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Even With Double the Subscribers, Spotify Says Apple Will Always Have an Edge Owning the App Store (techcrunch.com)
On Wednesday, Spotify filed for a direct listing in the U.S., sidestepping the traditional IPO process, and now we're starting to see some of the true financial guts of the company -- and some of the significant risks it faces from challenging services from Apple and Google. From a report: Apple, for example, charges apps a percentage of revenue for subscriptions processed through the App Store. Apple Music, meanwhile, will always deliver Apple 100 percent of the subscription revenue that it receives from subscribers (sans record fees and all that kind of stuff, of course). Apple, too, has a direct integration with its iOS devices and also a huge amount of brand recognition, even though Spotify is a massive service. Spotify says it has 159 million monthly active users and 71 million premium subscribers, while Apple has 36 million paying subscribers as of February 2018. Spotify said, "In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. As the market for on-demand music on the internet and mobile and connected devices increases, new competitors, business models, and solutions are likely to emerge."
that Apple doesn't give away their razors, and people are willing to pay a premium for the ability to pay for Apple App store goods...
Spotify said, "In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us..."
Sounds like lining up an excuse for investors.
... discovers competing with a monopolist is tough. News at 11.
The article says that Apple "charges apps a percentage of revenue for subscriptions processed through the App Store". But what forces them to process the subscription through the app store???
Take Netflix as a good example - you don't subscribe on the app store. The app is completely free. You subscribe once using a credit card for payment, and then fill the account information on any number of devices your family has (tv boxes, phones, tablets, etc.). These devices do not even have to have - and often do not have - the same Google or Apple account on them.
*That's* the way of the future, not going the subscription through Apple, letting Apple take 30% of the money and at the same time, not accepting that families own several devices and expect to be able to share the subscription on all of them.
Impulsivity. You're listening to Spotify and they play an ad that drives you over the edge, so you consider getting their paid service. Well, if you're in the app to do it, Apple will get their cut. Otherwise spotify will ahve to make you visit their website, log in, enter all your payment information and then buy the subscription.
Whereas using Apple Pay or Google Pay, it's a couple of taps and you're subscribed.
So the general user experience is you can capture the impulse shopper if you're willing to give up a part of the money or force the user to go through hoops and by the time they're done, they cancel because it was just taking too long.
The real question is - is the added hassle and abandoned purchases using the roundabout way get you more than if you gave in and simply let people impulse buy.
Great point. And not mention that Spotify has a free tier which many listeners are totally happy with that level of service. If they want to compete with Apple and Google they need to eliminate the free service option.
They can use some 3dparty sites for this purpose like https://narrativeessays.org/. It would be interesting to investigate.