3 ms·

Relevant: Spotify already hands over 70% of their revenue to music rights holders to cover the various performance and mechanical royalties. All of their other

Relevant: Spotify already hands over 70% of their revenue to music rights holders to cover the various performance and mechanical royalties. All of their other operating expenses have to fit into the remaining 30%, meaning they often have quarters that report a loss. Apple trying to take 30% of subscriptions while operating a competing service as a value-add that can afford to be a loss leader is highly anticompetitive.

kristjansson 2y ago
Even the most extreme Apple position isn’t trying to take 30% of all of Spotifys revenue, they’re trying to take 30% of each subscription originated on-device, for the first year of that customer. Which is still a huge cut, and still a problem that doesn’t encumber Apple Music, but the business question for Spotify is “do the incremental subscribers make sense (in quality and quantity), not “sell one subscription and Apple eats our entire operating budget”. A better Apple (with less adversarial partners) might have tried to structure the commission as a profit share, not a rev share, to keep high and low margin businesses on the platform, but alas.
- jncfhnb 2y ago
  I’m not sure that needed clarification but sure
  - jjtheblunt 2y ago
    I found it useful. (Your comments too.)
- toasterlovin 2y ago
  The crazy thing is that Spotify has already proven that in-app subscription on iOS isn’t necessary to their business, since they’ve already succeeded in becoming the most popular music service without it! But of course that’s not going to keep them from asking their government to give them more.
  - stubish 2y ago
    Business is about staying in business, not being popular. A streaming pricing model, so you lose money on your best customers streaming 24x7 who get a great deal whilst keeping mediocre customers on a free tier because it is expensive. An advertising service where the audience is so tight they won't pay the price of a coffee for music streaming. Popular but sustainable? They already can't pay artists enough, only getting away with that because artists don't have a choice but to bend over.

kristjansson 2y ago

Even the most extreme Apple position isn’t trying to take 30% of all of Spotifys revenue, they’re trying to take 30% of each subscription originated on-device, for the first year of that customer. Which is still a huge cut, and still a problem that doesn’t encumber Apple Music, but the business question for Spotify is “do the incremental subscribers make sense (in quality and quantity), not “sell one subscription and Apple eats our entire operating budget”. A better Apple (with less adversarial partners) might have tried to structure the commission as a profit share, not a rev share, to keep high and low margin businesses on the platform, but alas.

jncfhnb 2y ago
I’m not sure that needed clarification but sure
- jjtheblunt 2y ago
  I found it useful. (Your comments too.)
toasterlovin 2y ago
The crazy thing is that Spotify has already proven that in-app subscription on iOS isn’t necessary to their business, since they’ve already succeeded in becoming the most popular music service without it! But of course that’s not going to keep them from asking their government to give them more.
- stubish 2y ago
  Business is about staying in business, not being popular. A streaming pricing model, so you lose money on your best customers streaming 24x7 who get a great deal whilst keeping mediocre customers on a free tier because it is expensive. An advertising service where the audience is so tight they won't pay the price of a coffee for music streaming. Popular but sustainable? They already can't pay artists enough, only getting away with that because artists don't have a choice but to bend over.