Spotify's problem is it has to pay out ~80% of revenue to rightsholders, so Apple's 15% take doesn't leave you with a viable business. For a time, Spotify handled this by charging more for subscriptions from the App Store. I'm guessing Google wanted to get a big name off what would become the Epic suit. They knew Spotify pays ~2% when processing credit card fees, there's a higher conversion rate with in-app payments, but Spotify has a hard fee limit because of rightsholder payouts, so they found a deal that makes everyone happy. Oh, and GCP.
The marginal cost for Fortnite is lower, so Google kept squeezing. It's standard price discrimination. The problem for Google is it also controls the marketplace.
Interestingly the GP's theory sounds 100% plausible if you don't know the difference between net revenue and gross revenue. Humans are really very similar to LLMs...
So true. I was actually once accused on Reddit of using ChatGPT to write a comment that I genuinely wrote myself, by a person who (if I recall correctly) didn’t like the substance of what I was saying. It was a long detailed response with multiple paragraphs and proper usage of words like “However”. Yes, a LLM may write similarly to people who have lots of experience reading and writing formal written English, including academic and legal writing.
At least my example was purely a harmless Reddit accusation. I really feel bad for the people who write essays in school that the teacher incorrectly rejects and reports as AI-written because the teacher misunderstands the limitations of AI detectors and the meaning of their output. (Of course, this is a separate question from students who genuinely try to pass off AI-written work as their own.)
Surely the revenue is calculated from how much money Spotify actually gets right? If they sell a $10 subscription and get $7 after Apple takes their cut then that is $7 dollars of revenue, no?
No because Apple gets 15% of the IAP price right off the top, Spotify doesn’t cut them a check after the fact with an explanation about rights holders etc.
The part I don't get with the Epic / Fortnite deal, is the last sentence.
"it was one of the highest-profile early members of the Coalition for App Fairness, a group that included Epic and supported the Fortnite publisher’s antitrust suit"
If they support the suit, why not "psst, btw, we got a great deal from Google. You know, have somebody subpoena contract records ..." Instead they're "We got our 4%, we Support you..."
That doesn't mean 20% is their profit. It means all the rest of their overhead has fit into that 20%, such as hosting infrastructure, office space, labor, marketing, etc.
It’s not like they have any control over this. What should they do ? Yeah they could say fuck-off to Universal & Co but it would be their instant death.
Right holders made them sign extremely strict contracts which disallow Spotify to diversify themselves. Notoriously, their contracts with majors states that they are forbidden to develop their own in-house label.
A percentage-based fee on services like this is criminal.
Spotify's value, and the actual stuff people pay for, is music streaming from Spotify towards consumers. Apple nor the app store plays any part in this. Apple faces exactly zero costs to enable the actual streaming of value itself, yet just grabs 30% of it.
A flat fee to cover the cost of running an app store? Fine, and fair. Robbing businesses of enormous segments of their revenue: criminal.
If they can charge a flat fee, they can censor arbitrarily, like Tumblr, or Fortnite.
There should not be any organization that gets to overrule your own wishes about what software you wish to install on your phone.
That’s turnkey tyranny because all it takes then is a law (or EO) that compels Apple to censor secure encrypted messaging apps.
They already strongarmed them into backdooring iMessage so that it’s not e2ee and Apple and the FBI can easily read all iMessages due to key escrow in (the non-e2ee) iCloud Backup.
I agree in principle but also think apple should be able to remain in control of their own store. However, they should be forced to let others provide alternative stores.
Ooh, sorry, but I have to chime in on this. Percentage based pricing is the norm for any transaction for any amount. 30-50% is typically the retailers take. This also applies to claimed "low margin" PC hardware, games, etc. Manufacturing/distribution (including principles like LEAN, etc.) is something I could honestly write a book about...a book that would sell poorly. However, I've seen the invoices, have been good friends with the right people, etc. At the end of the day, a manufacturer targets 3x costs to account for distributor + retailer. Depending on size, the retailer will buy from a distributor (in most cases) or a manufacturer.
Distributors in terms of the above actually DO have super slim margins because they are simply middle-man. They only exist to ship the product to smaller companies.
> Apple nor the app store plays any part in this. Apple faces exactly zero costs to enable the actual streaming of value itself, yet just grabs 30% of it.
It they don't play any part, just get out of Apple ecosystem.
Or why don't spotify then develop a smartphone and put it in the hands of billions of people and them distribute its app there. This is the easy part, right?
This will hurt Google and may destroy Spotify. If they’re the only ones that get the 0/4% deal and the other services like tidal are paying full price that’s a blatant anti-competitive agreement.
For the same reason you buy nicer toilet paper for your home than the stuff you find at a truck stop: it’s not a significant portion of their expenses.
They could be fined and then forced to pay full whack.
But I'm not sure they meet the threshold for anti-competative practice. You'd need to show some sort of paid exclusivity (eg a bribe so only Spotify could get a better rate).
30% for market access is a bigger net evil that anything Spotify might be doing IMO.
* Price discrimination is not illegal
* Google has been claiming they aren't monopoly because Apple exists
* Clearly knowing such secret deal pisses off other customers and yet there are no alternative market for the Android platform
It's a very unfair(?) place to be for an app devs to pay the % tax when Google spends one-time fee for reviewing the app + other I/O costs
There is no alternative market on Apple. On Android there is F-Droid. Your app has to be open source to be on it though which most companies would never concede to as it would expose how much anti-user tracking they do.
Also afaik F-Droid insist on building apks directly from source, so non FOSS apps basically can never use it even if they are ok with showing the tracking they do.
Why are we even discussing F-Droid here? The topic at hand is whether Google has a monopoly on the Android app market, not whether anyone can put their app on F-Droid, and there are plenty of alternative app stores besides F-Droid.
Setting up your own F-Droid repo is quick and easy, I've done it myself. Adding the repo can be done by copying the link or scanning a QR code.
I'm sure companies would prefer a platform where they can pay money to get featured on the front page which comes with their repo preloaded, but if you're a small app business, hosting an F-Droid repo for test releases and perhaps releases for non-Google phones, you can get rid of the auto-updater if you just point people at F-Droid.
there are other markets for android: from samsung & huawei at least(was it called petal apps?). There's also fdroid. So at least for android it's not that bad
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.
This comparison doesn’t seem to address the issue of who you replied to. If I were running a streaming service, knew the business intimately, and still couldn’t figure out how Spotify had such an advantage against me, I would be both perplexed and need to admit defeat.
I wouldn’t have the same sentiment against YouTube music or Apple Music, because these are explicitly part of the same companies that host the marketplace.
That’s true. But it also raises question about whether the marketplace should be able to advantage itself for its own applications in the first place? It’s “might is right” but is it ethical and will it create a better society? It seems consolidation is inevitable and meaningful competition impossible.
I mean, ultimately, if you run a marketplace without posted rules and only let your friends and your own self succeed, aren’t you at a minimum sort of cheating? Like a Vegas house who claims fairness but the house gets special odds?
Yes and it is also a borderline thing to me. Amazon Basics does the same thing and it's pretty messed up that you can put a product in the same marketplace you control and run out the competition.
