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Imagine being a competitor and then finding out the company that is crushing you had a secret deal to pay nothing while you struggled every month to pay royalti

Imagine being a competitor and then finding out the company that is crushing you had a secret deal to pay nothing while you struggled every month to pay royalties and were told over and over by the parent company that “it was the best they could do.” Imagine not being able to figure out how they were so successful while you are struggling to turn profit and make payroll. These kinds of walled garden ecosystems seem to be very bad for creating healthy competition, and this news is just adds to the *massive* mountain of evidence of shady behavior by every company that controls one.

hedgehog 3y ago
That assumes Google would bother picking up the phone to say anything at all.
- happytiger 3y ago
  Touché and a deeply important point. There really is no “account manager” for the vast majority of play publishers, is there?
  - hedgehog 3y ago
    I'm sure the people doing devrel over there do their best but have to work under a communications policy that prohibits discussing things like negotiable royalties specifically to avoid situations like the current litigation.
ethbr1 3y ago
I mean, that's public cloud in a nutshell too. And before that enterprise software / database vendor. Scale has always conferred substantial pricing advantages. The difference nowadays is that more of a company's business is covered by SaaS, and so more is subject to these taxes. If 15% of your business had wildly variable scale costs vs your competitor... okay. But if 50% does... as you say, hard to compete even with a better product.
jannes 3y ago
It's already kind of unfair that these services don't pay fees: - YouTube Music doesn't pay fees on the Google Play Store - Apple Music doesn't pay fees on the Apple App Store
- judge2020 3y ago
  Internally they might very well be paying fees to the other business unit; It’s just not something that actually hurts the company’s bottom line.
- andsoitis 3y ago
  That would be silly. If both entities (e.g. YouTube Music and Google Search) are owned by the same company, to whom would you pay a fee? It doesn’t make sense.
  - not_your_vase 3y ago
    In big corpos such departments usually have their very own budget, and operate as a quasi-separate entity from the others. Paying fees inter-departments is a very common thing.
    - andsoitis 3y ago
      In which case the post I responded to is a red herring because they claim (without evidence) that the transfer pricing is happening in the case of YouTube Music and Apple Music.
      - bryanlarsen 3y ago
        Still applies. Apple Music and YouTube Music may show losses because of the transfer fees they pay. But Apple & Google can then decide to keep them around even with their paper losses because they make other divisions more profitable.
        andsoitis 3y ago
atleastoptimal 3y ago
If they were a worthy competitor they'd be able to get an even better deal from Google. Making deals is an open marketplace, it's all about what you can offer. Obviously Spotify is offering Google something worth waiving the fees.
- broken_clock 3y ago
  You can't be serious?
- chucke1992 3y ago
  Spotify was basically the first company. And they had the advantage due to that. So any new competitor would not be just disadvantaged - against the established Spotify - but would also have to spend more money to compete (due to Spotify having a deal). It is basically anti-competitive behavior.
  - Shaanie 3y ago
    Isn't that generally true? A company making a billion widgets per year likely gets a way better deal on the materials required to make them than a company making only ten thousand.
    - happytiger 3y ago
      There’s a big difference when you run the marketplace where those deals are being brokered and set the pricing for discounts and deals. When you run the marketplace and make sweetheart deals, you change the terms of everyone else in the market. But if you don’t tell everyone in the category about your marketplace changes, they become disadvantaged and yet they would never suspect a thing if you don’t tell them. So it’s less like a cheaper input widget for a scale operation and more like the terms and conditions change but just for yourself or one customer that nobody else even knows is happening.
  - devbent 3y ago
    Spotify was like the 15th company in this field, they just benefited from all the ground work their predecessors had laid.
radicaldreamer 3y ago
This is why not all product categories are equal. Go to market is a fundamental calculation when creating any product.
andsoitis 3y ago
You should always assume your competitors are negotiating for the best deal on things and so should you. Being passive and simply accepting things at face value is not competitive or smart.
- kwanbix 3y ago
  Yeah, I am sure that if I tomorrow start with my 0 customers google will give me the same treatment as spotify.
  - andsoitis 3y ago
    Why should they?
    - happytiger 3y ago
      They should or they shouldn’t. The issue is the right to know as a competitor or potential competitor isn’t it? These aren’t deals between two companies, they are terms for public marketplaces, and that is a critical difference.
      - deleted 3y ago
        [deleted]
    - yencabulator 3y ago
      To limit the power of monopolies. https://digital-markets-act.ec.europa.eu/index_en https://digital-markets-act.ec.europa.eu/index_en
- JohnMakin 3y ago
  > Being a passive and simply accepting things at face value is not competitive or smart. The parent comment did not suggest doing anything of the kind, and what should a spotify competitor do in this instance anyway?
apienx 3y ago
This is why we can’t have nice things. So-called moats are responsible for a lot of the ambient enshitification.
scarface_74 3y ago
> Imagine being a competitor and then finding out the company that is crushing you had a secret deal to pay nothing while you struggled every month to pay royalties and were told over and over by the parent company that “it was the best they could do.” Imagine you’re an also ran streaming service and found out that AWS gave a special deal to Netflix and they had reduced rates Or imagine you’re selling “Joe Bobs Cola” and that Coke had a special deal with Walmart. This is not new. You really think big vendors are getting the same deals as everyone else?
- joekrill 3y ago
  The difference is that you can easily sell Joe Bob's Cola at many other retailers and still reach a huge amount of customers. Your streaming service can use Azure, GCP, or any number of other options. But if you want to distribute your mobile app you are essentially forced to use Google Play and App Store, and you must give Google and Apple their 30% (or whatever percentage it is now) cut. We can argue that you can distribute your app other ways (at least on Android), but that's not even comparable because of the artificial barriers that are put in place to make that difficult.

