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As a Spotify subscriber, I don’t really care, because it’s their job to handle their overheads, in the same way that John Lewis on Oxford Street pays different

by vr46 6y ago

As a Spotify subscriber, I don’t really care, because it’s their job to handle their overheads, in the same way that John Lewis on Oxford Street pays different rent to John Lewis in Kingston (probably) but the prices stay the same. Cost of doing business is a thing. Capex and Opex are well-understood by businesses, or should be. If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal and Spotify wants those customers, then this is good and fair for customers at the point of purchase.

AsyncAwait 6y ago
> this is good and fair for customers at the point of purchase. I think it is widely accepted in commerce that a deal is only fair if both parties have the relevant information. If customers know they're paying more because of Apple's fees and are comfortable with it because they feel they get adequate benefits in return, that's fair. If they are unaware of this however, am not sure how the deal can be considered fair, since not all parties have the relevant information to make an informed purchase.
- vr46 6y ago
  This sounds interesting, but not convinced since we could say that fairness mainly exists in the circumstances and rarely in the courts. At some point there is an upper limit to the relevant information available for any decision. We could test this, I mean, suppose the invoices or even the details at the checkout broke down the total into developer’s fee, apple’s fee, government tax, and so everyone could see that, would that be sufficient to fix the problem? I suspect not, because Epic, in this story, are seeking to pay Apple less, and give themselves more - that’s really their bottom line. Are they really going to all this trouble on my behalf?
  - thu2111 6y ago
    Well, hotel bills do routinely break out not just taxes but individual taxes. And it does matter. I just got back from a hotel where I was rather irritated to find that local taxes for just a 6 day stay added up to the cost of a very nice restaurant meal for two. That's worth knowing next time a politician talks about tax. The hotel could treat such taxes as overheads and incorporate it into the price, but that's not really useful because they can't change it, only the customer can. Most business overheads aren't like that. If only a customer can affect a charge it makes sense to break it out and highlight it.
    - chucksmash 6y ago
      Interesting take. What if the shoe were on the other foot? What company would hire me if I negotiated a salary and then after we shook hands and everybody had the warm and fuzzies, I said, "Well now, you'll understand this is just the rate I charge, so it is exclusive of federal and state income tax. These are additional fees that I am responsible, by law, for collecting from you on behalf of the government. I've broken the numbers down this way in the interest of full transparency."
      - rolisz 6y ago
        That's pretty much how it happens in Romania. All (or almost) salaries are negotiated post tax (so what gets payed out to me) and the employer is responsible for paying the appropriate taxes to the government.
        throwaway5792 6y ago
        What if you have other income from investments?
        rescbr 6y ago
        I assume it’s done the same way as any other withheld tax. The only difference is negotiating salary net of tax rather than ex-tax.
        rolisz 6y ago
        In that case you have to go to the tax office and file out some documents and then you pay the taxes for the investments separately. There is a single income tax rate, 10%, so it doesn't matter how much you earn. If your investments make more than the annual minimum wage, you also have to pay the health insurance tax and "social security" tax.
      - deleted 6y ago
        [deleted]
    - LexGray 6y ago
- fredguth 6y ago
  It would be fare if it wasn’t a monopoly. Only if other companies could create their own app stores that worked on iPhone the customers would be optioning. In the current state of affairs there is no option. Remember there was a time you could only phone people in the network you were a subscriber. It is not the same, but a similar situation here.
