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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 c

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.
      - Humdeee 5y ago
        This is already way off topic to my post I'm wondering if I'm the right person you replied to. Let's stay focused on this, because I agree with most of your points in this thread. Apple makes money off the sale of their iPhone from the user, with Spotify's existence here being completely irrelevant. Should Spotify be granted increased monetary entitlement to their app creation because of this physical material sale between Apple and the user?
        fossuser 5y ago
        I'd argue your question is a warped framing that confuses the issue in an attempt to be leading. iPhone sale to user is irrelevant. Apple forces distribution via their store and they force companies to pay a cut. I think this is bad, but at least it's across all people that participate in the store. Then Apple itself enters the market via the store selling the same product at the same price, but without the tax. That's cheating. It has nothing to do with the 'physical material sale' - it has to do with requiring store distribution and taking a cut of competitors margins, but then entering yourself. It's not Spotify 'getting more of the pie' it's Spotify not having to pay an anti-competitive tax to the platform controller. They can either allow distribution outside of the store (which I would not want) or they can remove the tax on apps that they directly compete with. I'd prefer they remove the cut entirely and replace it with some low yearly fee for distribution.
        5y ago
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?

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.
    - Humdeee 5y ago
      This is already way off topic to my post I'm wondering if I'm the right person you replied to. Let's stay focused on this, because I agree with most of your points in this thread. Apple makes money off the sale of their iPhone from the user, with Spotify's existence here being completely irrelevant. Should Spotify be granted increased monetary entitlement to their app creation because of this physical material sale between Apple and the user?
      - fossuser 5y ago
        I'd argue your question is a warped framing that confuses the issue in an attempt to be leading. iPhone sale to user is irrelevant. Apple forces distribution via their store and they force companies to pay a cut. I think this is bad, but at least it's across all people that participate in the store. Then Apple itself enters the market via the store selling the same product at the same price, but without the tax. That's cheating. It has nothing to do with the 'physical material sale' - it has to do with requiring store distribution and taking a cut of competitors margins, but then entering yourself. It's not Spotify 'getting more of the pie' it's Spotify not having to pay an anti-competitive tax to the platform controller. They can either allow distribution outside of the store (which I would not want) or they can remove the tax on apps that they directly compete with. I'd prefer they remove the cut entirely and replace it with some low yearly fee for distribution.
        5y ago

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?