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With that accounting methodology, between the 30% apple store cut and the 70% music publishers cut, Apple music is left with no revenue whatsoever to fund their

by mrep 5y ago

With that accounting methodology, between the 30% apple store cut and the 70% music publishers cut, Apple music is left with no revenue whatsoever to fund their service, therefore running it at a 100% loss and thus price dumping which is also illegal.

laurent92 5y ago
But this is an excellent accounting methodology then: Each sub-business should run as a separate business. It picks my interest: Companies internally run as communist economies, all resources are merged and shared, employees are not individually associated with a revenue because the group is worth more than its sum, on the outer, liberal economy. At what size / on which criteria should a group inside a company be considered an independent product-and-loss entity, in order to avoid supercorporations to make use of monopolistic behaviors? Should a 100-billion-dollars marketing operation inside Apple be allowed to function at a loss if it pumps interest in all of Apple’s other products? Can Apple Music be disguised as a marketing operation instead of as an independent entity?
- kypro 5y ago
  Whenever a company of significant size branches into another market where it has some unfair advantage thanks to it's dominance other industry it should come under scrutiny. The reason products like Alexa and the Fire tablet have been so successful for Amazon is basically because they have been able to promote them for free on the worlds largest marketplace and then sell them at a loss offset by the profits generate from other segments of their business like ecommerce and AWS. I've been so underwhelmed by every Amazon product I've ever brought I'm 100% convinced their success in hardware has been almost entirely due to their cannibalistic business practises than their ability to make solid hardware that people want to buy. This means in basically any market Amazon enters they don't need to make the best product, they just need to undercut and promote their products enough to kill off the competition. Google and Apple can also run this strategy very effectively with Google Search promoting Google products and Apple's hardware/appstore ecosystem promoting then locking users into their own hardware and software.
- phlo 5y ago
  Since you mentioned that this piques your interest: There is an body of research and literature about this topic. The Theory of the Firm [0] is a good starting point. [0] https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm
jgwil2 5y ago
I think dumping is only illegal in the context of international trade. Not sure of the nuances but operating at a loss certainly isn't illegal in most contexts.
- matkoniecz 5y ago
  Not entirely sure about legality within country, but anyway Spotify is a Swedish company ( https://en.wikipedia.org/wiki/Spotify https://en.wikipedia.org/wiki/Spotify ) . So it is international already.
- pydry 5y ago
  It is technically illegal but thanks to a lack of appetite from antitrust prosecutors to do... well, anything very much combined with a high barrier of proof it's essentially allowed.

by mrep 5y ago

laurent92 5y ago

But this is an excellent accounting methodology then: Each sub-business should run as a separate business. It picks my interest: Companies internally run as communist economies, all resources are merged and shared, employees are not individually associated with a revenue because the group is worth more than its sum, on the outer, liberal economy. At what size / on which criteria should a group inside a company be considered an independent product-and-loss entity, in order to avoid supercorporations to make use of monopolistic behaviors? Should a 100-billion-dollars marketing operation inside Apple be allowed to function at a loss if it pumps interest in all of Apple’s other products? Can Apple Music be disguised as a marketing operation instead of as an independent entity?

kypro 5y ago
Whenever a company of significant size branches into another market where it has some unfair advantage thanks to it's dominance other industry it should come under scrutiny. The reason products like Alexa and the Fire tablet have been so successful for Amazon is basically because they have been able to promote them for free on the worlds largest marketplace and then sell them at a loss offset by the profits generate from other segments of their business like ecommerce and AWS. I've been so underwhelmed by every Amazon product I've ever brought I'm 100% convinced their success in hardware has been almost entirely due to their cannibalistic business practises than their ability to make solid hardware that people want to buy. This means in basically any market Amazon enters they don't need to make the best product, they just need to undercut and promote their products enough to kill off the competition. Google and Apple can also run this strategy very effectively with Google Search promoting Google products and Apple's hardware/appstore ecosystem promoting then locking users into their own hardware and software.
phlo 5y ago
Since you mentioned that this piques your interest: There is an body of research and literature about this topic. The Theory of the Firm [0] is a good starting point. [0] https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm

jgwil2 5y ago

I think dumping is only illegal in the context of international trade. Not sure of the nuances but operating at a loss certainly isn't illegal in most contexts.

matkoniecz 5y ago
Not entirely sure about legality within country, but anyway Spotify is a Swedish company ( https://en.wikipedia.org/wiki/Spotify https://en.wikipedia.org/wiki/Spotify ) . So it is international already.
pydry 5y ago
It is technically illegal but thanks to a lack of appetite from antitrust prosecutors to do... well, anything very much combined with a high barrier of proof it's essentially allowed.