
For example, Google banning their apps on Windows Mobile and Amazon Firestore. Google blocking Windows Phone users from accessing maps/mail via a user-agent check. That and Google actively blocking Microsoft developing a native Youtube app.
Is it any surprise that customers were unsatisfied?
Google is rightfully scolded for requiring that users sign away their information and following their every move (often using dark patterns).
Apple should be put on hot coals too for how they are abusing their position. Spotify is an excellent illustration because Apple is both the platform and a competitor. I don't understand why an Apple consumer would support their anticompetitive stance.
It's much better than Android even without that though. Especially since Google became more aggressive with tricking users to sign away their privacy.
However I’m not suggesting that local stores are in the wrong either but it does illustrate how consumers have choice there is no such competition inside Apples walled garden. And that is the real crux of why their margins are high: it’s because developers and iPhone owners are locked into the App Store
The obvious counteragument here is that people don’t have to buy iPhones - and that is true. However people do and they still expect their app prices to be low, so developers are the ones who ultimately lose out as they either have to support Apple or be left out entirely and they’re the ones who then have to lower their prices to compete.
It’s also worth noting that the physical store, in your example, would have greater overheads than an App Store of equivalent size so Apples markup shouldn’t include the same operational cost.
There is massive competition to the garden itself.
I did already acknowledge that and pointing out why it doesn't work in practice.
In a normal high street setting manufacturers and distributors set their prices and the shops then add their mark up on time. If the prices are too high then consumers will shop in another local store. Which means those stores either have to negotiate a lower selling price or reduce their own margins (or offer an alternative incentive to shop there in spite of the high prices - like free coffee)
With iOS consumers don't have the option of going to another App Store, which then flips the order of control. It means Apple can dictate their markup and app developers are then forced to lower their own margins if they want to appear attractive to other shoppers.
Correct, it's certainly unfair competition but what I'm saying is that it's still not a monopoly, not that it's "fair". When you paid for the iPhone you also paid for the services bundle that you bought as a package. Now if Apple controlled 90+% of the market this would fall under antitrust laws (MS+IE situation all over again). But they only control 15%. Users have the option of going for the the same/equivalent service provided by other vastly more popular phones and their app store(s). So every link in the chain has a perfectly good equivalent.
And even Spotify has a choice. They can shaft Apple and become Android only, since Android has 85% of the market. The reason they're not doing it right now I assume is because they would also shaft themselves, the AppStore might bring a very big chunk of their revenue (historically iOS users are bigger spenders).
Practical example of single supplier without an actual monopoly: If you buy a GM car you're left with one option for a subscription telematics service: OnStar. You can't get Lexus Link for example. I don't think it ever occurred to anyone to call this a monopoly.
I agree - which is why I specifically did NOT call it a monopoly.
> When you paid for the iPhone you also paid for the services bundle that you bought as a package....
You're still missing my point:
> And even Spotify has a choice. They can shaft Apple and become Android only, since Android has 85% of the market. The reason they're not doing it right now I assume is because they would also shaft themselves, the AppStore might bring a very big chunk of their revenue (historically iOS users are bigger spenders).
EXACTLY. Thus Spotify effectively doesn't have a choice. It's pay Apples tax or don't have support at all.
This is compounded when you factor in that the in-app sales that Apple wants to take a cut from for businesses like Spotify are sales that Apple's had no stake in. Since you like car metaphors: it's like a taxi driver buying a car and the the dealer expecting to take a cut from all the taxi fairs even though the dealer's involvement ended the moment the car rolled off their forecourt.
> I don't think it ever occurred to anyone to call this a monopoly.
Again, I never called the App Store a monopoly. Others might have but I deliberately didn't because I'm already aware that it legally is not a monopoly. However that doesn't mean they don't still have total control over app sales on their own platform - legal terms aside.
I'm not sure I follow this. When I say choice for Spotify I mean Apple or Google. The industry still allows them to get the same service from the other 85% of the market. I interpret that as "choice", having options. When I go to Malls'R'Us to rent a storefront I only have them as a choice. But I can go to another mall without anyone claiming foul about competition.
Having no choice is when you want internet but there's only one provider. Rejecting that provider doesn't mean you get different internet, or worse. You get none.
And to pick up on the mall analogy above, some storefronts cost more than others especially if they bring in more revenue for the store. And the owner of the mall also has full control over this. Is this not an equivalent situation?
