Lost in all coverage of this battle of the middlemen is the effect on the artists actually making the product. How would lower prices make any difference in Spotify’s royalty rate bullying in a market saturated with alternatives that they already dominate? Are there really that many more consumers who want but aren’t already paying for a streaming service or using free alternatives? There are legit discussions to be had about app store policies, but I can’t see how the music streaming context is the place to have them.
Fairer App Store policies allows more streaming choice for consumers, including potentially opting for "fair trade"-style offerings that give more to artists.
Right now, both Apple AND Spotify have an anti-competitive advantage due to the app store (with Apple Music getting a massive advantage, and Spotify getting a better deal than new competition entering the market).
Although a lot of streaming payment rates are set upstream of streaming services.
What policies need to be made more fair? It makes no sense to make Apple pay itself. And surely, Spotify is subject to the same fees as any other music streaming business.
And all fees can be avoided by not taking payment via the App Store. A streaming service can even accept payment in the Safari browser in iOS via Apple Pay, and it would not cost them anything.
99% of musicians being paid small amounts has only to do with the population at large liking a very, very small percentage of music much more than the vast majority of music.
> And all fees can be avoided by not taking payment via the App Store. A streaming service can even accept payment in the Safari browser in iOS via Apple Pay, and it would not cost them anything.
That was the crux of the case. Spotify was accepting payment through their web site in addition to taking payment via the App Store. And because they were processing their own payments, they could offer the same subscriptions for a lower price than on the App Store.
The issue was that Apple was not allowing them to inform App Store users that they could pay through a browser.
Yes, agree that like any other technology, the artists typically get the short end of the stick regardless of the delivery platform. Even for the megastars, more money is raked in from sources other than streaming. (With notable exceptions, like megastars owning their own masters instead of a label, or blockbuster established songwriters.)
Are you sure about this? I hear the rates vary by platform. For example Tidal was pushing for much higher royalties as part of its push to get more artists to sign with it.
Reasonably. Without any specific knowledge, Spotify doesn't actually own the rights to music - it's the rights holders (labels) that chose to make their music available to Spotify under the terms they want.
It's 10 years old at this point, but Sony's leaked contract with Spotify basically outlines that there's no such thing as a 'per stream' rate. Roughly, all the money available was split between the labels (with most favored nation clauses to get them even more money) https://www.theverge.com/2015/5/19/8621581/sony-music-spotif...
Also:
> Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate; the royalty payments that artists receive might vary according to differences in how their music is streamed or the agreements they have with labels or distributors.
> In many cases, royalty payments happen once a month, but exactly when and how much artists and songwriters get paid depends on their agreements with their record label or distributor
Yes, the rates vary by platform. In the US, there's a combo of statutory (or CRB-approved) rates on the publisher side, and negotiations on the label side.
On the publisher/songwriter side, streams are not "public performances" under the Copyright Act (in the US), so royalties are not handled by the court-sanctioned monopolies that have been in place since the early 20th century (ASCAP, BMI).
And if publishers and/or labels were able to obtain better rates - via direct negotiations, the CRB, or otherwise - presumably some of those fractional cents per stream would trickle down to the artists and songwriters who are already in notoriously oppressive contracts with the major label and publisher oligopoly.
It's definitely important, but the DMA isn't a response to the existence of music streaming services. It's a direct remediation for Apple's uniquely anticompetitive practices, which affects everyone, artists or not. Arguably, this was a necessary first-step to prevent other platforms from following Apple's example and presenting less choice to the user.
Hard to see what harm to competition there is in a market that has steadily grown, with Spotify at the top, during the entire period in which Apple was allegedly harming the market. Spotify doesn’t pay the Apple tax and yet charges the same as all the other market participants.
Going to be very interesting to see what the EU courts say in a few years.
This seems to carry with it the implicit assumption that if one competitor is growing, no harm has been done.
I don't see any reason this must be true. It's totally possible, and indeed reality, that both harm has been done, and at least 1 competitor is growing. So there seems to be no mutual exclusivity there in real life.
That’s true. In the same vein, competitors stagnating is not necessarily proof of anticompetitive harm.
But it’s a strong clue that maybe the EU got this one wrong. The fact that Spotify doesn’t pay the Apple tax and yet still is the market leader shows you that, at the very least, Apple is not foreclosing competition.
