6 ms·

Spotify: Apple rejected our app update to drive iPhone users to Apple Music

40 points by dragonbonheur 10y ago

nathancahill 10y ago
Links to http://www.recode.net/2016/6/30/12067578/spotify-apple-app-store-rejection http://www.recode.net/2016/6/30/12067578/spotify-apple-app-s...
robmcm 10y ago
Title should not say "iMusic", but "Apple Music" like in the linked article.
- deleted 10y ago
  [deleted]
koenigdavidmj 10y ago
I'm surprised so many businesses ever got convinced to work with a company that can shut down your entire business on a whim, with no recourse.
- sosuke 10y ago
  Sounds like the same comments I see when Google changes their search algorithms.
  - alttab 10y ago
    Yeah, if your entire product's strategy relies on someone elses platform and you don't have multiple income streams, or ways to acquire customers, you'll be exposed to these sorts of things. I wonder how big Spotify's android base is. I know they get my $10 a month.
  - kowdermeister 10y ago
    That's very different. You can exist without a good SERP, you can buy ads, acquire users elsewhere, but you can't exists outside the Appstore on the scale Spotify plays.
- VladKovac 10y ago
  They have a big market share, they protect the IP, and they are technically beholden to their clients. Why wouldn't you do business? The cost-benefit for Apple probably always leans towards "Hope competitor X fails".
- xoa 10y ago
  Can you explain why you're surprised? Are you surprised that companies have long worked in/with non-democratic countries as well, where some or all of their operations could be shut down or taken at the whim of someone in power? It all ultimately just comes down to another risk/benefit analysis, simple as that. Every player evaluates how likely they are to face problems with their given business model, how potentially valuable the market in question is, and what levers they have to exert, then tries to price in a premium to reflect that. If they make more money in the end then it costs it's a win, and the iOS platform represents a very large set of users with a relatively uniform platform (good for costs) and greater-then-proportional economic power (iOS users aren't a random sample of the population, by virtue of the cost of entry they're likely to have higher amounts of disposable income). Of course businesses will see profit potential there, even with Apple's many, many issues. >with no recourse Isn't quite correct either. As in other closed markets, there are more levers then just official rules to pull on, particularly for large organizations with significant resources and followings. Apple as a business has their own cost/benefit and risk/reward assessments to make too. The first, as Spotify is doing right here (and as other app developers under iOS have done before), is to simply try to make it a significant public relations issue. Apple is not an actual country, and their stickiness is in fact limited. People can leave, or perhaps of more concern to Apple given their growth goals, people can simply never sign up in the first place (earning a first customer is always more difficult then keeping an existing one, and most of the low hanging fruit has long since been picked). Significant backlash can and has caused policy changes or at least individualized reversals in the past. This is more feasible precisely because of the arbitrary nature of Apple's decisions: if they wanted to create an individualized exception for Spotify nothing stops them. Second, Spotify is a big enough player that they can flat out threaten to degrade service or leave if the cost becomes too much, which may be an influencer for future purchasers. They can multiply this if they can get other similar services to do the same, work to fight Apple Music (via exclusivity deals etc), and so on. That leaves Apple to do math on whether the (frankly minimal) revenue stream they get from their 30|15 cut on subscription revenue is worth even a minor blemish on their hardware sales and the network effects they get from a bigger platform in general. Third, the spectre of government regulators absolutely lurks in the background for something like this. Not all jurisdictions have the same rules or enthusiasm when it comes to monopoly investigations, but Apple is global and can't afford to fully retreat from any major market unless it represents an existential threat to them. Even if they'd ultimately be victorious, the mere threat of the EU for example going after them is something they have to take seriously. Apple historically has seen software & services primarily through the lens of driving hardware/platforms rather then a core revenue source in their own right, which means the upside for them vs a nasty judgement are much more limited. I personally feel like exclusively closed platforms like iOS should be flat-out illegal, that users should have the ability to opt-in to a sideloading key (with risks therein accounted for of course), but that's beside the point here. There may always be markets where major players have the ability in principle to stomp on players beneath them, but in practice other players will aim for them anyway.