I know I now sound unsympathetic to Spotify's situation but after reading (and later validating) some of the claims Apple is making in this article I can't help but feel like Spotify kind of cheated when they published their call for action by leaving some important stuff out. I had my pitchfork out only to realize the truth is a little more nuanced.
> Having no choice is when you want internet but there's only one provider. because rejecting that provider doesn't mean you get different internet, or worse. You get none.
But ignoring Apple's App Store does mean they then get no service for "iDevices" (not just the iPhone).
So their choice on iOS is pay the tax or don't have a presence. This is complicated by the fact that they would then lose customers who want a music streaming on multiple platforms including iOS. So Spotify's choice is really just an illusion.
> But isn't this what you'd expect when renting a storefront in a mall?
Indeed it is. You usually get a little more choice because you can have different landlords in a given high street (albeit you did specifically say "mall" where that choice wouldn't exist) but even in those cases shop owners are regularly complaining that increases in rent are pushing them out of business. and in fact the UK has seen a lot of independent stores go out of business because of exactly that.
If I want my music in the Spotify catalog who decides what's my cut and what's Spotify's cut of the money my music is generating? They have 100% control there so if I want to list my music there what are my choices? Pay up or not have a presence.
Apple's choice is to give them access to millions of customers with big pockets (statistically), maintain the whole infrastructure for this, not get anything because the app is "free" but actually not even be allowed to drop them? What kind of choice is that? Should an app even be called "free" if it offers nothing without paying? Isn't that like asking for tax exemptions for a nonprofit organization that makes a profit?
Would it be OK if Apple changed the rules so apps had to offer full functionality without further paid unlocks or simply charge for the app as a service in the App Store at whatever monthly price the developer chooses?
The fact that Spotify lied or misled about these details that are pretty obscure to most people (including me until I specifically read about them) kind of disqualifies them from playing victim in my perspective. They want all the benefits with none of the strings.
Indeed. This same argument has been ranging on for years about music streaming services and ebooks via Amazon too. So it's not just Apple who get put under the spotlight.
> Apple's choice is to give them access to millions of customers with big pockets (statistically), maintain the whole infrastructure for this, not get anything because the app is "free" but actually not even be allowed to drop them? What kind of choice is that? Should an app even be called "free" if it offers nothing without paying? Isn't that like asking for tax exemptions for a nonprofit organization that makes a profit?
I think that's a little disingenuous. Apple don't chose to let app developers on board - Apple do it because their platform depends on it. Smart devices live and die depending on the developers that support it.
I also agree there is an infrastructure cost but as I said in an earlier post, it's not equivalent to the infrastructure costs of bricks and mortar despite Apple retaining the same kind of mark up. This is where people get narked off. But as I said elsewhere, I also accept Apple has the right to charge whatever they think they can get away with. I mean that's just basic business.
Your point about free apps is an interesting one however if we're honest, Apple do still make money even from free apps. Developers have to pay a small fortune to get their apps included in the App Store - from MacBook sales (if they weren't already Mac users), developer licences and app submissions. I think (but please correct me if I'm wrong here) Apple also have their own ad network for iOS as well? So they would obviously get a cut of that too. In any case I'm not trying to disagree with you here - more just say that Apple are hardly making a loss on free apps even without taking into account in-app sales.
> Would it be OK if Apple changed the rules so apps had to offer full functionality without further paid unlocks or simply charge for the app as a service in the App Store at whatever monthly price the developer chooses?
In fairness Amazon's app store states something like full functionality. I can't remember the specifics but they push back on apps that are in-app orientated in a scammy way while still allowing developers to be contributed for their work. It's a system which works pretty well - at least from an end user perspective. In fact that was one of the biggest things I missed when I "upgraded" my son's Kindle to a regular Google Play-powered Android tablet.
> The fact that Spotify lied or misled about these details that are pretty obscure to most people (including me until I specifically read about them) kind of disqualifies them from playing victim in my perspective. They want all the benefits with none of the strings.
I don't think Spotify has mislead anyone any more than Apple are misleading people. As you said, they all have an agenda - but that's just the nature of business. The question is really who's controlling the deck and are they doing so unfairly. The answer to the former is quite clearly Apple - but the jury is still out on the latter.
It's not really. Crying wolf is a bit hypocritical seeing how both engage in the exact same practices but only one is coming up with the sob story.