It seems much more plausible to me that America is guilty of protectionism by neglecting to regulate their domestic tech businesses. Europe stands to lose nothing if Spotify goes bankrupt, but disrupting the mobile duopoly threatens America's iron grip on exported surveillance.
I'm glad the US does not adopt EU policies. Else we might see the dearth of progress in consumer technology that the EU has experienced over the past 20 years.
Someone actually has to incentivize building things and getting shit done, and the EU is clearly not it, as the last two decades show.
(There is probably a middle ground between the US and the EU but I'd rather err on the side of not shutting down consumer technology progress nearly completely like the EU has. Regulations take years to undo when you go too far.)
Regulations are often touted as the reason why EU can't compete (which is anyways a narrow perspective), but nobody ever considers the fact that the US had such a huge early mover advantage thanks to the decades after world war II, during which Europe was busy rebuilding after being bombed to rubbles. Thanks to network effects and compounding growth, being the early mover determines most of later outcomes, IMHO.
Say what you will about the free market, but assuming that businesses will always make the right decision is a good way of ensuring your food is rotten and your warranties go un-honored. Or worse.
You can theorize all you want given a strike in 1892, but in the last 20 years demonstrate this is not the case. Hundreds of disruptive startups have emerged and become successful. Now compare this same ones to the EU.
> You can theorize all you want given a strike in 1892, but in the last 20 years demonstrate this is not the case.
The last 20 years demonstrate that America will charge it's largest domestic tech business with a breakup over just their stance on third-party browsers. There's not much left to the imagination.
> Hundreds of disruptive startups have emerged and become successful. Now compare this same ones to the EU.
Like ARM and STMicroelectronics? Once you look past the West-coast hype machines, there's quite a few European businesses that haven't been challenged by American competitors, startup or otherwise. Some of them are even considered critical components of American businesses, if you could believe that.
Care to expand on exactly how EU's regulations on antitrust is responsible for what you consider "the death of progress in consumer technology"?
The much simpler explanation is that the USA is a 340 million people market, richer, and more homogeneous in terms of language and culture for companies to develop products, no need to localise products into 30-50 languages to reach all the potential markets, no need to expend on marketing campaings tailored to some 20+ different cultures, with varied consumer behaviour, etc.
Apple Music subscription can even be purchased in the System Settings of Apple's OSs (through Apple One); it doesn't pay 30% to Apple when subscribed in the OS or through the Music app; it's distributed embedded into iOS, macOS, iPadOS without you downloading the app.
It's anti-competitive, clearly, which harms consumers.
I really want to understand, what's the actual argument for Apple here?
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?
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.
> 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").
> 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.
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.
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.
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.
Nothing? It definitely pays all the fees to have access to Apple Development Program for all its iOS, iPadOS, watchOS, tvOS developers, it pays for all the Mac machines required to develop for iOS, iPadOS, watchOS, tvOS. Those are required to develop for Apple's platforms.
It pays nothing because it cannot pay 30% of subscriptions to Apple and be a viable business, Spotify already pays out 70+% for royalties, if it had to pay another 30% for every subscription through the App Store it would be bankrupt.
> calculated that, in the European Economic Area, around 1.5 million subscribers to the main music streaming apps—other than Apple Music—on iPhones and iPads ended up paying 2–3 euros per month more as of July 2023 and throughout the entire duration of the subscription, compared to what they could have paid outside of the app. This was due to the in-app commissions imposed by Apple on developers, which were then passed on to consumers through higher subscription fees.
Maybe, but that seems unrelated. As a consumer living in the EU it's good to see that effective antitrust is a thing here. Which BTW historically the US was very good at. It at least in principle enables more efficient markets.
That we have an issue with entrepreneurship and bureaucracy in Europe is true, something that should be improved, but that is not achieved by enabling monopolies.
These meme is not as valid as few years ago since all the computer based advertisement industry has been commoditised and investors focus was redirected to AI and hardware.
This lock-in is an attempt to keep customers paying despite not providing any value over the competition to the customers.
All the rent seeking attempts are clues that "tech" has become like the old industries.