hedgehog 3y ago

That assumes Google would bother picking up the phone to say anything at all.

happytiger 3y ago
Touché and a deeply important point. There really is no “account manager” for the vast majority of play publishers, is there?
- hedgehog 3y ago
  I'm sure the people doing devrel over there do their best but have to work under a communications policy that prohibits discussing things like negotiable royalties specifically to avoid situations like the current litigation.

ethbr1 3y ago

I mean, that's public cloud in a nutshell too. And before that enterprise software / database vendor. Scale has always conferred substantial pricing advantages. The difference nowadays is that more of a company's business is covered by SaaS, and so more is subject to these taxes. If 15% of your business had wildly variable scale costs vs your competitor... okay. But if 50% does... as you say, hard to compete even with a better product.

jannes 3y ago

It's already kind of unfair that these services don't pay fees: - YouTube Music doesn't pay fees on the Google Play Store - Apple Music doesn't pay fees on the Apple App Store

judge2020 3y ago
Internally they might very well be paying fees to the other business unit; It’s just not something that actually hurts the company’s bottom line.
andsoitis 3y ago
That would be silly. If both entities (e.g. YouTube Music and Google Search) are owned by the same company, to whom would you pay a fee? It doesn’t make sense.
- not_your_vase 3y ago
  In big corpos such departments usually have their very own budget, and operate as a quasi-separate entity from the others. Paying fees inter-departments is a very common thing.
  - andsoitis 3y ago
    In which case the post I responded to is a red herring because they claim (without evidence) that the transfer pricing is happening in the case of YouTube Music and Apple Music.
    - bryanlarsen 3y ago
      Still applies. Apple Music and YouTube Music may show losses because of the transfer fees they pay. But Apple & Google can then decide to keep them around even with their paper losses because they make other divisions more profitable.
      - andsoitis 3y ago

atleastoptimal 3y ago

If they were a worthy competitor they'd be able to get an even better deal from Google. Making deals is an open marketplace, it's all about what you can offer. Obviously Spotify is offering Google something worth waiving the fees.

broken_clock 3y ago
You can't be serious?
chucke1992 3y ago
Spotify was basically the first company. And they had the advantage due to that. So any new competitor would not be just disadvantaged - against the established Spotify - but would also have to spend more money to compete (due to Spotify having a deal). It is basically anti-competitive behavior.
- Shaanie 3y ago
  Isn't that generally true? A company making a billion widgets per year likely gets a way better deal on the materials required to make them than a company making only ten thousand.
  - happytiger 3y ago
    There’s a big difference when you run the marketplace where those deals are being brokered and set the pricing for discounts and deals. When you run the marketplace and make sweetheart deals, you change the terms of everyone else in the market. But if you don’t tell everyone in the category about your marketplace changes, they become disadvantaged and yet they would never suspect a thing if you don’t tell them. So it’s less like a cheaper input widget for a scale operation and more like the terms and conditions change but just for yourself or one customer that nobody else even knows is happening.
- devbent 3y ago
  Spotify was like the 15th company in this field, they just benefited from all the ground work their predecessors had laid.

radicaldreamer 3y ago

This is why not all product categories are equal. Go to market is a fundamental calculation when creating any product.

andsoitis 3y ago

You should always assume your competitors are negotiating for the best deal on things and so should you. Being passive and simply accepting things at face value is not competitive or smart.

kwanbix 3y ago
Yeah, I am sure that if I tomorrow start with my 0 customers google will give me the same treatment as spotify.
- andsoitis 3y ago
  Why should they?
  - happytiger 3y ago
    They should or they shouldn’t. The issue is the right to know as a competitor or potential competitor isn’t it? These aren’t deals between two companies, they are terms for public marketplaces, and that is a critical difference.
    - deleted 3y ago
      [deleted]
  - yencabulator 3y ago
    To limit the power of monopolies. https://digital-markets-act.ec.europa.eu/index_en https://digital-markets-act.ec.europa.eu/index_en
JohnMakin 3y ago
> Being a passive and simply accepting things at face value is not competitive or smart. The parent comment did not suggest doing anything of the kind, and what should a spotify competitor do in this instance anyway?

apienx 3y ago

This is why we can’t have nice things. So-called moats are responsible for a lot of the ambient enshitification.

scarface_74 3y ago

> Imagine being a competitor and then finding out the company that is crushing you had a secret deal to pay nothing while you struggled every month to pay royalties and were told over and over by the parent company that “it was the best they could do.” Imagine you’re an also ran streaming service and found out that AWS gave a special deal to Netflix and they had reduced rates Or imagine you’re selling “Joe Bobs Cola” and that Coke had a special deal with Walmart. This is not new. You really think big vendors are getting the same deals as everyone else?

joekrill 3y ago
The difference is that you can easily sell Joe Bob's Cola at many other retailers and still reach a huge amount of customers. Your streaming service can use Azure, GCP, or any number of other options. But if you want to distribute your mobile app you are essentially forced to use Google Play and App Store, and you must give Google and Apple their 30% (or whatever percentage it is now) cut. We can argue that you can distribute your app other ways (at least on Android), but that's not even comparable because of the artificial barriers that are put in place to make that difficult.