Retail shelf space is a constrained physical variable as opposed to screen space which is virtually unlimited. Putting own white label product on shelf incurs stocking and restocking costs as well as shelf space which could have been used to sale other branded products.
Apple/YouTube music not having any platform fee does give them an unfair advantage. Not sure how they rank in their own app stores in music categories though. Android user here so YouTube comes installed by default and even Yt music. Not sure if Apple music comes pre-installed as well. If it does, it does give another advantage to Apple.
The fact remains that plenty of people prefer the name brand, and there's a type of 'fairness' baked in to this scenario as the house brands are very often packaged in a way that looks, simply, cheap; the stores are often paid by the brand name marketers for shelf space so they have a vested interest in not competing too hard with their house brand, so they package in a way which makes it look a bit second rate.
A few years ago, I worked on a video game published by Microsoft. We ran game servers in Azure, and on Windows for obvious reasons. The project had to pay for the windows licenses from MS, despite being entirely funded by them, partially developed by an internal studio, on aMS first party IP.
I don't recall how much it cost exactly, but the cost of the per-core windows server license hourly is not far off the cost of a core on AWS these days.
What difference does that make? Surely, any business decisions would take into account that it is all still Microsoft’s money.
“Paying” for accounting purposes, and “paying” where the payer loses access to the funds has different consequences.
For example, Apple and Alphabet can account for YouTube and Apple Music paying App Store fees, but leadership can ignore the fees for the purposes of selling a loss leader. Spotify cannot ignore the fees, since it would run out of money to pay other bills (or negatively effect net income).
Have you any examples of this happening? Because every experience I've seen points to sweetheart deals (such as android + spotify) but internal teams have to play by the normal rules.
>Individuals pay $10 a month for the AI assistant. In the first few months of this year, the company [Microsoft] was losing on average more than $20 a month per user, according to a person familiar with the figures, who said some users were costing the company as much as $80 a month.
Who knows if Apple is earning a profit on its Music + Classical Music apps or whatever else it bundles into its products. Maybe they consider it to be a small enough loss to offset the chance that a customer buys an Apple One bundle, which then makes up for the loss because the margins on cloud storage are much higher.
For physical products, which makes sense. I can’t imagine Apple TV+ was (or probably still is) at all profitable (especially considering how low the monthly fee was and all the promotions at the beginning).
Theres a big difference between allowing a project to run at a loss over the short term (the article says first few months of this year), and using a different business vertical to allow an unprofitable venture to proceed.
Microsoft seem to be pushing Linux in Azure quite heavily nowadays. Surprised about the Windows thing. Especially for game servers where Linux is in it's element.
Also, my experience of working in games is that the developers are exclusively windows. The backend services might use other OS's, but all the game development happens on Windows. When this was going on, I don't think a single developer in our room would have know the first thing about Linux.
> Especially for game servers where Linux is in it's element.
I think you'd be surprised at just how many games use Windows servers :)
usually video game servers, need a like-for-like copy of the engine for sync purposes and to make sure the clients aren't lying about physics calculations. up until recently there hasn't been an incentive for game developers to use/work on linux support - so game servers use good old windows.
Your cellphone maker shouldn't be eating into Hollywood's business.
Your online Walmart is making Lord of the Rings.
And you pay a 30% fee just to deploy your software into their walled gardens, which they monitor, remove the customer relationship, and make you jump through hurdles. If you are successful, someone can pay to place ads in front of legitimate searches for your brand.
Edit: Can't respond to comments anymore after being downvoted, so my response:
> Where and how is the line drawn? Should a cellphone maker be eating into map maker’s business? Laptop maker’s business? Camera maker’s business? A secretary’s business?
Perhaps when there are more than two vendors for one of the most critical pieces of technology for modern civilization.
Perhaps when you can deploy apps without taxation, control over distribution, unfair competition, scare tactics, or adversarial ad placement.
Right now the two vendors wield absolute control over one of the most essential societal functions. It's almost as bad as if they controlled the internet itself.
> Your cellphone maker shouldn't be eating into Hollywood's business.
Where and how is the line drawn? Should a cellphone maker be eating into map maker’s business? Laptop maker’s business? Camera maker’s business? A secretary’s business?
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.
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.
Hm yes but in general if this happens too much it's frowned upon. Because all the bookkeeping to shift money within the same company actually costs money for no real reason.
If this happens a lot the department bearing the cost is usually compensated with a bigger budget.
Yeah but it's often not real billing. It's just to put a price on it so internal departments don't waste a ton of company resources because it's 'free'.
I work for a very large enterprise also and we've been instructed to stop internal billing for everyhing less than 10k, and everything above 100k must be compensated in other ways, like shifting of responsibilities or personnel between teams. This was done because various departmental interests were basically trying to 'make money' at the expense of other internal departments and creating a complex mesh of internal contracts that was only wasting a huge amount of overhead :)
The problem with this thing is that it can become a goal of its own and some departments think they are making a ton of money even though they're only shifting internal funds and causing huge expenses in finance.
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.
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.
Why would it be silly? One division paying another division for resources. That happens a lot and it makes sense in that it helps to figure out just how much resources are needed.
This is a solved problem. Google may not care but in general companies want to know if one of their businesses is actually making money or just a perceived success because of the conglomerate. Of course a company may fudge the figures to lean the calculations one way or the other but enough theoretical and practical data exists for accounting costs.
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.
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.
> 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?
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.
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.
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.
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).
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.
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.
I guess if I were a shareholder I'd be pleased since they seamlessly filled the gap left by GPMAA, spawned a lower maintenance subproduct in YTM, and cashed in on the collusion, but as someone screwed over by a product that Google "just gave up on" everything Google makes is like a hamburger full of sand, and I strive to avoid eating it, to this day.
Can you share your gripes with YTM? I've been using GPM and thus YTM since....a long long time.
When GPM died, I was very anti "switch" to YTM. But now I can't even recall the issues in my head that I suspected/feared with the change. In fact, Youtube Premium and YTM are the only subscription I would recommend to friends and family."
To remind me of my hatred for google, can you describe what you dislike? I realize there's the whole monopoly and walled garden thing.
- playlist decayed and dropped songs, YouTube is even worse about this
- Play Music had a new releases browser highlighting new album releases by genre, you could "walk" into them in AA, then they bled that off
- as it stands "Play" doesnt have music anymore, and so the only discovery is YouTube's recommendations
- YouTube's recommendations are somehow difficult to control, overly gamed, repetitive, coarse, and generic -- some of which are contradictory. Google wasn't even able to protect Gboard from exploits like this with their unsated thirst for big data automation dominance
- they haven't begun to cooperate with other vendors to operate with assistant, instead picking winners, again
- for a span battery was concerning, it's not right now
- for a span Google's failed record of protecting user privacy, even now Google+ echo's when the Photos flow Share workflow walks me into privacy violating features
- i have qualms about providing an ad personalization business real-time granular data about my mood (though it's unlikely since my tastes are too obscure, anyway)
- i have qualms about subjecting myself to the opinions of a business with large enough reach to be an effective political entity and lever of corporate activism against my neighbors in society (particularly for an inferior product)
Hope this helps.
