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Apple is most likely using predatory pricing against Spotify which is illegal [0]. I highly doubt Apple music is profitable at a price point of $10 once the 30

by mrep 8y ago

Apple is most likely using predatory pricing against Spotify which is illegal [0]. I highly doubt Apple music is profitable at a price point of $10 once the 30% cut is taken into account. But since they also get the 30% cut back, they can subsidize their product while Spotify has to charge $10 at a loss or price it at $14 which is more than Apples price and makes the un-competitive. [0]: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing

throwawaymath 8y ago
I don't think you've substantiated your first claim just by linking to the Wikipedia article about predatory pricing. Even the Wikipedia article admits that the devil is in the details, as it were; it's hard to distinguish between anticompetitive pricing and competitive pricing. You're correct that Apple Music may be a loss leader, but even if it is a loss leader, there's significantly more nuance involved before we can declare it to be predatory pricing.
Spivak 8y ago
> But since they also get the 30% cut back. That's not how that works. If you charge $50/hr as a freelance software developer and you work on your own stuff for a day you didn't "get $400 back", you paid $400 in opportunity cost.
- crumpets 8y ago
  That analogy isn’t good because apple doesn’t lose opportunity by charging itself the cut to use the store. There is no indication that apple is limited in how many developers it could take on. If apple had a limited number of apps and they were declining other apps in lieu of its own, that would be true.
scarface74 8y ago
So if every company that sells that product at a loss to gain market share is guilty of predatory pricing, that would include almost every VC funded company b
sbuk 8y ago
Oh the irony! Spotify claim in "Apple Won’t Let Us Share Spotify Deals We Know You’d Love" that Apple won’t let us share awesome deals and promotions — like 99c for three months of Spotify Premium... Since Spotify have ~36% of the global market (Apple have ~19%) that could reasonably be viewed as predatory pricing. It's also worth noting that Spotify charge as much as Apple and you can subscribe to the service without using IAP.

by mrep 8y ago

throwawaymath 8y ago

I don't think you've substantiated your first claim just by linking to the Wikipedia article about predatory pricing. Even the Wikipedia article admits that the devil is in the details, as it were; it's hard to distinguish between anticompetitive pricing and competitive pricing. You're correct that Apple Music may be a loss leader, but even if it is a loss leader, there's significantly more nuance involved before we can declare it to be predatory pricing.

Spivak 8y ago

> But since they also get the 30% cut back. That's not how that works. If you charge $50/hr as a freelance software developer and you work on your own stuff for a day you didn't "get $400 back", you paid $400 in opportunity cost.

crumpets 8y ago
That analogy isn’t good because apple doesn’t lose opportunity by charging itself the cut to use the store. There is no indication that apple is limited in how many developers it could take on. If apple had a limited number of apps and they were declining other apps in lieu of its own, that would be true.

scarface74 8y ago

So if every company that sells that product at a loss to gain market share is guilty of predatory pricing, that would include almost every VC funded company b

sbuk 8y ago

Oh the irony! Spotify claim in "Apple Won’t Let Us Share Spotify Deals We Know You’d Love" that Apple won’t let us share awesome deals and promotions — like 99c for three months of Spotify Premium... Since Spotify have ~36% of the global market (Apple have ~19%) that could reasonably be viewed as predatory pricing. It's also worth noting that Spotify charge as much as Apple and you can subscribe to the service without using IAP.