  - vr46 6y ago
    But it’s not a monopoly, it’s one of many, many devices. There are, at time of writing, many games platforms and many application platforms: XBox, PlayStation, Nintendo, IOS, Android, Windows, MacOS, Linux, with Google Stadia too. Developers make a choice and everything sold on those platforms has distribution costs. Fortnite is available on most if not all of those platforms. AND, players play against one another through the internet not through a private developers network. So there’s plenty of competition. Why Epic aren’t demanding Nintendo and Sony take a lower cut is a mystery. Or maybe not? Epic have massively, massively, overplayed their hand here. Instead of creating an amazing new game and using THAT as leverage to platform owners for a deal, they’ve made a satirical video, broken a contract, had their bluff called, and cemented their place in future business school classes as how not to go about a negotiation.
    - enragedcacti 6y ago
      > cemented their place in future business school classes as how not to go about a negotiation it isn't a negotiation, it's an anti-trust lawsuit. Tim Sweeney made it clear that the only 'deal' he is willing to accept is 3rd party stores.
      - LadyCailin 6y ago
        I find it rich that a company that bleeds tons of money just so they have exclusive titles on their platform is suing someone else for anti competitive behavior.
    - elif 6y ago
      Nintendo, Sony, and Microsoft are creating a game ecosystem by selling hardware at a loss or near loss, footing R&D, supporting devkits, and running promotions mutually beneficial for developers. The value of creating and enabling an entire ecosystem is found to be worth 30%. An iPhone is sold for a substantial profit regardless of gaming entirely, and offers none of those services or promotional benefits to developers/publishers.
- heroprotagonist 6y ago
  You can see this in action on Twitch sometimes in the chat. People ask why the subscription for a streamer via mobile app is $5.99 when it's $4.99 via the web app when there is no difference in what is being provided. It is noticed and often people actively avoid the higher price once they are aware. Some are frustrated and unsubscribe. This is understandable since they realize they've been paying an on-going 20% premium every month for a one-time convenience by originally pressing the subscribe button from the mobile version. And none of the extra 20% goes to the streamer they wanted to support.
paulgb 6y ago
That's a valid opinion about what Spotify should do, but the fact is for a time Spotify did pass some of the fee on to iOS customers by charging a higher price for IAP. The question is, should Spotify be able to tell customers that they are getting a higher fee because they are making the purchase on an iOS device? To me, it requires massive contortions of logic to believe that customers are better off not having this disclosed.
- vr46 6y ago
  Yes, I had to check they were not still doing this. I don’t believe they are allowed to charge a higher fee on iOS, or is there some loophole? Customers ought to know, but whether companies are compelled to tell them is problematic - just see the prices of fuel or snacks at motorway service stations - which reflect a local monopoly, not the true cost. Ultimately, it seems the answer over time is that nobody is forced to buy Spotify or a WHSmith sandwich. The music you can go and buy in the shops, or from Amazon, Googly, Tidal, Bandcamp. Spotify is like WHSmith at a service station and wants to use the local monopoly as an excuse to put up their prices and push the cost onto the consumer rather than factoring it into their business.
  - p49k 6y ago
    It was never disallowed for developers to charge a higher fee on iOS app store purchases. They just aren’t allowed to make the user aware that they are paying more than required or explain why.
- the_other 6y ago
  Spotify could make a web app and bypass this whole issue. They chose not to: let them pay the Apple Tax (if you must call it that. Personally, I think it’s just a distribution cost).
  - Nursie 6y ago
    https://open.spotify.com/ https://open.spotify.com/ (OK, only appears to work on the desktop, weird)