Edit: also the playback history was pretty bad IIRC, I assume it lumps audio playback with shorts, and shorts can't be organized into playlist despite their efforts. I need music to be a commodity, not a gift/promise.
Interesting, that's what I was wondering exactly, thanks for the context.
I think the main difference between our experiences is stemming from the "Play" garden.
when I was on android, I didn't care that the Play experience was being "deprecated" because all I would use it (and YTM) for was music.
And now with Apple, I just think it as my "music" app. And regardless of platform, I find it absolutely demolishes Spotify top to bottom in UI/UX, audio options, discovery, app health, etc.)
I've never had AA/Carplay, so not surprised this has never bothered me. Makes me realize i'm missing an entire feature suite.
Have you tried it recently? I'm interested if you'd find it to be more "normie polished" than it used to be.
Edit: not sure why I'm defending an evil mega-corp, trying to justify my years of purchases I guess :)
I've fooled with it, but didn't see any draw. I removed it from my initial bloatware purge of my Pixel, including Google's launcher.
At a glance,
Things that leave a bad taste in my mouth:
- Genres > Metal > "Numb" by Linkin Park
- New Releases isn't organized by genre, which means you breathe through a straw, and hope Google brings a release to your attention.
- The "feed" New Releases which is apparently robo-tailored includes a Slowdive album from 1996, and a bunch of corporate stuff I'll likely never be in the mood for.
- no acknowledgement of labels, collectives, or studios. all very real constructs in current music.
- presumably live music recs are out even though those were never accurate to begin with
- there wasn't any on boarding, i guess im just to assume google knows who i am. went through onboarding, it's just there to slurp up artist relations and obtain feedback on recent trends it's inefficient and irritating out of touch
Awful volume bar on webapp, only mute+1 is usable volume level. iOS app fails to resume frequently so I need to kill and relaunch manually. Recommendation isn't interesting. Uploaded music is difficult to play unless I pick it manually. I doubt that they don't want us to play uploaded music because it's not good for CDN.
Not sure companies having deals and negotiations is newsworthy. How about that deal where Qualcomm didn't pay to use ARM patents? At least that one's actually interesting.
This is newsworthy because Google and Apple are facing lawsuits regarding their forced 30% price cut for years now.
Also, imagine you are an indie Android Developer/small company and want to sell an app. Nowadays for the first $1M in revenue it's a 15% cut, above that (and it used to be since the first $) 30%. But hooray, the big company Spotify pays 0% to 4%.
And then the Google guy says, quote from the article: "These key investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and create new opportunities for all developers."
So yeah indie dev or small company, Google says you should be glad they only take 0-4% from Spotify, that way all Android users have an improved experience!
Not only is this shameful from a morale perspective, but also lawsuits & the EU will have even more arguments against Google now.
Bonus: In the last paragraph Spotify is also shown as hypocrite - taking advantage of a 0-4% deal with Google, but at the same time joining a "Coalition for App Fairness" to reduce fees.
>n the last paragraph Spotify is also shown as hypocrite - taking advantage of a 0-4% deal with Google, but at the same time joining a "Coalition for App Fairness" to reduce fees
but, what's the problem?, yeah they are paying less, but better they're playing less and still helping everyone than paying less and be against app fairness
This is the real problem with the Apple/Google 30% tax: it's not that the App/Play Store costs 30% to run. It's that they want to give sweetheart deals like this to very large customers.
Every single firm will give sweetheart deals to large customers.
The marginal unit cost of serving a large customer is always lower than serving a smaller one. Why shouldn't I pass the savings to that large customer?
The risk premium for serving a large established firm is lower than serving a smaller one (including payment failure risk). Why shouldn't I pass the savings to that large customers?
Large customers also give you predictive revenue and gives sufficient room in purchasing decisions. Why shouldn't I pass the savings to the large customers?
Large customers may also bring in other customers and open up new revenue channels for me. Why shouldn't I pass the benefit to them?
Economies of scale is a thing and that's how consumers get to enjoy low prices and high quality.
It's incredibly sub-optimal to punish economies of scale
The real problem with the 30% is that it's far too high. It could have been 0%. Why do you care about what deals with Spotify they have? Is this resentment?
> You're paying for that slush fund.
Google is probably getting the difference from Spotify in some other way. Google/Apple also have a lot of profit with their app stores because 30% is too damn much.
If Google wouldn't have a deal with Spotify, you'd still be paying 30%.
That's not true. Most contracts are negotiable, and this is legal. Of course, this may change in the EU due to the “Digital Markets Act”, but this is new.
Bigger companies getting better deals has always been the reality, due to volume discounts.
We have a different idea about what the free market is.
>Of course, this may change in the EU due to the “Digital Markets Act”, but this is new.
That's exactly why it should change and why Apple(and Google) knows the winds are changing sooner or later.
>Bigger companies getting better deals has always been the reality, due to volume discounts.
That works in retail where I can get a volume discount for buying 2 million tonnes of bannanas, but this logic doesn't apply to digital markets which scale much more effortlessly and cheaply regardless of scale meaning steep discounts for big players are somewhat counter intuitive.
>We have a different idea about what the free market is.
The free market means that if I want x tonnes of bannanas to buy or sell, I can choose which supplier or to whom, and at what price to buy/sell them.
In the mobile digital markets you have no such freedom of choice. It's either Apple on the iOS market or Google (minus sideloading) on the Playstore, that's it. They're two monopolies with no competition, not a free market.
This kind of deal is just unfair to any other business: if they are a marketplace, they have to have the same rules for everyone. It shouldn't matter how big you are, how you went to college with their CEO, or if your wife drinks tee with their wife: as soon as you provide a service that anyone can get, rules should be the same for everyone.
> Spotify and many other services (Netflix, Youtube) began on the web.
Spotify didn't have a web player available in the first few years of its existence.
> There's no reason to lock it behind an app store on mobile other than "if we don't do it, Tidal/Deezer/Apple will".
A webapp-only music streaming service sounds like a nightmare on a smartphone, considering offline playback, integration with the OSes native playback controls, wearable support etc.
Progressive Web Apps have access to persistent storage. I'd be curious to know how much of Spotify listening happens offline; my guess is that it's very little.
Either way, once sideloading is allowed on iOS I expect companies to aggressively renegotiate app store fees.
Spotify is very good at negotiating sweetheart deals. I am convinced that they negotiated something similar with Sony, because on the PS4, Spotify is the only app I have found that can play overlay audio while you're playing a game to replace the background music.
Does anyone know the social mechanisms behind the scenes that allow them to negotiate such effective deals?
Spotify is deeply in bed with the traditional labels/music industry and that industry seems to be able to "move" stuff easily from what I've seen. I always have a hard time visualizing all the components at play here though.
A big portion of Spotify's ownership is held by the big music companies, including Sony. I learned this from watching The Playlist on Netflix. (It's way over-dramatized but you can learn a thing or two)
I think it is because spotify's biggest competitor is Apple. And both Google and Sony really doesn't want Apple to control the music streaming industry as it could affect their device sales.
It's interesting because Google has their own competing music streaming platform, but they still seem to give preferential treatment to Spotify. For example Spotify was the only service that worked with the Android clock app when they added the ability to use music with alarms. YouTube Music support didn't land until a year later.
