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FTC Officials Looking Into Apple's Streaming Business Model, Say Sources
Apple may have a bigger business problem than displeasing Taylor Swift with its new Apple Music service; According to Reuters, U.S. regulators are said (by anonymous sources) to be looking into Apple's treatment of music-streaming rivals, now that the company has gone from selling only downloadable music to competing directly with alternatives like Spotify and Pandora. A slice:
While $9.99 has emerged as the going monthly rate for music subscriptions, including Apple's, some streaming companies complain that Apple's cut forces them to either charge more in the App Store than they do on other platforms or erode their profit margins.
The Federal Trade Commission is looking at the issue but has not begun a formal investigation, said the three industry sources, who requested anonymity. The agency has had meetings with multiple concerned parties, one source said. The agency meets with companies routinely, and a formal investigation may not materialize.
Remember when Apple used to make computers?
Pepperidge Farm remembers.
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And get off my lawn!
This could be a cut-and-dry case. There has already been a lot of history with providers that also distribute. Typically you cannot put your competitors in a position where they cannot compete by controlling distribution. Of course, the details will determine the outcome; but, we've disallowed power companies selling electricity to dip into the profits of their electricity selling competitors by charging exorbant fees to use their power lines.
Yes, the power line fees are still there, but the companies that maintain the were forced to spin off the distribution network as a separate company, with independent management. I'd love to see the Apple Store do just that. It would separate all of the times when Apple abuses it's store front to put their products first at the expense of what people want.
It doesn't seem surprising that the FTC would be nosing around. Apple got caught with their hand in the cookie jar, pretty damn seriously, in their 'negotiations' with book publishers(apparently Steve doesn't know not to commit illegal conspiracy over email...); and now they have an arrangement where they specifically forbid any of their competitors from doing anything in-app that would circumvent Apple's 30% cut(apps that can only be signed up for online are OK; but such apps are forbidden to link to the signup page in-app; either no sign-up information, or Apple-provided payment mechanism only); which more or less assures that they'll be able to undercut their competitors on iOS, unless some miracle has made the labels 30% or more more generous in their dealings with that competitor.
The barring a successful claim that iOS doesn't actually have market power; which seems unlikely, I'm not sure why this would pass scrutiny now that Apple has a direct competitor in the water.
Apple charges directly for music as a competitor.
Apple charges competitors a cut for being on app store.
Nice. Government can't complain as it does this all the time.
Sell lottery tickets, keep half off the top. Remaining half goes out as prize money. Tax that at 39%.
Net haul from lottery: ~70%
Ironic government would quickly jail a private gambling operation that house-lopsided.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
But looks like someone shorted apple stock and needed an event to make it pay, unnamed sources...might not materialize what a vague bunch of shit.
Apple just needs to have the streaming music division pay the appstore division the same fees as everyone else to level the playing field. The fact that they own both competing divisions then becomes a moot point, legally.
I do not fail; I succeed at finding out what does not work.
We all should understand by now how Apple works. The only difference is that today Cook cares less about product and more about bottom line. At least Jobs
pushed out decent products that held up and were worthy of the price. Now we know Jobs did some dirty deals with Apple books and Apple paid they price. So we
should not be surprised they would so it with music too. Buying Beats probably had more perks then a streaming startup and high image product line in headphones. No Apple bought some other goodies with Beats that most definitely benefited Apple.
Eroding profit margins is to be expected when competition enters the market place. That claim by itself should not be good enough to file a complaint. If they mean underpricing in order to bankrupt the competition, they should state that, otherwise there is no formal complaint here.
Choosing the lesser of two evils is a choice for evil.
Don't use apple products, problem solved.
I do not know this singer or anything about her but, really, what is your point? Why is this important and how does it pertain to the subject at hand?
"So long and thanks for all the fish."
Is to have Appl€ get their vigorish at the expense of competitors. Why compete fairly when you have a built-in cult?
Apple = Slashdot Clickbait
Apple going into a new business that other people have been into for a while = FTC investigations
Translation: we don't care if anyone screws with the customers or the artists . . . until someone makes a profit doing it, then we investigate/fine/appoint some lawyer for millions/give business advantage to the businesses that can't figure it out
Redistribution of wealth is a devil . . . until it's to established businesses . . . then it's, uh, free market? No, uhh, fair competition!
If you don't like Apple's policies, don't do business with them.
The root of the complaint is that Apple is giving itself a competitive revenue advantage in this market. If an iOS user buys an Apple Music subscription, Apple gets $10. If that user buys a subscription to another service through an iOS app, Apple gets $3 and the subscription provider gets $7 - EVERY MONTH. The margins in streaming music are small, so giving all that money to somebody else hurts the streaming companies. (It also hurts the artists because of the way streaming payments to artists are calculated; the artist share is now 70% of $7 rather than 70% of $10.) The other services can sell subscriptions through other channels, in which case Apple doesn't get any money, but Apple won't let them promote those other channels in the app.
A reasonable compromise might be to allow Apple to get their 30% once. The app would take your first month's fee (with Apple getting a cut), but after that it would redirect users to the service's web site to buy an ongoing subscription.