ClumsyPilot 6y ago
> "If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal" I am surprised how this unprecedented practice is not widely discussed - I am not aware of any situation in real life where you rent a store and you are told you cannot charge what you want. There are established limits on what a contract can enforce, an outrageous terms are not considered valid in court. For instance a phone operator could not have penalty of £10,000 for a going over your credit. I believe this term should be considered outrageous - if apple wants to charge 100% tax, thats fine, but their customers will pay 100% more and then they might have questipms for Apple.
- lvnfg 6y ago
  Revenue share and price parity are standard clauses in most department store lease contracts and not at all unprecedented, at least in my experience. My company is routinely told that if we want the lease, we must pay a fixed percentage on sales (usually 25%) as rent, must not list a price higher than can be found elsewhere for an identical item, and all payments must be handled by the department store themselves.
  - donmcronald 6y ago
    I assume there's a minimum required so the landlord has all upside and no risk. That sounds like a super bad deal. The only way I can see that being practical is if you're getting space in a super exclusive location where the clientele are mega rich and the margins are insane.
- vr46 6y ago
  I misinterpreted the rules - developers are actually allowed to charge whatever they like, they're just not allowed to say "Actually you can save five quid if you go -> HERE". Back in the real world, sales assistants may not be allowed to offer deals unless asked first - I know that my partner was basically given very heavy hints to ask if the sales assistant "had any special offers" before he could offer a deal on a new motorbike. I guess this is the same, without the helpful hints. Some people scour the web for coupons and deals, other people pay the full price (and then get extremely cross when the first screen they see in their new app offers a 25% off coupon, yes you, Capture One, you bastards)
yyyk 6y ago
As a Spotify subscriber, you may wish to be familiar with Spotify's site on Apple’s anti-competitive behavior: https://www.timetoplayfair.com/ https://www.timetoplayfair.com/
alexchamberlain 6y ago
I'm not sure i fully agree with the analogy. John Lewis pay a different rent (again presumably) based on the more desirable location, but it's also reasonable to assume their payment provider is the same. In this case, I would argue that Apple have the monopoly on the App Store, which is fine if they are reasonable about it. However, there's no optionality on the payment processor: they insist it's them and take 30% (from what I've read; not actually an iOS dev). Would it not be more reasonable for them to charge a small revenue fee (rent) and allow you to choose a payment provider? They could audit the payment provider to achieve the security features that they seem to be presenting as an excuse for their charges.
donmcronald 6y ago
> If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal and Spotify wants those customers, then this is good and fair for customers at the point of purchase. Are you saying you think Spotify should just charge everyone extra and take extra profit from Android customers? As an Android user, why should I pay extra so you can use an iPhone? Assume me and you are the only 2 users on Spotify and they need $10 per user in revenue. As far as I'm concerned, I should pay $10 and you should pay $14.29. Apple gets $4.29 (14.29 * .3) and Spotify gets $20. If Spotify can't differentiate and has to charge every user the same, they won't charge everyone $14.29 because they're in a competitive industry and keeping the cost to the customer as low as possible is important. It's more likely they'll charge us both $12.15 and call it $10 average revenue per customer. If Epic's lawsuit accomplishes only one thing, I hope Apple is forced to allow developers to advertise and charge different prices for iOS users. If you think iOS is worth +43% on everything you buy on your phone you're welcome to pay that IMO. I don't want to and I'm happy with Android.