Becuase there is competetion now so Apple has to play well. In cases where Apple doesn't have any competetion or is significantly ahead like iMessage or FaceTime or satellite message, Apple has a history of creating ecosystem.
when a company that produces hardware that plays music has control over the industry that delivers music to that hardware they might be tempted to make their hardware handle that music better.
Apple might not even do that, but given Google's documented behaviors about making their sites work better with Chrome they might expect that Apple would if they could.
> when a company that produces hardware that plays music has control over the industry that delivers music to that hardware…
FWIW, Apple doesn't control the music industry. Spotify has more than twice the marketshare of Apple Music, so I'd imagine that (for now) Spotify has commensurate influence over the music industry.
> …they might be tempted to make their hardware handle that music better.
Maybe Google would, but (to my original point) Apple doesn't tie their media services to their devices.¹ I think it's worth keeping in mind that you really can't equate Google's evil tendencies to Apple's (and vice-versa) because their business models are completely different.
>>And both Google and Sony really doesn't want Apple to control the music streaming industry as it could affect their device sales.
>Is that true? My Alexa and Sonos devices work great with Apple Music.
so when I replied
> when a company that produces hardware that plays music has control over the industry that delivers music to that hardware…
it is meant to imply that I am answering
>is that true?
with - Yes, that is true BECAUSE...
and my statement
> …they might be tempted to make their hardware handle that music better.
followed by
>Apple might not even do that, but given Google's documented behaviors
should be interpreted as me saying
Apple doesn't tie their media services to their devices (although that might change if they found it very beneficial). But Google is evil and would tie their media services to their devices therefore they might expect that other companies would do the same.
The music industry is, indeed, notoriously litigious / negotiation-heavy.
Pure speculation: by necessity, Spotify has probably gotten pretty good at those things too. I would bet they've got some pretty heavy hitters in the dealmaking department.
Depends on which version of Vice City you played. The original PS2 version would not have had access to a hard drive.
GTA: San Andreas on the XBOX did allow you to use such a feature, provided that you had used the XBOX's disc drive to rip the audio CDs yourself. I recall letting the XBOX rip all of my System of a Down CDs circa 2005 for expressly this purpose.
> They later extended it on the Xbox 360 to allow you to link in your Windows Vista machine to stream your MP3's straight to it
The Xbox 360 expanded on the feature in some neat ways -- if you had an iPod or other portable player, you could plug that in via USB, it supported generic DLNA shares (so you could play music from Kodi/XBMC running on a PC), and some (most?) games would flag cutscene audio vs. in-game audio, which would allow the system to pause the user-provided audio and fall back to the game's soundtrack for cutscenes.
What's crazy is those 360 profile settings still apply to 360 games on modern Xboxes. I was really surprised to see it remembered something I set on my old 360 like 10 years back.
Oh yeah I distinctly remember playing Deftones over and over and over from local files on the PC version, to the point that all I can think about when I see GTA or hear Minerva is the other one.
After loading, the entire game (from opening screen to ending scene) fit completely into the PSX's tiny RAM.
And the in-game background music was just regular CD audio tracks on the game disk, which was easy since the drive wasn't used for anything else anyway.
Open the drive, swap disks for your choice of audio CD, and it was happy to play those tracks instead.
(Or, alternatively: Put the Ridge Racer game disk into a regular CD player and enjoy the synthwave soundtrack all on its own.)
I remember this on GTA III, played on Windows XP. I think the radio station was called "MP3 Player", and there was an empty folder in the game's application folder to which you could add MP3s.
I have a feeling the original '97 GTA could kinda do that. Or maybe GTA2.
You could find the directories on disk where the radio music was stored and just copy in your own stuff.
I recall TrackMania Sunrise was like this. That game was made to be modded, so it kinda made sense they made replacing audio easy.
Side note: After watching The Stig's laps while listening to dull audio on Top Gear, I tried replacing TrackMania's music with very soothing music. My times got better.
I vaguely recall that '97 GTA allowed you to eject the disc after the game started and load an audio CD that would play when you selected the custom radio station.
Excite Truck on the Wii also had that feature. You could load mp3s onto the SD card. It was a launch title, so I was expecting most Wii games to support that feature, but I think only a couple ended up with it.
GTA 3 certainly did. I remember because I basically spent a few weeks listening to Weezer's Green album (that came out a few months prior) over and over while playing the game.
Correction, it works with Apple Music as well[0], and with local music files[1].
As for why, it seems like those were just the only two that bothered to integrate their apps with Playstation. Which kind of makes sense, as Spotify and Apple Music are the two largest streaming services currently (by user numbers[2]). Youtube could arguably claim to be more popular, but their YT music app feels half-baked even on the primary platforms (iOS and Android). And the other ones right behind are Tencent Music and Amazon Music, which are rather unpopular, at least in the US.
Weird framing of those linked numbers: Spotify (30%) is way out in front and Apple (13.7%), Tencent (13.4%), and Amazon (13.3%) all have similar market share.
Related question. Why don't any games allow you to replace the in game music with something else? Is this patent encumbered or something? I figured by now, I'd be able to simply go into settings, choose an audio provider (e.g. YT Music, spotify, local, etc) and have a custom BGM soundtrack play.
It’s not necessarily that game devs“don’t allow it,” and more like “didn’t bother to implement that feature and integrate with those services.”
Which is a really fair point. Because why waste time on this, when a user who cares about playing their own music can just open a browser tab or spotify/apple music/local/etc. app, and it will work literally in any game anywhere. And Playstation supports Spotify/Apple Music/local music playback during games natively, without any hacks or workarounds (like using the built-in web browser) as well. I assume Xbox has similar functionality, but I don’t have much experience with it.
The only games i’ve seen that allow (limited) in-game audio provider choice are those that have an in-game radio feature (older GTA games, Forza, etc.), so that the custom user music kinda works “in-universe” in those games.
Smiling thinking back to Quake 1, which only took up a small fraction of the CD for the installer and would play any audio CD that was in your drive for you :D
The OG Xbox used to allow you to rip music locally to the device and then playback the music in games which supported it. It was a pretty nice feature for its day.
True, but in case of Sony, Spotify replaced "PlayStation Music", a competing service of Sony which simply didn't scale, and the only service able to overlay music over any game
those are the same thing in this context. obviously it’s not that spotify is the only company capable of figuring it out. what’s left? sony blessing spotify.
It could also be there is only enough profit for one, so the game theory equilibrium is zero. So Spotify could be the only player large enough for Sony to profitably encourage. Although that theory doesn’t account for them not giving the option of free music players written by hobbyists who don’t care about profit or labels but only serve indy content
PlayStation Music (or actually "Music unlimited" as it was called) was the only music application able/allowed to run in background while a game was running. Other (hobbyist) music players are not allowed, likely because it would make the available resources to a game less predictable, so harder to optimizer for the console...
As many others, Sony found later that it's not worth it to operate a own streaming service, and probably made a deal with Spotify where Sony provided the initial application, Spotify provided the service and potentially pays some additional revenue share to Sony.
It's a story from a moment in time where every distributor/company thought they could do a better/more profitable music streaming service than Spotify...