> I don't think Spotify has mislead anyone any more than Apple are misleading people
They came in the court of public opinion asking for fair treatment while misleading and giving half the story in their very loud complaint. They lost their moral high ground. Even worse since they're a company doing the exact same thing to artists. My point is, when you're in the same pigsty keep a low profile ;).
I agree it’s hard to argue who’s right and wrong but your opinion seems to be based purely on a knee jerk emotional reaction - which isn’t a compelling stance to take.
And it's not a kneejerk reaction. I plan on using both Apple and Spotify in the future. But anything Spotify want to get they should also give. Doe it look like they are to you?
So I really wouldn't take Apples rebuttal at face value either. It doesn't line up with what any other the other streaming services (both current nor the ones that closed shop because they simply couldn't afford the exorbitant rights being demanded) have claimed over the years, and it certainly doesn't line up with what I experienced back when I was involved in the music scene myself (which was some years ago now - but sadly it's an industry that showed no sign of adapting even then)
Not true. They can simply not offer in-app purchases. The Kindle App doesn’t pay any “tax” to Apple. Consumers have access to the Kindle App without Apple getting any “cut” of Amazon purchases even as Apple has Books.
I think this is an incorrect analogy. This is why Apple only charges for physical goods, not digital ones. The rationale is they distributed your product to customers you would never have had access to without them:
- they spend marketing dollars to get those customers;
- they develop and maintain a platform so you can run your business on it.
By simply publishing their app on the App Store, Spotify gets access to 15% richest customers of the smartphone market. If you’re charging customers for something they consume on that device, then I think it’s fair to pay a share.
That being said, I have no idea how this will play out in court. Intuitively, 30% the first year sounds like a lot of money for a distribution fee.
Would the app developers "never have access" to those consumers though? Because if the iPhone didn't exist then consumers would just use another handset. Just like we did before the iPhone and just like a significant amount of people do currently.
There's definitely a blurred line somewhere though. I agree to Apple having a fee for app sales though I think 30% is a bit steep but I agree Apple ultimately get to decide how much they want to charge. I agree that some apps might try to circumvent that fee by offering in app sales instead so Apple are trying to close off that particular loophole. However I don't agree that Spotify fall into that same category because their "in app sales" is actually a subscription service to a much larger product. However where do you draw the line?
> I think this is an incorrect analogy.
Obviously I wouldn't agree but I can completely understand why you'd say that given how open to interpretation analogies can be.
To be honest I hate posting them in debates because if you agree with the point then you'll agree with the analogy but if you don't agree with the point then you'll naturally find a reason the analogy doesn't fit. And given analogies aren't meant to be 100% representative, it means there's always plenty of ways to disprove it. Thus analogies are never persuasive in a debate. Worse still, sometimes you end up going down a rabbit hole of arguing analogies rather than discussing the actual point at hand.
For this reason, I usually try to avoid them.
What about the rationale that nobody would have bought their iPhone in the first place if it wasn't for apps?
The 30% is interesting, but so is the Verge article I read about Google lowering their fees from 30% forever to 15% forever: https://www.theverge.com/2017/10/19/16502152/google-play-sto...
I’m sure no one is in the right here, morally speaking. But as far as I can tell, big business is as far as you get from morals.
The App Store is a service rendered to its customers, the likes of Spotify. In the form of the hosting of the app, and all the backend behind that like in-app storage (iCloud). The code review and ‘security guarantee’ that Apple holds over Google and other rivals is also a cost.
IMHO this boils down to subsidy, on the part of digital services companies, publishing apps, subsidise the free and “real world” goods and services company’s that go unlevied for their participation.
It’s a bit like at carnivals, when food trucks pay to get a place, and are often expected to pay a commission on their profits too. But the charity stands, and free ‘workshops’ for kids etc. don’t pay to be their, because their providing a different service.
> Apple's walled garden is _A_ store.
Well obviously. Please quote me where I said otherwise.
> One of several.
Feel free to list all the other app stores on the iPhone.
> Spotify’s aim is to make more money off others’ work.
And Apple's aim is to make more money off that more money. It's such an obviously, laughably stupid argument they're doing there.
Although growing on the pie seems a more apt metaphor. Defending 15% fees on second-year subscription is pretty difficult. There's no marketing, very little fraud risk. It's really rent-seeking behaviour – which of course is the commercial point of the walled garden approach.