- jeffwass 10y ago
  It's not much different to businesses that make products which are sold at big box stores like WalMart or Home Depot, which have the final say on which products they want to sell in their own stores. One difference here is that by following the rules, anyone could have their product sold in the Apple Store. Meanwhile Target or WalMart would only offer mens socks from a very small number of different suppliers.
  - mikeash 10y ago
    Another difference is that you can sell your product in Wal-Mart or Target or K-Mart or Sears or independent shops or even set up shop yourself. With Apple, you spend a bunch of effort building an app, and then your (legitimate) options are to distribute it through the App Store, or give up. It's easy to understand why companies are willing to enter into the App Store even though Apple can potentially sink them at any time. The reward is, to them, worth the risk. How much money has Spotify made over the years from iOS users that they wouldn't have made if they had decided not to even risk Apple's displeasure? And of course this current problem will be resolved quickly enough without wrecking Spotify's business.
- stephenr 10y ago
  > work with a company that can shut down your entire business on a whim, with no recourse Except, the "whim" here was Spotify deciding to deliberately break the rules they've been following thus-far, in order to create a media circus, at a time when Apple has announced a huge reduction in the effective costs they'd have (15% instead of 30% cut of subscription fees) But yeah, Apple just said "fuck you Spotify" on a whim.
dkuntz2 10y ago
When you start an article telling me to read an awful book that tries to tell me it's allegorically easy for a company to turn into a dystopian ruler of all, you seem more than a little alarmist. Regardless of the rest of the content.
TheSoftwareGuy 10y ago
This sounds like spotify is trying to stir up a public outrage, so it can get around the rules apple applies to everybody.
- Someone 10y ago
  I agree. The follow-up question is whether to applaud or deride them for it. Uber and Airbnb, for example, do the same in their markets, and get applause for doing it, at least from some people. Apple/iOS is a weird case, on the one hand Apple's market share is small, which would mean that one could say Spotify is playing mean (for example, would it allow Apple to advertise on their platform?) On the other hand, Apple is in the same market as Spotify, and has more of the wealthy customers. For now, I side with Apple in this case, but that may be because I do not know enough details of what this is about.
- ewzimm 10y ago
  It's kind of amazing how well it works. I completely understand consumers being upset about anti-consumer behavior from businesses, but competitors using every tactic they can get away with to out-compete each other, especially enforcing established contracts, is expected behavior. Nobody wants monopolies, but the phenomenon of people swearing off a brand forever because they try to make use of their business advantages is fascinating. It might be a sign of a need for someone to intervene to level the playing field, but I'd never be personally offended by it.
caruana 10y ago
As an Apple and Spotify customer I will quickly stop being an Apple customer if they try to control / influence Spotify. I use it all day at work and at home on my Sonos. I never knew that if challenged I would be more loyal to a music streaming company then my main hardware providing company, but, it would be a non negotiable issue for me.
- mynegation 10y ago
  I share the sentiment. Apple has done enough stupid things already so that I considered switching away from it many times. Spotify for me is big enough to get me over the fence.
- peyton 10y ago
  I think you're right--Apple shouldn't control/influence Spotify. The issue here sounds different: Spotify has to play by the same rules as everyone else on the App Store, and Spotify seems not to like that.
