In the last two days, we have followed the Spotify massively criticize the system of rules and Apple within the App Store (1, 2). As we reported, the giant of streaming Swedish filed with the European Commission (EC) a complaint against Ma that echoed the criticisms on a Spotify page.
Now it was Cupertino's turn to put his mouth on the trombone, or rather the web. In a note, Ma not only countered Spotify's accusations but also cited the importance of the App Store for service growth (and recognition), as well as poking it with one of its most recent (major) policies.
Initially, Apple pointed out that both the iTunes Store (launched 16 years ago) and the App Store (opened 11 years ago) were designed to be trusted places where users could discover and buy new quality content.
With regard to its app store, the company has stated that, in essence, developers from start-up engineers to larger companies can be assured that they are playing under the same set of rules, including those that compete with Apple in some respect because they "make the company better."
This all brings us to Spotify's claims against Apple: according to the Cupertino giant, what the streaming of music is demanding something very different. After using the App Store for years to "dramatically increase its business," Ma argued that Spotify wants to "maintain all the benefits of the App Store ecosystem without making contributions to that market."
Spotify has every right to determine its own business model, but we feel compelled to respond when Spotify engages its financial motives in a misleading portrayal of who we are, what we build and what we do to support independent developers, musicians, composers. and creators of all styles.
Product / Service Updates and Restrictions
On the accusation that it was blocking Spotify app updates, Apple said it approved and distributed approximately 200 Swedish software updates, resulting in downloads of over 300 million copies of the app. According to Ma, app corrections are only requested when Spotify "tries to avoid the same rules that all other apps follow."
Regarding the alleged restrictions on Ma's products and services, the company stressed that it works with Spotify frequently to help bring their service to even more devices and platforms. In this sense, Spotify had (and has) every opportunity to be present in more Apple products, which highlighted:
- When we contacted Spotify about Siri support and AirPlay 2 on several occasions, they told us they are working on it and we are ready to help them wherever we can.
- Spotify is deeply integrated with platforms like CarPlay and has access to the same application development tools and features as any other developer.
- We find Spotify's claims about Apple Watch especially surprising. When Spotify submitted its Apple Watch app in September 2018, we reviewed and approved the app from the same process and speed that we take with any other app. Even the Spotify app for Apple Watch is currently the number 1 app in the Music category.
Subscriptions and Charges
About charging 30% of the value of subscriptions made by the App Store, Apple clarified that 84% of applications sold in its store pay nothing company. As such, it only requires the contribution of digital goods and services that are purchased within the app from its internal purchasing system.
Apple also said that Spotify "dropped" the fact that this charge drops to 15% after the first year of subscription, as well as some information about how its business works:
- Most Spotify customers use the free, ad-supported version, which does not contribute to the App Store.
- A significant portion of Spotify's customers are partnerships with mobile operators. This makes no contribution to the App Store, but requires the service to pay a similar distribution fee to retailers and carriers.
- Even now, only a small fraction of their subscriptions fit Apple's billing model. Spotify is asking for this number to be zero.
Apple defended itself by saying it helps connect Spotify to its users by providing the platform through which these people can download and update their apps. In addition, it shares development tools to support the app and maintains a secure (no-obligation) payment system that allows users to believe in in-app transactions. In Ma's understanding, Spotify is asking to "maintain all these benefits while retaining 100% of revenue."
Spotify would not be the business today without the App Store ecosystem, but now they are leveraging their growth to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think this is wrong.
Relationship with music
Finally, the Cupertino giant pointed out that it shares the same love for music as Spotify, but differs from that company in the way it tries to achieve that goal. In Apple's words, “Spotify's goal with these accusations is to make more money from the work of others” (ouch!).
Apple did not miss the opportunity to provoke Spotify with a policy that had a negative impact on the company. More precisely, she cited the decision of the United States Copyright Council that increases the royalties 44% to Spotify, as well as other streaming, appealed; Apple, no.
This is not only wrong, it represents a real, significant and detrimental step for the music industry.
The company closed the letter with a peace sign, saying it is proud of the work it has done to help Spotify build a successful business reaching hundreds of millions of music lovers and wishing them continued success, which it was, and still is. is the goal of creating the App Store.
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Did the game turn to Spotify? Regardless of who is right or wrong (if that is the case), we will certainly see further developments from this arm wrestling soon.