by vr46 6y ago

AsyncAwait 6y ago

> this is good and fair for customers at the point of purchase. I think it is widely accepted in commerce that a deal is only fair if both parties have the relevant information. If customers know they're paying more because of Apple's fees and are comfortable with it because they feel they get adequate benefits in return, that's fair. If they are unaware of this however, am not sure how the deal can be considered fair, since not all parties have the relevant information to make an informed purchase.

vr46 6y ago
This sounds interesting, but not convinced since we could say that fairness mainly exists in the circumstances and rarely in the courts. At some point there is an upper limit to the relevant information available for any decision. We could test this, I mean, suppose the invoices or even the details at the checkout broke down the total into developer’s fee, apple’s fee, government tax, and so everyone could see that, would that be sufficient to fix the problem? I suspect not, because Epic, in this story, are seeking to pay Apple less, and give themselves more - that’s really their bottom line. Are they really going to all this trouble on my behalf?
- thu2111 6y ago
  Well, hotel bills do routinely break out not just taxes but individual taxes. And it does matter. I just got back from a hotel where I was rather irritated to find that local taxes for just a 6 day stay added up to the cost of a very nice restaurant meal for two. That's worth knowing next time a politician talks about tax. The hotel could treat such taxes as overheads and incorporate it into the price, but that's not really useful because they can't change it, only the customer can. Most business overheads aren't like that. If only a customer can affect a charge it makes sense to break it out and highlight it.
  - chucksmash 6y ago
    Interesting take. What if the shoe were on the other foot? What company would hire me if I negotiated a salary and then after we shook hands and everybody had the warm and fuzzies, I said, "Well now, you'll understand this is just the rate I charge, so it is exclusive of federal and state income tax. These are additional fees that I am responsible, by law, for collecting from you on behalf of the government. I've broken the numbers down this way in the interest of full transparency."
    - rolisz 6y ago
      That's pretty much how it happens in Romania. All (or almost) salaries are negotiated post tax (so what gets payed out to me) and the employer is responsible for paying the appropriate taxes to the government.
      - throwaway5792 6y ago
        What if you have other income from investments?
        rescbr 6y ago
        I assume it’s done the same way as any other withheld tax. The only difference is negotiating salary net of tax rather than ex-tax.
        rolisz 6y ago
        In that case you have to go to the tax office and file out some documents and then you pay the taxes for the investments separately. There is a single income tax rate, 10%, so it doesn't matter how much you earn. If your investments make more than the annual minimum wage, you also have to pay the health insurance tax and "social security" tax.
    - deleted 6y ago
      [deleted]
  - LexGray 6y ago
fredguth 6y ago
It would be fare if it wasn’t a monopoly. Only if other companies could create their own app stores that worked on iPhone the customers would be optioning. In the current state of affairs there is no option. Remember there was a time you could only phone people in the network you were a subscriber. It is not the same, but a similar situation here.
- vr46 6y ago
  But it’s not a monopoly, it’s one of many, many devices. There are, at time of writing, many games platforms and many application platforms: XBox, PlayStation, Nintendo, IOS, Android, Windows, MacOS, Linux, with Google Stadia too. Developers make a choice and everything sold on those platforms has distribution costs. Fortnite is available on most if not all of those platforms. AND, players play against one another through the internet not through a private developers network. So there’s plenty of competition. Why Epic aren’t demanding Nintendo and Sony take a lower cut is a mystery. Or maybe not? Epic have massively, massively, overplayed their hand here. Instead of creating an amazing new game and using THAT as leverage to platform owners for a deal, they’ve made a satirical video, broken a contract, had their bluff called, and cemented their place in future business school classes as how not to go about a negotiation.
  - enragedcacti 6y ago
    > cemented their place in future business school classes as how not to go about a negotiation it isn't a negotiation, it's an anti-trust lawsuit. Tim Sweeney made it clear that the only 'deal' he is willing to accept is 3rd party stores.
    - LadyCailin 6y ago
      I find it rich that a company that bleeds tons of money just so they have exclusive titles on their platform is suing someone else for anti competitive behavior.
  - elif 6y ago
    Nintendo, Sony, and Microsoft are creating a game ecosystem by selling hardware at a loss or near loss, footing R&D, supporting devkits, and running promotions mutually beneficial for developers. The value of creating and enabling an entire ecosystem is found to be worth 30%. An iPhone is sold for a substantial profit regardless of gaming entirely, and offers none of those services or promotional benefits to developers/publishers.
heroprotagonist 6y ago
You can see this in action on Twitch sometimes in the chat. People ask why the subscription for a streamer via mobile app is $5.99 when it's $4.99 via the web app when there is no difference in what is being provided. It is noticed and often people actively avoid the higher price once they are aware. Some are frustrated and unsubscribe. This is understandable since they realize they've been paying an on-going 20% premium every month for a one-time convenience by originally pressing the subscribe button from the mobile version. And none of the extra 20% goes to the streamer they wanted to support.

paulgb 6y ago

That's a valid opinion about what Spotify should do, but the fact is for a time Spotify did pass some of the fee on to iOS customers by charging a higher price for IAP. The question is, should Spotify be able to tell customers that they are getting a higher fee because they are making the purchase on an iOS device? To me, it requires massive contortions of logic to believe that customers are better off not having this disclosed.

