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> "Subscription services like Spotify only pay 30% for the first year of each subscription. After that they pay 15%." That's still pretty extreme imo when you

> "Subscription services like Spotify only pay 30% for the first year of each subscription. After that they pay 15%." That's still pretty extreme imo when you control the only store and you directly compete with them/undercut them. > "Also their hosting of free apps for only a nominal developer registration fee is a huge boon to users and a lot of iOS developers." They charge a fee for it, I wouldn't consider it nominal - the ecosystem of apps also obviously benefits apple. --- I'm a huge Apple fan which is why I find this racket irritating, it worries me that it'll blow up in their face and we'll end up worse off. I'd probably charge a (low) flat annual fee for app store distribution and that's it. Apple should be focused on making money with great products, not taxing devs they force through their channel. Keep the rules, lose the tax.

Spivak 5y ago
> That's still pretty extreme imo when you control the only store and you directly compete with them/undercut them. Regulators don’t (yet I suppose) care about this because of opportunity cost. If I’m making $3/user/mo off your $10 subscription and I decide to enter the market and compete with you at then every user I steal and every user if not for me would have gone with you costs me $3/mo plus cost of providing them service. So if I’m able to still undercut you then either I’m ridiculously more efficient than you or you have fat margins. Neither of these are true so something else is going on here. Either I’m bleeding money and this is some strategic play in which case it might be unfair for different reasons, or the market is segmented and we actually have two different customer bases with insignificant cross pollination.
- fossuser 5y ago
  If Spotify is $10/month and paying $3 to Apple they get $7/month. If Apple enters with Apple Music and charges $10/month - they're undercutting Spotify while charging the same.
  - simonh 5y ago
    How many billions of dollars, over how many decades did Spotify spend developing that platform, OS and app distribution system? How many times did they almost go to the wall over the commercial risks that took? Anyway as I already pointed out it’s effectively 15%, not 30%. Also the vast majority, over 99% (literally, I looked it up) of Spotify app users earn Apple nothing because they use it add supported and all the add revenue goes to Spotify.
    - Hasnep 5y ago
      My impression is that the ad revenue from that 99% is users is still less than the subscription revenue from the 1%.
    - protomyth 5y ago
      Also the vast majority, over 99% (literally, I looked it up) of Spotify app users earn Apple nothing because they use it add supported and all the add revenue goes to Spotify. They bought the phone from Apple, so Apple made their money.
      - Humdeee 5y ago
        This is the comment that lost me. I'm sorry, how should more of the pie go to Spotify here using that argument? Apple 'made their money' on the hardware, therefore Spotify is entitled to a larger ratio on the software? Is that the correct interpretation? Edit: I'll take your downvote as being it was the correct interpretation. It's okay, I didn't expect a reply.
        fossuser 5y ago
        Assuming you’re asking in good faith - Apple sells the hardware, they don’t make the software of other company’s apps. They force companies to ship through their store, I think that is okay because it enables them to enforce quality standards for users. I think it’s wrong for them to force this distribution model and then take a cut from every software company. In the Spotify case Apple forces them to pay a tax and then Apple shows up in their own store priced the same where they obviously don’t have to pay a tax to themselves. Spotify is entitled to an even playing field.
  - Spivak 5y ago
    You're ignoring opportunity cost which was the whole point here. You didn't say how much Apple was getting. If Spotify charges $10 and pays Apple $3 then Spotify makes $7 and Apple makes $3. If Apple enters the market and charges $10 then consider a user that would have otherwise went to Spotify. Spotify makes $0 and Apple makes $10 from the subscription but loses $3 from what they would have been paid from Spotify so Apple makes $7. Apple has lots of advantages stemming from their control of the platform but "not having to pay the 30% fee" isn't one of them.
    - fossuser 5y ago
      Apple gets $10 or $3 from a user Spotify gets $7 or $0 from a user How is this not an advantage?

Spivak 5y ago

> That's still pretty extreme imo when you control the only store and you directly compete with them/undercut them. Regulators don’t (yet I suppose) care about this because of opportunity cost. If I’m making $3/user/mo off your $10 subscription and I decide to enter the market and compete with you at then every user I steal and every user if not for me would have gone with you costs me $3/mo plus cost of providing them service. So if I’m able to still undercut you then either I’m ridiculously more efficient than you or you have fat margins. Neither of these are true so something else is going on here. Either I’m bleeding money and this is some strategic play in which case it might be unfair for different reasons, or the market is segmented and we actually have two different customer bases with insignificant cross pollination.

fossuser 5y ago
If Spotify is $10/month and paying $3 to Apple they get $7/month. If Apple enters with Apple Music and charges $10/month - they're undercutting Spotify while charging the same.
- simonh 5y ago
  How many billions of dollars, over how many decades did Spotify spend developing that platform, OS and app distribution system? How many times did they almost go to the wall over the commercial risks that took? Anyway as I already pointed out it’s effectively 15%, not 30%. Also the vast majority, over 99% (literally, I looked it up) of Spotify app users earn Apple nothing because they use it add supported and all the add revenue goes to Spotify.
  - Hasnep 5y ago
    My impression is that the ad revenue from that 99% is users is still less than the subscription revenue from the 1%.
  - protomyth 5y ago
    Also the vast majority, over 99% (literally, I looked it up) of Spotify app users earn Apple nothing because they use it add supported and all the add revenue goes to Spotify. They bought the phone from Apple, so Apple made their money.
    - Humdeee 5y ago
      This is the comment that lost me. I'm sorry, how should more of the pie go to Spotify here using that argument? Apple 'made their money' on the hardware, therefore Spotify is entitled to a larger ratio on the software? Is that the correct interpretation? Edit: I'll take your downvote as being it was the correct interpretation. It's okay, I didn't expect a reply.
      - fossuser 5y ago
        Assuming you’re asking in good faith - Apple sells the hardware, they don’t make the software of other company’s apps. They force companies to ship through their store, I think that is okay because it enables them to enforce quality standards for users. I think it’s wrong for them to force this distribution model and then take a cut from every software company. In the Spotify case Apple forces them to pay a tax and then Apple shows up in their own store priced the same where they obviously don’t have to pay a tax to themselves. Spotify is entitled to an even playing field.
- Spivak 5y ago
  You're ignoring opportunity cost which was the whole point here. You didn't say how much Apple was getting. If Spotify charges $10 and pays Apple $3 then Spotify makes $7 and Apple makes $3. If Apple enters the market and charges $10 then consider a user that would have otherwise went to Spotify. Spotify makes $0 and Apple makes $10 from the subscription but loses $3 from what they would have been paid from Spotify so Apple makes $7. Apple has lots of advantages stemming from their control of the platform but "not having to pay the 30% fee" isn't one of them.
  - fossuser 5y ago
    Apple gets $10 or $3 from a user Spotify gets $7 or $0 from a user How is this not an advantage?