This is Apple exploiting a very lucrative market position, one that they did invest quite a lot of money in – and took quite a gamble – to create.
What's wrong with that?
https://informationisbeautiful.net/visualizations/spotify-ap...
It looks like Google Play (Google Music?) still wins for compensating artists the most so it's nice to see my choice still holds up over time.
To save people the click:
* Google Play $0.0068 * iTunes $0.0060 * Spotify $0.0044
Yes, but on mobile Spotify doesn't even provide the Marketplace -- only part of it (their own app), the other (the mobile OS, platform, payment processing, consumer trust, marketing, etc) is built by Apple and Google.
After all Google and Apple did.
But they don't.
Spotify also uses Apples infrastructure and marketing tools for its app. I dont think Ive seen any app creator up on stage at Apple events more than Spotify. Its not like Spotify will use Apples tools and ecosystem one time then stop. Its ongoing and 15% is reasonable. Apple literally changed the app store rules to accomodate Spotify and everyone knows it.
I will say that I think Spotify should be able to advertise payment outside the app.
As for payments, they all follow the same scheme more or less and redistribute about 70% of the revenue to the rightholders. If the services are priced the same, it's exactly the same for artists.
The big difference is that Spotify has a permanent free tier, which admittedly makes less money short term, but it is driving acquisition of premium users faster than any other methods. The alternative being no revenue, it's just fine. Apple on the same topic doesn't care about razor thin margins on this product, or even losses. They are a hardware vendor, so as long as they still sell their devices, they will be fine.
What markup do you think that is. For larger apps I'd imagine it's about 1500% (ie 1% covers the costs).
She called out Apple when she was at her high, now she bends to Spotify and launches exclusive content on the platform. The platform that doesn't want to pay the artists even when they have all the right.
She mightn't be a hypocrite, just she may not care as long as she's paid??
Want to talk about exploiting others work to make money, how about we start with their factories which they use to exploit other countries’ cheap labor?
And taking 30% of each transactions is exactly what you're accusing Spotify from doing, Apple.
[1] https://www.theverge.com/2019/2/6/18214331/spotify-earnings-...
I think you may want to refresh your memory on that. The subject was Apple paying artists during the trial period—when Apple itself isn't being paid. Which isn't brazenly greedy, since (a) they're not making any money during that time, and (b) that was and is still the standard. What was different about Apple was that their trial period—the period where users could subscribe to Apple Music without paying Apple anything—was 3 months, instead of the industry standard 1 month.
Swift had a legitimate complaint about not getting paid for 3 months of listening, but to describe "2 more months where listeners don't have to pay Apple a dime" as "some brazenly greedy policies" misses the mark by quite a bit.
Please Apple, pay all the open source projects that you use, a fair share of the revenue you generate on top of them.
Hypocrites.
Have you heard of "dumping"? What Apple does in its FOSS contributions is a similar thing - pour a ton of developer resources into critical FOSS projects so that they eventually control the development process and claim they are "contributing to open source", but in the end everyone that depends on these projects have to follow the direction that they set. LLVM/Clang is perhaps one exception, but even the Apple parts of that project's history have very obvious goals of undermining GCC since they hate the GPL's guts, counterbalanced by the legitimate need for a FOSS competitor to GCC that attracts enough non-Apple influence in the LLVM/Clang project to balance out the Apple influence.
I’m sorry but the whole open source claim is weak because the musicians aren’t releasing their product as free to use by anyone. Why would you otherwise need anti piracy measures like Spotify if the music was free to use to begin with?
Apple's LLVM involvement is not driven by spite towards the GPL; Apple simply needed a compiler that was compatible with their business model. Likewise they started WebKit so as not to be dependent on MS for a browser, and Swift because they wanted a successor to aging ObjC.
Apple does not have a monopoly in any market.
Steve Jobs originally tried to keep the ObjC compiler frontend to GCC proprietary but was forced to open source it due to GPL requirements. Needless to say he hated the GPL ever since that episode and of course jumped on the opportunity to fund a competitor with a non-copyleft license.
But I'm very confused how you're twisting Apple's huge contribution toward LLVM and Webkit over the years into some evil act. Even if all you want is for GCC to be the best compiler it can be, work on LLVM has contributed to that goal by raising the bar. Predictably, GCC has gotten a lot better in the past decade or so. And I'm sure competition from LLVM has helped, just like how browser performance improved remarkably across the board when Chrome first came out. And Android's UI got way better after the iPhone was first released. (It used to be awful). Competition raises all boats; and consumers benefit when that happens.