  - latortuga 10y ago
    No they don't! There's no reason Spotify can't pull their app, run an ad campaign, put pressure on Apple, negotiate a better deal, any number of other things. If Spotify thinks they can claw back part of the 30% apple tax, more power to them.
    - stephenr 10y ago
      It's 15% not 30%. What you're calling for is preferential treatment because they're an established player, which is quite humerous to me given how much HN loves "disrupters"
      - mightykan 10y ago
        It is 30% for the first full year of the subscription, which is reduced to 15% after that year.
    - 10y ago
djrogers 10y ago
Spotify made changes to their app that violate the App Store rules they've been playing along with for many many years. Specifically around App Store subscriptions and advertising out-of-app purchase options inside your app. I'm not defending or denigrating the App Store rules here, but make no mistake - this is a deliberate move on the part of Spotify to cause a controversy. What's with iMusic in the title? That's not a product, it's not in the linked article, and it's not common shorthand for Apple Music. -- edit: thanks for fixing the title
- lnanek2 10y ago
  Yeah, amusingly, even Google Play has rules against third party payment processors. So Apple's behavior cracking down on directing app users to go pay somewhere else than the app store isn't even Apple specific.
  - Etzos 10y ago
    Actually... There's a specific exemption for this kind of thing[0] on Google Play. [0] https://play.google.com/about/monetization-ads/ https://play.google.com/about/monetization-ads/ Edit: Relevant section: "Developers . . . must use Google Play In-app Billing as the method of payment, except [when] . . . payment is for digital content that may be consumed outside of the app itself (e.g. songs that can be played on other music players)" Edit 2: To clarify, Spotify services are available outside of the app itself so I'm fairly certain they can avoid using Google Play's In-app Billing if they so desired. I have no idea if they actually do or not or if Google would actually have a problem with this or not.
daveilers 10y ago
What Spotify would like is to be able to not pay Apple for use of its store. It would be as if a product inside a Walmart demanded to be allowed to put up a display INSIDE Walmart of their product with a large sign saying instead of buying our mop for $13 here, come out to the parking lot and I'll sell it to you for $10.
- mikeash 10y ago
  The App Store is not a Wal-Mart. Wal-Mart doesn't let people use its store to give stuff away for free, for example, while Apple has no problem with free apps that never require payment for anything. Wal-Mart also isn't the sole source for products which work with another kind of product, they're just a store, little different from other big stores. The App Store is the sole source for software that runs on iPhones, and it exists mainly to drive iPhone sales, the revenue from the App Store itself is insignificant.
  - tdy721 10y ago
    Apple requires all developers to pay $99/yr to publish any applications, even free ones. They are strictly pay to play. Also, App Store revenue is certainly not "insignificant", we're talking $Billions of dollars for Apple here... https://techcrunch.com/2014/01/07/apple-10b-in-app-store-sales-in-2013-15b-paid-out-to-developers-to-date/ https://techcrunch.com/2014/01/07/apple-10b-in-app-store-sal...
    - mikeash 10y ago
      Good point on the $99/year. Still, good luck convincing Wal-Mart to let you user their stores as a distribution point for your free stuff for a low annual payment. Apple is big enough that billions can easily be insignificant. According to that article, they've paid out $15 billion total to developers. That means that Apple's cut has been about $6.5 billion. That's over a period of eight years, so somewhat less than $1 billion in revenue per year. Currently Apple is making $10-20 billion per quarter in profit, with yearly revenues beyond $200 billion.
- 10y ago
wishinghand 10y ago
Amazon does something similar regarding stepping around the 30% Apple fee with Comixology and their ebook offerings- you can access them on the app, but you have to buy them on a web browser. I can't recall if they explicitly say "go outside the app store to buy" or not though.
sctb 10y ago
Previously: https://news.ycombinator.com/item?id=12009990 https://news.ycombinator.com/item?id=12009990