Apple Music and local playback supports background play while a game is running. I doubt it's any of this "allowed to" nonsense and simply those other apps just didn't add support for the PlayStation.
> Spotify is very good at negotiating sweetheart deals.
Indeed, and that skillset has given them an advantage in the market. Things working as expected. Does it suck for their competitors? Absolutely. Is it illegal? I don't think so.
Anyone is free to fork android and make their own app store. A luxury thanks to open source. The network effect is real but the market isn't intended to be "fair", it's brutal.
"I'm buying a lot of X from you. I notice you sell Y. Can I get a discount on Y?" Quite standard. People do it at the farmers' market. And it's almost definitely not anti-trust because selling cloud compute is unrelated to running an app store.
Different departments but still Google (rather than different Alphabet entities, which is much less trivial). Cross-PA GTM collaboration has been a priority for years now, and the two places they've made serious inroads have been Ads + Cloud and Geo/Maps + Cloud. I wouldn't be surprised if Play + Cloud was emergent, too.
Why wouldn't every big company stand up their infra on GCP then? Especially games and things that don't have huge backend requirements, this would be a no-brainer.
It would scream anti-trust though, and would surely attract the attention of regulators (which are already circling in the skies)
> Why wouldn't every big company stand up their infra on GCP then?
Because Amazon is likely already giving big companies discounts. There is a huge amount of competition between the big 3 cloud providers who work whatever deals they can to get big customers.
> Most companies running on AWS/GCP/Azure are paying nowhere near the advertised costs
This is true, but it misses a big motivation behind it. It costs more to have enough capacity to support on-demand use since it has to sit idle, waiting for a customer. Part of the discount you get is you give AGA certainty in demand. They don't need to hold as many machines in the on-demand pool, and it makes long-term planning easier. You'll also find that those on-demand prices don't actually scale. At some point, you'll have to talk to a rep and commit to more hardware and a discount because you're just too big.
Yup. In B2B in particular, everything is negotiable. The sums of money are large so there's a lot of wiggle room. There's also a lot more strategy involved. It could be the end of the quarter and the someone needs sale or they just want to improve the relationship for the next deal. It can also be as simple as the competition is against companies that hate each other and they'll happily eat a worse deal to get it done to spite the other. One of the fun parts of the business side is coming up with creative ways to get a deal done. Not dissimilar from coming up with creative ways to solve engineering problems.
Take a look at my post further up. I think something similar was done for Niantic, and I wouldn't be surprised if some of these publishers also have sweetheart Play deals: https://cloud.google.com/solutions/games
I would say because Spotify has moat? Wouldn’t even be surprised if it is in top 5 apps in the world “running in the background”. Both Google and Spotify kinda win with this agreement. Plus having “Spotify runs on GCP” is a huge advertisement for other enterprise customers.
At the onset of the Epic lawsuits, I thought the Apple lawsuit would have some merit, because they tie users' hands behind their backs, but that the Google lawsuit was a baseless attempt to fragment the Play Store with Epic microtransaction nonsense. All the things coming out of the Google case have shifted my opinion significantly. Google wasn't actually playing fair while Apple was cheating; they both were cheating. Google was just hiding it under a veneer of "open source" and "open platform".
The Apple lawsuit failed primarily because, well, it's not illegal to use a legal monopoly (copyright) in the intended manner. Nor is it illegal to merely be big[0]. Epic's lawsuit against Google may succeed purely on the basis of "well, Google opted in to competing app stores and payment methods, Apple didn't", which is not at all the outcome I wanted or expected.
[0] Or at least, it stopped being illegal after the neoliberals rewrote history with the "consumer welfare" argument.
I don't know. Look at hundreds of thousands of pages of regulations, many layered regions and municipalities, meddling politicians; agencies and bureaus involved in US market (or EU market).
If you wrote down all the rules of Google app store, including all their sweetheart deals (I'm sure there are many), and accounted for all departments within Google that influence AppStore, it would be massively smaller and way simpler conceptually. The scale of bureaucracy, inconsistency, bad incentives and accumulated cruft is just not comparable.
Try finding justice on a company-owned platform like Android's app store, or YouTube. I see a lot of stories titled "YouTube shut down my account for no reason", and I never see stories titled "The government shut down my business for no reason".
At least with the government you are backed by the rule of law. With companies it's always "tough luck, you agreed to the EULA".
PS: and never forget that government agencies gave us the Internet, so all those layers and layers of bureaucracy did give us something great and it isn't all bad even if you want to see it that way.
Except that in the appstore and playstore case, those rules do not matter and they are not bound to it, they can decide to cut you off from the mobile market at any point for no reason.
this should not be surprising. Apple has negotiated their fees with Amazon which was [leaked](https://www.macrumors.com/2020/07/30/apple-halved-app-store-....) a while back. this was before they changed the rules about devs earning less than 1million pay only 15%. i'm sure major companies like Spotify get nicer deals while indie devs and small shops pay up 30%.
Because that is just not how negotiations with (or between) big companies work. There are all kinds of customizations to standard contracts for them. From tweaks to liability, to changes in responsibilities, guarantees, insurances, etc etc. And of course fees. You have weight, you'll get results.
So much for net neutrality. We were arguing about the wrong thing all along.
At least on Android, normal users can sideload your app, so you can bypass all of these store policies if you are big enough. For example, see Termux, PornHub, or Fortnite. On Apple, you're just out of luck if you don't want to pay 30% or comply with every technical policy. Want to try out media over QUIC? Too bad, you need to use HLS and only HLS for streaming, or your app will be removed.
Sideloading isn't a solution to this. The average user isn't going to figure out how to do that on their own (and if you disagree, then you're living in a bubble surrounded by tech nerds). There's a reason Google Play is the dominant store on Android even though sideloading has been possible since the first Android devices came out, and it has been a piece of crap through all of that time.
> While there were early signs that the browser ballot screen was influencing browser usage in the EU, with Mozilla attributing some European Firefox growth to the selection page, long-term trends strongly suggest that it was next to useless
If there is a 30% price difference in the stuff they buy, sure they will.
Otherwise, people wouldn't go shopping across town, drive 5-10km more than they would need.
I don't get arguments like these.
If it's cheaper, people will switch over time. Not all of them, and it's going to be a trickle more than a mass exodus but they will do the "sideloading" aka installing apps from non centralized source, the norms in computing since forever...
The privacy/security arguments are marketing bullshit that Apple came up with because they suck on the security side (previously their stuff was "secure" because nobody really cared about it) so they went with a brute force "we control everything" way of "solving" the problem. And all the privacy nonsense are just attacks on the business models of their competitors, they are not any better when it comes to ethics.
Their "sideloading" restriction is like a dumb parent who make extremely strict interdiction about consuming alcohol. The first opportunity the kid gets you will find him drunk out of his mind. Education works, blanket interdiction like prohibition are historical oddities that are unsustainable. There are risks in life, people need to accept them and move on...
>Sideloading isn't a solution to this. The average user isn't going to figure out how to do that on their own (and if you disagree, then you're living in a bubble surrounded by tech nerds).
Disagree. I seen literal children figure out how to torrent stuff.