Who exactly do you imagine is hurt by Apple's open source contributions to LLVM? If clang dethrones gcc it will be because llvm gives developers what we want - a faster compiler, faster executables, better IDE support or something else. My life is made measurably better by these things. Getting all that for free? Hallelujah.
If you don't like the direction Apple (and others) set for an opensource project you care about, you're free to build your own community around a fork. Thats what you would have to do anyway if you want a project to succeed without Apple's support.
What do you want? Great, free software? You've got it. The freedom to change that software however you want? Fork away, brave coder. The ability to sell software based on your changes? Go right ahead.
So where does that anger come from? How is anyone worse off?
I'm not twisting anything into an evil act, read my words more closely.
Some of Apple's contributions to open source have been beneficial to the rest of us, because there are competitors to keep them in check in those areas they chose to do open source in.
You should have no doubt that, had those other competitors not existed, Apple's open source contributions would have been used to push a monopolistic advantage over other projects and organisations, and passed it off as "meeting their business needs".
They do not do open source out of any principle of generosity or co-operation with other projects, and much of their ecosystem is legally and technically hostile to supporting FOSS the "proper way". For example it is impossible to properly supply a GPL binary on an iPhone because in general you do not have the ability to install arbitrarily-modified versions of it, a very fundamental principle of the standard definition of Free Open Source Software.
Also I'm not sure why you cite Android vs iPhone since near-everything about an iPhone is proprietary.
And even in the absence of competitors, how is new permissively licensed opensource software a bad thing? How, exactly do you weaponise opensourcing decent software which has no competitors? Can you give some examples?
iPhone was released before Android.
Every Linux box that is connected to a printer (specially networked printers) runs CUPS in part by Apple.
Also, FreeBSD is a small part of macOS, contrary to what some people want other people to believe, and FreeBSD is not in that camp of GPLv3, so no, FreeBSD is not on that disgusting echo chamber leaded by Stallmann
CUPS was an independent project before Apple bought it, and we haven't exactly seen major improvements since the sale.
I get it: I had an open source project that HP built a product around many years ago, but modulo a couple of patches from them, we saw nothing. Didn’t bother me: we knew when we open sourced it, anything that was done with it was out of our hands.
The best I’d expect from a company using open source is that they be good open source citizens and contribute back. Apple has. clang, WebKit, etc....
They benefit substantially from open source and give very little back in concrete financial terms, yet complain that Spotify is asking the same thing and portray them as freeloaders. In reality, Apple are doing far more freeloading off of other projects than Spotify is doing off of them, legal or no.
What Apple have created in the App Store (a software package repository on an OS platform) is a monopolistic trust over what should be a free marketplace, like how regular GNU/Linux package repositories have worked for decades. This is exactly what "anti-trust" is supposed to prevent and the DoJ need to have the balls to start breaking up tech companies for this shit, just like they almost did to Microsoft.
You cannot make any moral assumptions here because the whole point of many of these open-source projects is that people can use them freely, with no obligation - moral, or otherwise - to contribute back.
> should be a free marketplace, like how regular GNU/Linux package repositories have worked for decades.
Yup, this'll end beautifully. It won't devolve into a malware-ridden mess that destroys the privacy and security of users. The users that pay for a curated ecosystem and idiot-proof privacy/security.
Package repositories might be great for the HN crowd. But I think it's fairly blind to think it won't harm Apple's target audience.
I'm not making any moral assumptions. I'm just pointing out the hypocrisy of Apple's moral assumptions that they're making in their posting.
> It won't devolve into a malware-ridden mess that destroys the privacy and security of users.
Windows, GNU/Linux, and in fact Mac OS X itself, are all doing fine. The real security problem is elsewhere, it is disingenuous to use this as an excuse for monopolistic practises.
Apple's 'moral assumption' is that Spotify would like to 'freeload' off of their store. The App Store is provided with the intent that services which are based off of it contribute back to the App Store.
Open-source software is not provided with the 'moral assumption' that users contribute back.
There is no hypocrisy here. Apple is criticizing Spotify for trying to sidestep the moral expectations of the App Store, but Apple itself is not sidestepping moral expectations of the open-source products it uses.