Even more worrisome, the whole American culture seems to be Europeanised. Traditionally since the last few decades, USA was the land of opportunity and innovation where everyone was welcome and it didn't matter what is your background but now Americans are acting like the Europeans, clinging to the properties they own, rent seeking from the past success and freaking out about foreigners, races, border control and cultural divisions.
Isn't it strange that as USA is slowly losing its edge, it becomes like Europe? It used to be that Europeans were freaking out about their data being collected by American corporations and today its the Americans freaking out about Chinese ones.
Regardless of the validity of your comment: How is this relevant? Is it because Spotify is Swedish? I assure you, this is not EU protectionism, this is EU consumer protection and anti-monopoly behavior - something US regulators seem to have forgotten for the most part.
I love Apple, they enabled me to turn from a waiter to a startup founder to a sold startup to a Google employee to a lifestyle I could never have imagined or gotten otherwise.
I was writing iOS apps when it was iPhone OS, and there wasn't an SDK.
I don't recognize these sniping negative off-topic comments that have become a regularity on articles about the App Store over the past 3-6 months.
Way back then, we were extremely suspicious of the 30%. And we had no idea that would metastasize into, inter alia, not even being able to mention there's another way to pay.
We never, ever, in a million years, would have imagined ads in the Settings app, for all users, pushing you to sign up to be billed for Apple's competing service(s) that don't have to pay the 30%.
Or Apple saying they they needed 30% from payments for real-life services, like say, concert tickets.*
I accepted the "it's an appliance and safety is paramount and people could do payment scams" argument back then.
We're 15 years past, and there's plenty of scams on the App Store proper.
I don't fault Apple for this, like all gatekeepers, the scale got far past what anyone imagined and it's an impossible problem.
If Sony was requiring 30% from every video producer played on your TV, and they couldn't even mention there was a way to save 30% by simply calling a toll-free number, it'd be obviously wrong at some point.
Certainly now.
That's where Apple is.
* there is an exemption for 1:1 services. There's absolutely 0 rationale for that, leaving me to guess that it is because 'concert tickets' are easier to bully in the court of public opinion than 'taxis'
You're thinking like a business owner. The people writing these sniping comments about the EU are acting like cult members, because Apple is a cult that happens to be in the form of a for-profit corporation.
To you, 30% is someone your margin and then some. To Apple fans, it's a tithe that must be paid to the cult leader.
Excellent point - that's probably why the conversations were so much more vivid and interesting too -- we were all actively trying to figure out how to square A) building cool things for people B) being able to eat C) uncertainty if, as in the words of Stevie J, a rogue app could take down Cingular's network.
In reality, my primary concerns ended up being I used the App Store payments system so I had to give up 30%, meanwhile our well-funded competitors just did a "external account subscription".
Now, I've left Google, and I'm building an app that integrates multiple AI services. User places deposits and we charge out of the deposited amounts.
I feel ugly and complicit in user abuse by having to charge a 30% premium over the actual cost, without being able to even mention there's another option
It has less to do with Apple, and more to do with Americans worshiping at the altar of corporations. Anything that curbs the unfettered unlimited unchecked power of megacorps is seen as personal assault on the very idea of freedom, or free market , or some other such ideal.
Just a reminder that Apple's anti-steering practices, which the European Commission has a problem with here, were found to be against California’s Unfair Competition Law and the Supreme Court of the United States would not review the case despite appeals.
The conversation here is really degrading, when EU is mentioned. People down vote for the sake of down vote every opinion that is not in favor of EU, so they can silence it?
It is really disappointing to see such behavior here on HN.
It's not exceptionalism if it's true. The EU's very culture lacks the "get shit done" mentality present in the US. On average, people are less bold and take less risks.
This is evident in the lack of meaningful consumer technology businesses over the last 20 years and a dearth of startups precipitated by hand-wringing VCs that would rather invest in land than ideas. As such, the EU has missed out in trillions of euros in growth and millions of jobs.
Even stretching back to WWII we can see that, from daylight bombings to Normandy, American military strategy and culture was much more bold and high-risk, high-reward, which is what you need to get shit done.
People are more risk-averse in the EU and that significantly slows the pace of progress. As the EU's share of the global economy continues to decline, something will have to give. The EU encourages inheriting wealth and punishes building it.
