4 ms·

> It doesn't pay 30% to Apple Isn't that because it pays 100% to Apple? I get that there's a competitive advantage to not having to siphon off 30% of revenue

by mort96 3y ago

> It doesn't pay 30% to Apple Isn't that because it pays 100% to Apple? I get that there's a competitive advantage to not having to siphon off 30% of revenue to another entity... but how do you actually solve this here? One option would be to split up Apple and require the services division to be an entirely separate company, and maybe that would be a good solution... but if we assume that Apple will be allowed to sell subscription services going forward, and that Apple will be allowed to take a cut of subscriptions going forward, how can this problem possibly be solved?

piva00 3y ago
> Isn't that because it pays 100% to Apple? I didn't expect I'd have to make this point clearer but given the pedantry in HN: Apple Music doesn't have to pay 30% of its revenue and survive with the rest of 70%, it has potential access to 100% of Apple Corp's revenue, which is vastly larger than the revenue that Apple Music brings to Apple Corp... Apple Corp can subsidise multiple Apple Music if they so wish to maintain an advantage. > but how do you actually solve this here? One option would be to split up Apple and require the services division to be an entirely separate company, and maybe that would be a good solution... That's exactly why anti-trust exists. And yes, splitting a company into its components if it gets big enough to engage in anti-competitive behaviour is a completely valid solution applied quite a few times in history [0][1]. Usually in international trade a competitor subsidising a product through other product lines to engage in price dumping is considered illegal. Apple Music not having to pay 30% of its revenues to Apple when other competitors would have to provide the same level of access to their subscriptions is just price dumping with a few more layers of indirection. [0] https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System [1] https://en.wikipedia.org/wiki/Standard_Oil_Co._of_New_Jersey_v._United_States https://en.wikipedia.org/wiki/Standard_Oil_Co._of_New_Jersey...
- mort96 3y ago
  > I didn't expect I'd have to make this point clearer but given the pedantry in HN I wasn't being pedantic. I understood exactly what problem you were pointing at, as I hoped the rest of my comment would make clear (but maybe I was wrong). Spotify needs to survive on 70% of Spotify's revenue, Apple needs to survive on 100% of Apple Music's revenue + 30% of Spotify's revenue. Of course that's unfair. What I was trying to point out with the "it pays 100% to Apple" comment was exactly that you can't "just" say that "Apple Music must also be required to pay 30% of its revenue to the platform owner", for obvious reasons. > [The other stuff] I would certainly not be against splitting up Apple and making the services division its own company which can't get special favors. I just didn't get the impression that that's what you were advocating for, since your comment didn't call for it (hence the (genuine, not rhetorical) question of "how would you achieve fairness without splitting up Apple").
  - piva00 3y ago
    > I wasn't being pedantic. I understood exactly what problem you were pointing at, as I hoped the rest of my comment would make clear (but maybe I was wrong). Sorry, I misunderstood your comment. Reading it again made it clearer, my fault.
berkes 3y ago
By changing those assumptions? Either not accepting that Apple takes a cut of competitors, or by not allowing them to compete in certain areas?
- mort96 3y ago
  I wouldn't be against either splitting up Apple or outlawing the 30% cut, I just didn't get the impression that my parent comment was going for something that drastic. I might've misread them.
Hikikomori 3y ago
Let Spotify pay for services rendered, like app downloads, rather than a flat fee completely unrelated to cost of producing services rendered. Could even let Spotify host their own downloads, if the Appstore and apples service is so good they shouldn't be afraid of some competition.
- mort96 3y ago
  Pretty sure Apple's argument there would be that the "services rendered" includes continued maintenance and development of the iOS platform. That has been their angle with the EU DMA stuff, it's why their fee is called the "Core Technology Fee". (Of course, this is Apple's spin on it.) You could say that platform owners (over a certain size?) shouldn't be allowed to take a cut of commerce which happens on the platform. I certainly wouldn't be against that.
  - Hikikomori 3y ago
    Guess the insane hardware margins doesn't pay for that.

by mort96 3y ago

piva00 3y ago

> Isn't that because it pays 100% to Apple? I didn't expect I'd have to make this point clearer but given the pedantry in HN: Apple Music doesn't have to pay 30% of its revenue and survive with the rest of 70%, it has potential access to 100% of Apple Corp's revenue, which is vastly larger than the revenue that Apple Music brings to Apple Corp... Apple Corp can subsidise multiple Apple Music if they so wish to maintain an advantage. > but how do you actually solve this here? One option would be to split up Apple and require the services division to be an entirely separate company, and maybe that would be a good solution... That's exactly why anti-trust exists. And yes, splitting a company into its components if it gets big enough to engage in anti-competitive behaviour is a completely valid solution applied quite a few times in history [0][1]. Usually in international trade a competitor subsidising a product through other product lines to engage in price dumping is considered illegal. Apple Music not having to pay 30% of its revenues to Apple when other competitors would have to provide the same level of access to their subscriptions is just price dumping with a few more layers of indirection. [0] https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System [1] https://en.wikipedia.org/wiki/Standard_Oil_Co._of_New_Jersey_v._United_States https://en.wikipedia.org/wiki/Standard_Oil_Co._of_New_Jersey...

mort96 3y ago
> I didn't expect I'd have to make this point clearer but given the pedantry in HN I wasn't being pedantic. I understood exactly what problem you were pointing at, as I hoped the rest of my comment would make clear (but maybe I was wrong). Spotify needs to survive on 70% of Spotify's revenue, Apple needs to survive on 100% of Apple Music's revenue + 30% of Spotify's revenue. Of course that's unfair. What I was trying to point out with the "it pays 100% to Apple" comment was exactly that you can't "just" say that "Apple Music must also be required to pay 30% of its revenue to the platform owner", for obvious reasons. > [The other stuff] I would certainly not be against splitting up Apple and making the services division its own company which can't get special favors. I just didn't get the impression that that's what you were advocating for, since your comment didn't call for it (hence the (genuine, not rhetorical) question of "how would you achieve fairness without splitting up Apple").
- piva00 3y ago
  > I wasn't being pedantic. I understood exactly what problem you were pointing at, as I hoped the rest of my comment would make clear (but maybe I was wrong). Sorry, I misunderstood your comment. Reading it again made it clearer, my fault.

berkes 3y ago

By changing those assumptions? Either not accepting that Apple takes a cut of competitors, or by not allowing them to compete in certain areas?

mort96 3y ago
I wouldn't be against either splitting up Apple or outlawing the 30% cut, I just didn't get the impression that my parent comment was going for something that drastic. I might've misread them.

Hikikomori 3y ago

Let Spotify pay for services rendered, like app downloads, rather than a flat fee completely unrelated to cost of producing services rendered. Could even let Spotify host their own downloads, if the Appstore and apples service is so good they shouldn't be afraid of some competition.

mort96 3y ago
Pretty sure Apple's argument there would be that the "services rendered" includes continued maintenance and development of the iOS platform. That has been their angle with the EU DMA stuff, it's why their fee is called the "Core Technology Fee". (Of course, this is Apple's spin on it.) You could say that platform owners (over a certain size?) shouldn't be allowed to take a cut of commerce which happens on the platform. I certainly wouldn't be against that.
- Hikikomori 3y ago
  Guess the insane hardware margins doesn't pay for that.