> Windows and GNU/Linux are doing fine.
Are they? In what context? Do you really think Windows does "fine" for the average user, and that they are not at a huge risk of malware, terrible software, and more?
It's also disingenuous to say that security problems are not in large part caused by how open available distribution channels are. We have proof showing that the App Store has provided an objectively more secure environment for the average user than Windows or even the repository model.
No, the App Store is provided to drive iPhone sales. If you couldn't install third-party apps on iPhones, no one would buy one nowadays. The market has changed drastically since the iPhone's launch, when a public SDK was still unavailable.
> We have proof showing that the App Store has provided an objectively more secure environment for the average user than Windows or even the repository model.
I'm not convinced that's true. Apple has also invested heavily into app/process isolation on iOS itself, and a permissions model that keeps apps away from sensitive data without the user's consent.
Not to mention the fact that it's more the review process that keeps malicious apps off the phone. Google Play Store is also an app store, but they don't review apps anywhere nearly as closely.
Either way, an app store is not a prerequisite for a review process.
If Spotify was not available on the iPhone, because Apple wants to push Apple Music, I would ditch the iPhone, not Spotify.
I imagine losing Spotify wouldn't cause every Spotify user to ditch the iPhone, but I'm sure there are others like you. And many people likely have some other app that they'd consider ditching the iPhone for if it was pulled.
A healthy app ecosystem is a big part of what drives iPhone sales.
Heck wechat even had its own mini app store.
Also, Apple itself accepts wechat as a payments method, so it's a payment processor.
That's a bizarre analogy. The analogy would be that Google not only takes money from PnG for showing you an ad for Head and Shoulders, but then charges forces PnG to sell you the shampoo through Google AND takes a 30% cut on the revenue.
Having read both Spotify's and Apple's claims, I am confused. Both seem legit.
Both sides are exaggerating: Spotify's claims that Apple is blocking their apps and preventing them from shipping features are likely bogus, while Apple's claims that they don't selectively implement rules when doing app review is false as well.
It also fails to address the most important points from Spotify, which I thought were: you have no choice but to use the apple store, and promoting your own payment is not allowed. Fix one of those and most people would be happy.
When we reached out to Spotify about Siri and AirPlay 2 support on several occasions, they’ve told us they’re working on it, and we stand ready to help them where we can.
So they won't even address the elephant in the room, the fact that their own service has preferential treatment?
1. https://www.apple.com/hotnews/thoughts-on-flash/
You can see this everywhere from Apple.com to this letter.
Everyone would benefit from seeing what both Apple and Spotify are paying to the carriers for these bundling deals.
- Spotify only started signing up independent artists since 2017 or so [1] [2]
- Even there Spotify recommends you upload music through aggregators or labels [3] (I'm not even sure if you can get there as an artists without going through a label or a distributor)
> That is the problem with the music industry and their label signing deals.
The music industry has no other options but sign deals with labels. Because the major labels control the catalog of music that people listen to. Almost anything even remotely popular you listen to belongs to them: from Taylor Swift to Beatles, from Drake to Iron Maiden, from One Direction to Pink Floyd etc.
And the industry is too scared to say anything against the labels for fear of retribution. You go against Warner Music, they pull their content, and goodbye Slipknot, R.E.M., Skrillex, Red Hot Chilli Peppers, Muse, Ed Sheeran, Eric Clapton, Ghorillaz, ... [4] You go against Sony, and... etc.
[1] https://en.wikipedia.org/wiki/Spotify#Spotify_for_Artists
[2] https://artists.spotify.com
[3] https://artists.spotify.com/guide/your-music
[4] https://store.warnermusic.com/all-artists
1. 15-30% is a fair “contribution to maintaining the App Store ecosystem” which has led to Spotify’s “dramatic growth.”
2. Spotify is greedy and bad, just look at how they squeeze artists, unlike us.
The second point is really weak considering that paying such a high fee to Apple, which Apple Music itself doesn’t have to pay, might force Spotify to take it out of the artists’ end to stay afloat.
And as to the first point, Apple makes it sound like the App Store was the reason for Spotify’s success, so it’s only fair they take a healthy cut. But there’s no other choice on iOS. It’s not clear if discovery in the App Store was essential to Spotify’s growth or if it was just the only way to install software on iPhones.