Also disagree. When Whatsapp was paid, everyone used to sideload it (Telecom services are bad that whatsapp was a very good option, but no payment option in my country). Some people wanted to sideload it because of internet issue, cheaper to got someone else to share the apk file. Sideloading was very easy.
We lost the fight for net neutrality. It took a while but more and more stories are coming out about companies punishing users who dont do xyz and that is perfectly legal for them to do. I'm sure eventually there will be lawsuits, or the current ones will resolve one way or another, about this.
By the way, altstore exists on iOS. Although it is very limited.
We never lost net neutrality, it was mandated in California as soon as it was deregulated federally and that was good enough to stop anyone from trying.
But we did... California has state laws around it but not every company is headquartered in California. Many companies also have tech specific to CA residents then tech that applies to everyone else.
I don’t think it makes net neutrality the wrong fight. Capitalism can afford to fight on many fronts.
That being said, rumor has it Apple is going to soon allow sideloading of apps in some places due to regulatory pressure. (I assume they’re hoping to find a balance where it’s too hard for the average person, but possible enough to avoid legal woes)
As I recall, we got C and UNIX because the conditions of AT&T’s telecommunications monopoly prevented them from competing in software. So they gave away the source code to academic institutions for a comparatively small fee and weak licensing
Tried to find a references for this and found a blog post and comments
Technically, that one also omits the rest of the letter, which is more measured and less punchy anyway, pointing out that many rebellions themselves are founded in ignorance.
This is normal. Markets tend towards consolidation because of the beneficial effects of economies of scale. Absent outside intervention, monopoly is the natural end state of a market. Sometimes this intervention comes naturally (tech changes, consumer tastes change, companies randomly implode), but where it doesn't, it's the government's role to periodically reset the market to a competitive state. This is necessary to have efficient markets.
I wish more people understood this. You can't go full communist top-down economy because it will inevitably lead to sub-optimal and inefficient solution. But full-blown competition will inevitably lead to a "mega" winner, because over time he can use his superior efficiency/technology (whatever advantage makes him better) to buy or starve the competition. In the end when the market is finally dominated by a few players you tend to lose the benefits of efficiency of scale because they abuse their position to raise prices, collude and whatnot.
So, something needs to be done eventually.
I think there are 2 "solutions" to try:
- breaking up a company once it becomes too big; separating the various business it operates, so that they cannot have unfair advantage of consolidation and competitors have a better chance (it's easy to "win" when you can subsidize one branch losses with another high margins...)
- preventing them from becoming so big in the first place by forbidding them to buy any other business. If they have to grow organically it would take lots more time, require more ressource from the main business and take years to be competitive. I never understood why we let some companies swallow another just because it has the money. Companies with too much cash on hand are pointing at an economic inefficiency and it just means they should be taxe more because they are stealing too much ressources from the world.
Anyway, we end up in those situations because we assume a lot of things that are just plain wrong, in the first place the notion that the pie just gets bigger. It's fundamentally false because ressource are limited (natural ressources, numbers of humans, total available time, etc).
When you make runners compete, you give all of them a single, similar lane; you don't just let a single runner push everyone out of a single lane...
But the second case is exactly how our economy works...
More seriously, each of those companies could be split without too much trouble and no loss of shareholder value. Microsoft in particular seems to be made up of components that work against each other.
That doesn't make much sense to me. Modems existed before the AT&T breakup. You can't encode a digital signal for transmission ever an analogue medium without a modem, and a modem seems entirely beside any point of a free internet to me.
Honestly, just getting back to the point that you can write your own app and easily install it on your friends' phones would change the world. The amount of interesting stuff we lose to the inability of hobbyists to tinker with their technology is incalculable.
That doesn't allow you to do a large number of things that ordinary apps can do -- or that "approved" apps also can't do, e.g. by modifying parts of the system in advantageous ways.
You can also obviously just buy a PC and run whatever you want, but the entire point is the barrier to entry. If it's easy, more people do it, and that's good. If they have to contend with a convoluted mess, people give up, and you lose whatever they might have created.
What would be the economic and geopolitical consequences of the US breaking up the only US companies that are globally competitive? Chinese giants will outcompete the smaller less competitive remnants after these kind of corporate breakups.
TikTok is an example of a successful Chinese company that is out-competing US social media giants. If they were a US company, Facebook or Google would've bought and killed them when they were an early startup.
American big tech companies aren't competitive in anything. They're entrenched monopolies. Google, Apple, Microsoft, Meta, and Amazon products are all shit, but users don't really have any other choice. If we break them up, it will create market opportunity for actual innovation in the US.
The question is whether we actually have the talent and expertise to innovate once you remove all of the current artificial barriers (big tech monopolies, walled gardens, etc).
I think we do. At least more than China, where most of their big tech companies seem to be built on stolen and cloned tech.
Is this question meant to be rhetorical, or are you genuinely asking? Because the answer is simple: that's how monopolies work. Monopolies don't need to compete to succeed, they just need some way to exclude competitors. All of those companies have multiple ways to do that for most/all of their products.
> Is this question meant to be rhetorical, or are you genuinely asking?
It's a little of both to be honest. I disagree that their products are shit (in fact some of their products I think are really damn good), and I don't see how short of coercion with government or a private army or something that you could maintain a monopoly with products that suck.
But I genuinely think I might be missing something here. Maybe a better question is, how are they able to maintain their monopolies with shit products? Huge barriers to entry combined with quick acquisition of competitors? That's mostly how Rockefeller did it in the 19th century, but that's not a good parallel either because he didn't have a shit product.
This may or may not be true, but size is not necessarily a predictor of victory, especially in warfare.
History is rife with smaller belligerents defeating larger ones through innovation/force multiplication/asymmetrical warfare.
I think it's fair to say that an oligopoly stifles innovation; you can see it in how expensive and slow companies like Lockheed, Boeing, or BAE are when it comes to providing matériel needed by actual warfighters.
I don't think this is an either-or scenario – you need both – but saying that we can only be globally competitive on the backs of megacorporations is incorrect.
That’s a strong argument for nationalization of large businesses. Competition fosters innovation, and monopoly kills it. Competition with larger companies gave birth to Apple, Google, Amazon and Microsoft.
That must be why you can get Windows laptops that run fast, silent, cool with great battery life and integrates well with their phones, watches and tablets.
And let’s not talk about those great fast Android phones that are still getting security updates a decade later…
Exactly. I forgot to mention the competition between chip manufacturers that makes this possible, which obviously leads to much better chips then a monopoly like Apple could produce.
Why on earth would Google even suggest such a deal? To get the 4% on the payments made via the Play Store? That seems rather desperate.
4% isn't an amazing deal on payments from Spotifys point of view, and 10% for Netflix seems like in insult for processing payments. Normal payment processors are closer to 1.5 - 2%.
Spotify is a long time Google Cloud customer, from the days when Google was essentially buying logos, so it would not at all surprise me to find out that the Play Store deal was tied to a massive GCP commit from Spotify (much like Niantic from the same era). In fact, i wouldn't be surprised if some of the more recent gaming signs from the Cloud business don't also have discount deals with Play.