40 points by dragonbonheur 10y ago

Links to http://www.recode.net/2016/6/30/12067578/spotify-apple-app-store-rejection http://www.recode.net/2016/6/30/12067578/spotify-apple-app-s...

robmcm 10y ago

Title should not say "iMusic", but "Apple Music" like in the linked article.

deleted 10y ago
[deleted]

koenigdavidmj 10y ago

I'm surprised so many businesses ever got convinced to work with a company that can shut down your entire business on a whim, with no recourse.

sosuke 10y ago
Sounds like the same comments I see when Google changes their search algorithms.
- alttab 10y ago
  Yeah, if your entire product's strategy relies on someone elses platform and you don't have multiple income streams, or ways to acquire customers, you'll be exposed to these sorts of things. I wonder how big Spotify's android base is. I know they get my $10 a month.
- kowdermeister 10y ago
  That's very different. You can exist without a good SERP, you can buy ads, acquire users elsewhere, but you can't exists outside the Appstore on the scale Spotify plays.
VladKovac 10y ago
They have a big market share, they protect the IP, and they are technically beholden to their clients. Why wouldn't you do business? The cost-benefit for Apple probably always leans towards "Hope competitor X fails".
xoa 10y ago
Can you explain why you're surprised? Are you surprised that companies have long worked in/with non-democratic countries as well, where some or all of their operations could be shut down or taken at the whim of someone in power? It all ultimately just comes down to another risk/benefit analysis, simple as that. Every player evaluates how likely they are to face problems with their given business model, how potentially valuable the market in question is, and what levers they have to exert, then tries to price in a premium to reflect that. If they make more money in the end then it costs it's a win, and the iOS platform represents a very large set of users with a relatively uniform platform (good for costs) and greater-then-proportional economic power (iOS users aren't a random sample of the population, by virtue of the cost of entry they're likely to have higher amounts of disposable income). Of course businesses will see profit potential there, even with Apple's many, many issues. >with no recourse Isn't quite correct either. As in other closed markets, there are more levers then just official rules to pull on, particularly for large organizations with significant resources and followings. Apple as a business has their own cost/benefit and risk/reward assessments to make too. The first, as Spotify is doing right here (and as other app developers under iOS have done before), is to simply try to make it a significant public relations issue. Apple is not an actual country, and their stickiness is in fact limited. People can leave, or perhaps of more concern to Apple given their growth goals, people can simply never sign up in the first place (earning a first customer is always more difficult then keeping an existing one, and most of the low hanging fruit has long since been picked). Significant backlash can and has caused policy changes or at least individualized reversals in the past. This is more feasible precisely because of the arbitrary nature of Apple's decisions: if they wanted to create an individualized exception for Spotify nothing stops them. Second, Spotify is a big enough player that they can flat out threaten to degrade service or leave if the cost becomes too much, which may be an influencer for future purchasers. They can multiply this if they can get other similar services to do the same, work to fight Apple Music (via exclusivity deals etc), and so on. That leaves Apple to do math on whether the (frankly minimal) revenue stream they get from their 30|15 cut on subscription revenue is worth even a minor blemish on their hardware sales and the network effects they get from a bigger platform in general. Third, the spectre of government regulators absolutely lurks in the background for something like this. Not all jurisdictions have the same rules or enthusiasm when it comes to monopoly investigations, but Apple is global and can't afford to fully retreat from any major market unless it represents an existential threat to them. Even if they'd ultimately be victorious, the mere threat of the EU for example going after them is something they have to take seriously. Apple historically has seen software & services primarily through the lens of driving hardware/platforms rather then a core revenue source in their own right, which means the upside for them vs a nasty judgement are much more limited. I personally feel like exclusively closed platforms like iOS should be flat-out illegal, that users should have the ability to opt-in to a sideloading key (with risks therein accounted for of course), but that's beside the point here. There may always be markets where major players have the ability in principle to stomp on players beneath them, but in practice other players will aim for them anyway.
jeffwass 10y ago
It's not much different to businesses that make products which are sold at big box stores like WalMart or Home Depot, which have the final say on which products they want to sell in their own stores. One difference here is that by following the rules, anyone could have their product sold in the Apple Store. Meanwhile Target or WalMart would only offer mens socks from a very small number of different suppliers.
- mikeash 10y ago
  Another difference is that you can sell your product in Wal-Mart or Target or K-Mart or Sears or independent shops or even set up shop yourself. With Apple, you spend a bunch of effort building an app, and then your (legitimate) options are to distribute it through the App Store, or give up. It's easy to understand why companies are willing to enter into the App Store even though Apple can potentially sink them at any time. The reward is, to them, worth the risk. How much money has Spotify made over the years from iOS users that they wouldn't have made if they had decided not to even risk Apple's displeasure? And of course this current problem will be resolved quickly enough without wrecking Spotify's business.
stephenr 10y ago
> work with a company that can shut down your entire business on a whim, with no recourse Except, the "whim" here was Spotify deciding to deliberately break the rules they've been following thus-far, in order to create a media circus, at a time when Apple has announced a huge reduction in the effective costs they'd have (15% instead of 30% cut of subscription fees) But yeah, Apple just said "fuck you Spotify" on a whim.

dkuntz2 10y ago

When you start an article telling me to read an awful book that tries to tell me it's allegorically easy for a company to turn into a dystopian ruler of all, you seem more than a little alarmist. Regardless of the rest of the content.

TheSoftwareGuy 10y ago

This sounds like spotify is trying to stir up a public outrage, so it can get around the rules apple applies to everybody.

Someone 10y ago
I agree. The follow-up question is whether to applaud or deride them for it. Uber and Airbnb, for example, do the same in their markets, and get applause for doing it, at least from some people. Apple/iOS is a weird case, on the one hand Apple's market share is small, which would mean that one could say Spotify is playing mean (for example, would it allow Apple to advertise on their platform?) On the other hand, Apple is in the same market as Spotify, and has more of the wealthy customers. For now, I side with Apple in this case, but that may be because I do not know enough details of what this is about.
ewzimm 10y ago
It's kind of amazing how well it works. I completely understand consumers being upset about anti-consumer behavior from businesses, but competitors using every tactic they can get away with to out-compete each other, especially enforcing established contracts, is expected behavior. Nobody wants monopolies, but the phenomenon of people swearing off a brand forever because they try to make use of their business advantages is fascinating. It might be a sign of a need for someone to intervene to level the playing field, but I'd never be personally offended by it.

