So you’ve heard about the Spotify and Apple fight by now I presume. If you haven’t, here’s a short summary. Spotify released an update to their app on the Apple App Store in May that allowed their subscribers to shift from Apple’s payment service ($12.99) to the web payment service ($9.99) which is $3 cheaper. The difference in price is due to Apple taking 30% of revenue generated from the app subscription as part of its rules. As you would imagine, Spotify’s little stunt didn’t go down well with Apple and they rejected the update.
A month later, on June 10, the massive music service provider released another update and that was rejected too, reportedly over the same issue. Now Spotify says that this is mainly due to Apple’s growing anti-competitive policies in favour of Apple Music. Apple says this is false and that any attempts to “circumvent” the in-app purchasing system or Apple’s billing system is a strict violation of the App store rules.
Now Apple is right in that its rules have always maintained that no app may attempt to avoid the in-app purchasing system by displaying buttons or links of any kind and that’s exactly what Spotify did. Spotify says that’s not true since the ad that is displayed only informs users that they need to upgrade to premium to avail a certain premium feature. However, Apple responded to this by saying that if you tap the ad enough times, then this shows up:
This is a clear violation of Apple’s rules and Spotify is trying to sneakily avoid this to attract more customers. Apple hammered home the ethical side of the argument by saying that Spotify had greatly benefitted from their App store, getting 160 million downloads to date. Apple also specified that the 30% cut that they take gets reduced to 15% after a year of subscription based services.
Now here’s where the picture gets a little murky. Spotify is technically wrong but it has a point. The one big reason that Apple is insisting Spotify abide by their rules is to keep the price of the app higher than that of Apple Music. Apple could just delete the app from its store but that would generate sympathy for Spotify, Apple is dragging this out in to the public to make sure they come out on top, perhaps to generate goodwill and by extension more purchases for the Apple Music app? Okay maybe that’s a step too far in to conspiracy theory land. But at the end of the, revenue is the main driver for all of this.
Apple’s App store rules have led to it generating $10 billion through it in 2013 and $20 billion in 2015*. But it has also paid $40 billion to app developers so it’s no scrooge. And it is this reason that Apple can not change its stance because then it would have to bend the knee for everyone else. And that means lighter pockets.
Spotify has over 30 million subscribers and Apple Music has about half that.