One need only look at macOS to determine how important the App Store is to discovery and growth. Many, perhaps most developers bypass it.
Spotify is a free App and there are no IAPs.
All costumers that use Spotify in Apple devices have to pay through the WWW, carriers, gift cards, etc.
Spotify is a piece of shit that wants to use Apple's network for free. Because they know people trust Apple with their CCs more than them.
bunnycom's reply to you is flagged dead, but there's an important rebuke to that claim: Spotify doesn't use iAP for subscriptions any more, and Apple gets no money off of Spotify today except for pre-existing subscriptions from before Spotify disabled iAP: https://support.spotify.com/us/account_payment_help/subscrip...
So I think it's a bit specious to say Spotify has to squeeze artists more to pay Apple's fees, when they're not even paying those fees any more.
And I'd venture to say the iAP process really does help growth of apps like Spotify: it lets you use a single credit card you have linked to your iTunes account for all in-app purchases with just TouchID/FaceID, and is a much lower-friction way of paying money to an app than filling in your credit card information into every app, having to change them all when your card expires, etc. I wouldn't say it's worth a 30% (or even 15%) cut, but it's not worthless.
Sure. By that logic Apple also “helps the growth” of Uber by offering the same convenient payment method in the form of Apple Pay. Their fee for that: 0.15%.
Charging 15-30% is clearly about more than “helping growth”.
And Apple isn’t just charging for the convenience of IAP. They’re also frustrating Spotify from collecting payment any other way. The specious argument here is saying that strangling premium subscription growth doesn’t hurt a company’s finances.
Apple says most apps contribute nothing to the app store. This is false. To list an app on the app store developers must pay, yearly, for the privilege. This is important because a reasonable person could make the argument that _this_ is a more fair model and one more in line with providing the actual service of the app store.
Apple,rightly IMO, has accused Spotify if wanting to have it's cake and eat it too, but charging a fee to list and taking a percentage of revenue could easily be seen as the same.
Apple has Apple Music, has more music than Spotify and even if there is a track on Spotify and not in Apple Music, you can upload your own MP3s and stream them. I have a gigantic collection of Soundtracks and indie music there.
I use Spotify because they're independent and support a large number of devices. This is just like how I use Sonos because they're independent and support a large number of services.
Apple benefits greatly from having high quality, third party applications on iOS. Wasn't the lack of third party apps/support one of the big issues with Windows Phone?
Windows Phone failed primarily because it didn't offer anything that Android or iOS couldn't offer.
Just the fact they have human curatorators that really know what they are doing, is telling.
https://developer.apple.com/app-store/subscriptions/#revenue...
Then there's the notion that Apple is competing with its own customers in the appstore. And when it comes to Spotify, Apple Music is a direct competitor but I doubt they charge them 30% of revenue. They have a huge conflict of interest. Pretending that they are even remotely neutral is ludicrous. They block competing browser technologies; technology stacks not favorable to them; content they don't like; business models they don't like; etc.
And then the infamous Apple tax is of course very lucrative for Apple. Calling others greedy while charging this much while actively competing against them is simply arrogant. Spotify has delivered lots of revenue to Apple over the years. It seems Apple feels entitled to a huge chunk of this revenue and to the privilege of unfairly competing with them at the same time.
This company (and others like it, cough Amazon) deserve to be scrutinized for their anti competitive practices.
Overall I'm shocked by the level of hubris coming from Apple. The app store is a mutually beneficial ecosystem for all parties, but they make it sound like they are doing the world a huge favor by running it.
Wow, Apple's response is rather arrogant. Apple seems to forget that without apps like Spotify, and those it said "contribute nothing to the app store", app store won't grow to what it is today. I am pretty sure that Spotify is willing to distribute outside AppStore if you give it a choice.
* the app store is successful thanks to apps like Spotify
* Spotify is successful thanks to the app store
I think the second premise tends to be more accurate to the case. If I make the most used app in the world today, I cannot take credit for pumping the success of the app store, because it was already there when I launched my app.
In either case, it's Apple yard, they set the rules and charge what they want. Don't place your main source of income in another person's yard.
It's too late. Had people known it would become what it is today, nobody in their right mind would build apps for it. Not me at least.
So Spotify complains that the rules are draconian and the response is that everyone has to follow them? If anything, it requires getting to a certain size to have your complaints addressed like this, even if they are hand waved away as consistently applied.