vr46 6y ago
Yes, I had to check they were not still doing this. I don’t believe they are allowed to charge a higher fee on iOS, or is there some loophole? Customers ought to know, but whether companies are compelled to tell them is problematic - just see the prices of fuel or snacks at motorway service stations - which reflect a local monopoly, not the true cost. Ultimately, it seems the answer over time is that nobody is forced to buy Spotify or a WHSmith sandwich. The music you can go and buy in the shops, or from Amazon, Googly, Tidal, Bandcamp. Spotify is like WHSmith at a service station and wants to use the local monopoly as an excuse to put up their prices and push the cost onto the consumer rather than factoring it into their business.
- p49k 6y ago
  It was never disallowed for developers to charge a higher fee on iOS app store purchases. They just aren’t allowed to make the user aware that they are paying more than required or explain why.
the_other 6y ago
Spotify could make a web app and bypass this whole issue. They chose not to: let them pay the Apple Tax (if you must call it that. Personally, I think it’s just a distribution cost).
- Nursie 6y ago
  https://open.spotify.com/ https://open.spotify.com/ (OK, only appears to work on the desktop, weird)

ClumsyPilot 6y ago

> "If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal" I am surprised how this unprecedented practice is not widely discussed - I am not aware of any situation in real life where you rent a store and you are told you cannot charge what you want. There are established limits on what a contract can enforce, an outrageous terms are not considered valid in court. For instance a phone operator could not have penalty of £10,000 for a going over your credit. I believe this term should be considered outrageous - if apple wants to charge 100% tax, thats fine, but their customers will pay 100% more and then they might have questipms for Apple.

lvnfg 6y ago
Revenue share and price parity are standard clauses in most department store lease contracts and not at all unprecedented, at least in my experience. My company is routinely told that if we want the lease, we must pay a fixed percentage on sales (usually 25%) as rent, must not list a price higher than can be found elsewhere for an identical item, and all payments must be handled by the department store themselves.
- donmcronald 6y ago
  I assume there's a minimum required so the landlord has all upside and no risk. That sounds like a super bad deal. The only way I can see that being practical is if you're getting space in a super exclusive location where the clientele are mega rich and the margins are insane.
vr46 6y ago
I misinterpreted the rules - developers are actually allowed to charge whatever they like, they're just not allowed to say "Actually you can save five quid if you go -> HERE". Back in the real world, sales assistants may not be allowed to offer deals unless asked first - I know that my partner was basically given very heavy hints to ask if the sales assistant "had any special offers" before he could offer a deal on a new motorbike. I guess this is the same, without the helpful hints. Some people scour the web for coupons and deals, other people pay the full price (and then get extremely cross when the first screen they see in their new app offers a 25% off coupon, yes you, Capture One, you bastards)

yyyk 6y ago

As a Spotify subscriber, you may wish to be familiar with Spotify's site on Apple’s anti-competitive behavior: https://www.timetoplayfair.com/ https://www.timetoplayfair.com/

alexchamberlain 6y ago

I'm not sure i fully agree with the analogy. John Lewis pay a different rent (again presumably) based on the more desirable location, but it's also reasonable to assume their payment provider is the same. In this case, I would argue that Apple have the monopoly on the App Store, which is fine if they are reasonable about it. However, there's no optionality on the payment processor: they insist it's them and take 30% (from what I've read; not actually an iOS dev). Would it not be more reasonable for them to charge a small revenue fee (rent) and allow you to choose a payment provider? They could audit the payment provider to achieve the security features that they seem to be presenting as an excuse for their charges.

donmcronald 6y ago

> If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal and Spotify wants those customers, then this is good and fair for customers at the point of purchase. Are you saying you think Spotify should just charge everyone extra and take extra profit from Android customers? As an Android user, why should I pay extra so you can use an iPhone? Assume me and you are the only 2 users on Spotify and they need $10 per user in revenue. As far as I'm concerned, I should pay $10 and you should pay $14.29. Apple gets $4.29 (14.29 * .3) and Spotify gets $20. If Spotify can't differentiate and has to charge every user the same, they won't charge everyone $14.29 because they're in a competitive industry and keeping the cost to the customer as low as possible is important. It's more likely they'll charge us both $12.15 and call it $10 average revenue per customer. If Epic's lawsuit accomplishes only one thing, I hope Apple is forced to allow developers to advertise and charge different prices for iOS users. If you think iOS is worth +43% on everything you buy on your phone you're welcome to pay that IMO. I don't want to and I'm happy with Android.