caruana 10y ago

As an Apple and Spotify customer I will quickly stop being an Apple customer if they try to control / influence Spotify. I use it all day at work and at home on my Sonos. I never knew that if challenged I would be more loyal to a music streaming company then my main hardware providing company, but, it would be a non negotiable issue for me.

mynegation 10y ago
I share the sentiment. Apple has done enough stupid things already so that I considered switching away from it many times. Spotify for me is big enough to get me over the fence.
peyton 10y ago
I think you're right--Apple shouldn't control/influence Spotify. The issue here sounds different: Spotify has to play by the same rules as everyone else on the App Store, and Spotify seems not to like that.
- latortuga 10y ago
  No they don't! There's no reason Spotify can't pull their app, run an ad campaign, put pressure on Apple, negotiate a better deal, any number of other things. If Spotify thinks they can claw back part of the 30% apple tax, more power to them.
  - stephenr 10y ago
    It's 15% not 30%. What you're calling for is preferential treatment because they're an established player, which is quite humerous to me given how much HN loves "disrupters"
    - mightykan 10y ago
      It is 30% for the first full year of the subscription, which is reduced to 15% after that year.
  - 10y ago

djrogers 10y ago

Spotify made changes to their app that violate the App Store rules they've been playing along with for many many years. Specifically around App Store subscriptions and advertising out-of-app purchase options inside your app. I'm not defending or denigrating the App Store rules here, but make no mistake - this is a deliberate move on the part of Spotify to cause a controversy. What's with iMusic in the title? That's not a product, it's not in the linked article, and it's not common shorthand for Apple Music. -- edit: thanks for fixing the title

lnanek2 10y ago
Yeah, amusingly, even Google Play has rules against third party payment processors. So Apple's behavior cracking down on directing app users to go pay somewhere else than the app store isn't even Apple specific.
- Etzos 10y ago
  Actually... There's a specific exemption for this kind of thing[0] on Google Play. [0] https://play.google.com/about/monetization-ads/ https://play.google.com/about/monetization-ads/ Edit: Relevant section: "Developers . . . must use Google Play In-app Billing as the method of payment, except [when] . . . payment is for digital content that may be consumed outside of the app itself (e.g. songs that can be played on other music players)" Edit 2: To clarify, Spotify services are available outside of the app itself so I'm fairly certain they can avoid using Google Play's In-app Billing if they so desired. I have no idea if they actually do or not or if Google would actually have a problem with this or not.

daveilers 10y ago

What Spotify would like is to be able to not pay Apple for use of its store. It would be as if a product inside a Walmart demanded to be allowed to put up a display INSIDE Walmart of their product with a large sign saying instead of buying our mop for $13 here, come out to the parking lot and I'll sell it to you for $10.

mikeash 10y ago
The App Store is not a Wal-Mart. Wal-Mart doesn't let people use its store to give stuff away for free, for example, while Apple has no problem with free apps that never require payment for anything. Wal-Mart also isn't the sole source for products which work with another kind of product, they're just a store, little different from other big stores. The App Store is the sole source for software that runs on iPhones, and it exists mainly to drive iPhone sales, the revenue from the App Store itself is insignificant.
- tdy721 10y ago
  Apple requires all developers to pay $99/yr to publish any applications, even free ones. They are strictly pay to play. Also, App Store revenue is certainly not "insignificant", we're talking $Billions of dollars for Apple here... https://techcrunch.com/2014/01/07/apple-10b-in-app-store-sales-in-2013-15b-paid-out-to-developers-to-date/ https://techcrunch.com/2014/01/07/apple-10b-in-app-store-sal...
  - mikeash 10y ago
    Good point on the $99/year. Still, good luck convincing Wal-Mart to let you user their stores as a distribution point for your free stuff for a low annual payment. Apple is big enough that billions can easily be insignificant. According to that article, they've paid out $15 billion total to developers. That means that Apple's cut has been about $6.5 billion. That's over a period of eight years, so somewhat less than $1 billion in revenue per year. Currently Apple is making $10-20 billion per quarter in profit, with yearly revenues beyond $200 billion.
10y ago

wishinghand 10y ago

Amazon does something similar regarding stepping around the 30% Apple fee with Comixology and their ebook offerings- you can access them on the app, but you have to buy them on a web browser. I can't recall if they explicitly say "go outside the app store to buy" or not though.

sctb 10y ago

Previously: https://news.ycombinator.com/item?id=12009990 https://news.ycombinator.com/item?id=12009990