I'm not an anti-trust lawyer (or any kind of lawyer), but this feels illegal. It would be one thing if big GCP customers were getting discounts on GCP services in exchange for large commitments. But the Play Store is - at least ostensibly - a separate business from GCP. Receiving discounts in one should not require spending in the other...
the closed gardens of mobile app stores don't have the regular healthy market competition that normal payment processors do. it's one of my least favourite parts of building for mobile
I'm just questioning the point in offering a "deal" like this to Spotify, when Spotify can just handle their own payments for less. Is those 4% really worth that much to Google that it's outways the risk of others being made aware of how little payments actually cost Google to run.
Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more?
This clearly wasn't intended to get out, and predicting that Epic would file suit and then it would leak out of the court would be a hard reason to argue against trying to negotiate business in the moment.
I don't think you understand that over at Apple, not paying the 30% is not being on iPhone..period. Not being on the play store is not being on Android for 90% of customers. This is why both are facing major antitrust cases.
That is simply not true.
You can easily set account creation and payment on your website for "reader apps" if you're not willing to share 30/15% with Apple. (and Spotify & Netflix qualify as reader apps). Apple even allows you to put a link to your website for account creation right in the app (they didn't allow that in the past).
Many companies (like Google) move Apple's subscription fee to end users, so don't feel too pity about them. Just compare YouTube premium cost as an in-app purchase and on the website. €15.99 vs €11.99 here in Ireland.
Google had a choice not to offer the YouTube subscription as IAP and just link people to the website. But the conversion rate for IAP is way higher compared to the website link, so they just punish their users, who pay €4 extra every month.
Reader apps are an extremely specific clause, mostly related to their Ebook price fixing lawsuit. Zero of the apps in discussion here are reader apps.
I should also note, that up until recently, Apple specifically had clauses that you couldn't have the link to the website bit AND they had a 'you can't pass the price onto customers' rule.
Reader apps is quite wide category. It includes pretty much all types of content - ebooks, videos, audio etc. Spotify and Netflix falls under it afaik.
I have no idea what world you think you live in..but Apple has pretty clearly defined it mostly as Email and Ebook reading. Zero music or video services have ever gotten an exception. Spotify and Netflix have different exceptions called 'backroom deals' that allow them to have an unfair advantage over smaller players.
Aaah, okay, I was under the impression that you could actually be present on the Play Store as a subscription service and just handle your own payments and that would be perfectly acceptable.
But that makes the deal even weirder, Spotify doesn't have a choice, yet they have a completely insane deal.
While you may have a point about competition, comparing credit card processors and app stores solely on fee structure doesn’t make for an honest comparison because you get to ignore all the other things they do.
Normal payment processors don’t need to maintain the os ecosystem. Arguably Google needs to do the same work as a traditional payment processor AND much more.
> Arguably Google needs to do the same work as a traditional payment processor
Unarguably, they don't need to do that. They want to, because a monopoly on payment processing makes a lot of money.
If 4%/15%/30%/whatever is what Google needs to charge to run their payment processing business, that shows that they're extremely inefficient/incompetent, and the market would be more efficient if other companies were able to offer that service instead. Last I checked, Stripe charges 2.9%, which is even less than what Google charges Spotify in this unicorn deal.
EDIT: the same goes for "store infrastructure" or whatever. If Google offered publishers the option to run their own infrastructure for distributing apps/updates/whatever, everyone would take that deal rather than pay Google's nonsense fees.
Even 2.9% (which is what card payment processors charge as well) is ludicrously high. They make a very, very healthy profit margin with that. One of my greatest disappointments about cryptocurrencies is that they didn't destroy that ridiculousness.
The money largely funds consumer protection products such as when chargebacks have to be executed on fraudulent or other disputed transactions on your card. Zero liability guarantees that the card network infrastructure offers consumers come at a cost which is found here. Think of it as an insurance policy paid on every transaction which explains why it has to be a %.
Crypto offers no protections so no fees need to be taken.
Characterizing app store fees as purely for payment processing is so disingenuous it's hard to even engage.
The reality is these fees are for access to an audience. Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day.
Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.
> The reality is these fees are for access to an audience.
This is called a monopoly rent and is the sort of thing antitrust law is intended to prevent, when it's working properly.
> Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day.
Google gives Android away for free. They choose to do that, and if they didn't then it would lose to a competitor that did, because operating systems are a classic example of somewhere that free software works in the absence of anti-competitive behavior. If Google didn't develop Android then Samsung and Amazon and Canonical and Mozilla would do it, and parts of it would be more like Debian, which would be better.
> Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.
Does the farmer's market also take actions to interfere with you being able to build your own storefront?
I wasn't trying to say that those fees are only for payment processing.
Anyways, to your point about audience: That's BS. The reason Google Play is the dominant store definitely has a lot to do with that, because nobody is going to publish on "My Awesome Android Store" if it doesn't have users. However, the reason they have that audience is because of their anticompetitive tactics. It's all a cycle that feeds into itself, and it's how they're able to become the only game in town and charge literally whatever they want.
Epic has the ability and resources to potentially build a store with enough of an audience to attract more developers and compete with Google Play, but it won't happen as long as Google is allowed to continue acting anti-competitively.
I'm not GP, but that's a really good point and one to keep in mind.
I suppose the question is, did the farmers market threaten all the other land owners if they allowed a competing farmers market to open up? Or throw metaphorical wrenches in the way to a competitor?
Google's exclusivity agreement makes it much harder for alternatives to emerge. Even with this though, I get that they are funding open source development and need to protect it somehow lest it be stolen (cough by Amazon cough) and made a competing platform. I'm quite unsure where the balance should be.
App stores, like payment processors, have economies of scale in the sense that you need a critical mass of users to sign up for them and trust them with their payment info, so you're not going to have a thousand of them, but you could certainly have a dozen. At which point they would have to compete on things like fees and keep each other in check.
But not if each platform has only a single dominant payment processor.
Unless I'm mistaken, Google has made threats, such as "if you include a competing app store, then you don't get any of the google apps, google play services, etc, and you can't use the Android trademark.
We saw in the early 00s a proliferation of "Android" devices that didn't have the Play store, and they were mostly DOA
An unwillingness to co-operate is not generally considered a threat.
> and they were mostly DOA
Maybe those stores should have invested a few dozen billion dollars in building up a comprehensive first-party app ecosystem that made them attractive to users.
Economies of scale, and all. Nobody's going to your farmer's market, because everyone's going to the mall that has a Walmart.
Your comment doesn't deserve the downvotes (which are supposed to be about whether a comment is good/substantive, not the reactionary "I disagree with this" that it's become) so I upvoted it to balance.
You are of course right that there is more work involved beyond a traditional payment processor. However, 30% of everything?? Even the standard 3% that payment processors take is ridiclously high. It's rent-seeking all around.
So, uh... I hate to break it to you, but payment processing is almost as monopolized as mobile app stores are. The fees are not as egregiously high as 30%, but they are still supracompetitive and eat up retailer margins. Payment processing even has similar censorship problems, as evidenced by the campaigns to defund porn companies by cutting them off of payment networks.
Because the deal usually is 30%. Negotiating a good rate won't happen when one side says "Make a deal or we keep you out".
