Apple - Spotify Competition About To Get Messy
Apple Music has Spotify firmly in its sights. It's one of the few areas where Apple isn't number one and the company invested $3bn in Beats to ensure that it is. Streaming is the future and Apple is determined to put Spotify in its place.
Spotify hasn't got where it is without being a fighter and yesterday the company landed the next blow in its battle to retain its position, attacking Apple's App Store based revenue stream. Specifically the fee that Apple charges for in-app purchases of subscriptions.
For those who don't know, buying anything in-app on your iOS device means handing over a 30% fee to Apple. For developers who publish apps with app related purchase options - the freemium model which has proved so popular - that seems like an entirely reasonable thing to do. For publishers who charge a subscription for a service delivered which has nothing to do with the App Store its just outrageous.
Spotify has dealt with this by loading the Apple tax onto the customer. So a $9.99 Spotify subscription costs $12.99 if bought on your iPhone. Yesterday Spotify contacted all of its customers who are paying this rate and told them how to cancel their higher priced subscription and re-sign for the cheaper option on Spotify's website.
Seems entirely reasonable. However Apple's T&Cs would seem to prohibit this kind of behaviour - advertising rates which are cheaper than the App Store rate is specifically banned. Apple could throw Spotify's app out of the store in retaliation. Spotify would need to re-submit an app without the option to buy a subscription to regain its place.
To me it all looks very anti-competitive and whereas regulators seems to have allowed Apple to take liberties with its App Store policies in the past, this time I suspect that any action taken against Spotify might well result in action. Particularly in the EU, where Spotify is headquartered.
The fact that Apple and Spotify are now in direct competition only complicates matters.