Google's rate is a 'slice of a watermelon vs all of a grape' angle. Both parties probably worked over the advantages that all your Google payment customers would have one-click subscribe. Google knew they held some of the cards and Spotify knew that going off-play store would harm subs while also harming Google.
Spotify's size and consequences of not being on the Play Store are exactly why Google would do this.
Google gives no shits if random app developer isn't on Play. And so holds firm on their cut.
Play without Spotify makes a lot of users ask "Why isn't Spotify on Play?" And probably follow-up with "How do I get Spotify? Download another app store? Okay, I'll do that."
So essentially, the money that Google ceded to Spotify was approximately what they thought discouraging users from installing alternate app stores was worth.
> Why on earth would Google even suggest such a deal?
To prevent Spotify from filing more EU antitrust complaints as they did for the Apple Appstore? [0].
Plus, 4% sounds low, but nominally 4% from all Spotify subscriptions on Android with their imense user base is a very large sum compared to any minor 2-3 person App studio that is charged 20-30%.
Apple and Google virtually want to be a government in digital content area. 30% is a tax. I understand that something like government work (like operating infra and moderation) is needed in app store, but I don't want two California based companies to be a global government.
app stores do a lot more than payment processors though. Maybe not 30% worth, but definitely mote than 1-2%.
The real issue though is that there isn't a good way to handle every app. In a normal world, every app would cost money to buy, and they would only be charged on the purchase prize. But in a world where most apps are free and then there are in-app purchases, there isn't really any other way for those to be monetized but to take a cut of transactions. But obviously these things don't scale the same.
Processing credit/debit- cards isn't that expensive, 30% is a joke, even if you try to justify it with by saying that it helps pay for the store infrastructure.
Spotify pays no feed to Google when they handle the payment processing themself, via some credit card processor and honestly why the hell should they. So Google decide that in an attempt to get even the tiniest amount of payments to go through them, they'd drop the price to 4%... Why is that so important to them?
They aren't charging the fee for payment processing, they're collecting the fee via payment processing. I don't understand why people keep making this mistake. Hell even Epic made it and lost horribly when they made it. The fee is a sales commission, you pay it because you want access to the customer base. They are allowed to deliver you literally nothing at all in additional services and still charge you a fee.
The other stuff they provide exists to sweeten the deal.
I believe the article cited 15% rather than 30% for subscriptions, or 11% if you process your own payments. So [.15, .11] —> [.04, .00], or an overall discount of 11% off subscription revenue they take through the platform.
It sounded to me that, in exchange for that favorable per-subscription rate, Spotify paid $50,000,000 into a “success fund,” whatever that means. $50mm / .11 = $454mm... sounds like they’re basically paying the equivalent of Play Store commission on half a billion’s worth of revenue, without any guarantee that they’ll actually be able to sell that much new growth through Play Store. That feels like sharing the risk in a way that isn’t too out of the domain of reason.
From [0], they added about $2bn in revenue year-on-year in 2022. Although we don’t know the term of this Play Store agreement (or what a “success fund” is), paying an amount equivalent to the normal commission on 1/5 of that total annual growth figure seems like a pretty nontrivial amount to commit.
30% is because most transactions, early on, were around $1. And processing fees are usually $0.25 + ~3% = so 28% of the average transaction.
When you start applying that 30% to $15 spotify subs, $50 uber rides, $60 video game, then a bunch of in-app purchases ranging in value; the math falls apart and if you have scale to do it, the negotiated rate makes more sense for those businesses given the average transaction amount.
It just remains hilarious to see Google under fire for negotiating secret deals to keep companies on the play store. Apple got this right the first time.
My point is that Apple doesn't need to do the same, because there's no alternative to the App Store. And that's what's funny. If you don't allow competition in the first place, you don't get bothered for "unfair competition" by antitrust regulators.
Interesting. I guess in this case it's trying to prevent Netflix from switching to a web app. But apple is still in a much stronger position because a native app isn't an option.
For me, I think the open question is can they deny 3rd party app stores or side-loading apps. Then, we get into the "Microsoft installing IE by default" fight. How can a 3rd party app store compete? (I don't have an answer)
> the open question is can they deny 3rd party app stores or side-loading apps
This is somewhat the basis of the lawsuit that actually brought this out.
The accusation is (iirc): Google has backroom deals with OEMs to prevent them from having any market installed by default except for Google Play. This is what stopped Epic from continuing with their own mobile market idea, as no OEMs would agree due to this.
That argument works when they don't own 70% or so of the apps in the world. At some point, they should be held accountable for what they do on their store, just like countries would be held accountable to what happens to their citizens.
If Play Store decided to ban or restrict, say, Uber or Netflix, that's just billions of dollars of economic damage on a flick of a finger.
They hold more power than banks. It's surprising they aren't tightly regulated like banks would be.
This is how to ensure your economy isn't competitive with other countries. Large companies with export businesses are more competent and successful than small companies without them. It's good for Korea that they have Samsung.
Completely the opposite. That is how you get the Big 3 automakers during the gas crisis. Lumbering bureaucracies insulated from competitive pressure, until they're not, and then a foreign competitor eats their lunch.
You need aggressive internal competition to prepare your industries for aggressive external competition.
That doesn't actually fix it. CEOs already want to sell more stuff.
When you have a large vertically integrated bureaucracy, the integration ossifies. Your cars are heavy so they need big engines and use a lot of fuel. Your big engines wouldn't fit in a smaller car. A smaller engine wouldn't be powerful enough to accelerate your heavy cars. So if gas prices suddenly go up, you have to throw everything out and start over from scratch.
Which you can't do overnight, even if someone is threatening to put you in jail. So now Toyota is bigger than Ford, GM and Chrysler put together.
Banks aren't a monopoly and are still dangerous. Also the apple app store is a "hard" monopoly, while Google's is a soft one, but Google still holds a bulk of the power despite major competitors.
Also not all monopolies are dangerous or evil, e.g. Steam.
That doesn’t work when you have a monopoly though. This isn’t a bakery or “totally legitimate internet website making business that absolutely is real and wasn’t invented specifically to bring a case to the Supreme Court”
An app store isn't a monopoly, it's a two-sided marketplace. If you claim it's a monopoly then it should also be a monopsony, which would cancel out most of it.
I guess I'm usually in this camp with regards to Apple and I suppose it's strictly okay for Google to do this.
However, since these markets are so dominant, I'd like any discounts to be transparent and offered to everyone at the same terms. Apple's public discount program works like this, although who knows what secret deals they have.
Related: are utility companies in various jurisdictions allowed to strike deals like this?
My standard is consistent. Apple and Google control their respective OSes. They are not general purpose OSes and there's nothing wrong with locking down the software users can run. Having a store and charging a commission is also fine, however it makes sense that all developers should be on equal footing with respect to the store and their app size(in terms of download) i.e. no sweetheart deals.
I do think there's a strong argument to be made about forcing Apple and Google to facilitate the ability to install a different OS if the user wishes.
I was about to write that maybe a discount could be OK, due to some kind of high volume income generation for Google, but then again, wouldn't that mean that they should have to create some kind of discount tiers which apply to all depending on a certain criteria?
The marginal cost for Fortnite is lower, so Google kept squeezing. It's standard price discrimination. The problem for Google is it also controls the marketplace.