Apple’s App Store Pricing is “Anticompetitive”, Say Rival Music Services

According to a report by The Verge, music streaming services are not happy about Apple’s 30% fee policy towards any sales through its App Store. “I get that there’s some administrative burden so they should get some kind of fee, but 30 percent is ******* bullshit,” one music industry source said. Another industry source added that Apple controls iOS policies to give itself “a price advantage”.

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Apple currently charges the afore mentioned fee towards each and every sale made through its App Store, which also includes subscription services. That means if a company such as Spotify wants to sell its premium subscription service, which costs $9.99 a month, through the App Store, it has to raise the price 30% higher to $12.99 to grab the same revenue. On the other hand, Apple can still offer Beats at a lower price. Hence Spotify and many others in the music industry believe Apple’s App Store tax gives them an unfair advantage over the competition.

“To make things worse, Apple’s rules disallow companies from redirecting users to the browser to get the lower subscription price. “Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a ‘buy’ button that goes to a web site to purchase a digital book, will be rejected,” Apple wrote in its App Store review guidelines. That means if you tried to sign up for Spotify or Rdio or Tidal through their apps in the App Store, you would think they raised their prices.

“Thirty percent doesn’t go to any artist, it doesn’t go to us, it goes to Apple”, one music industry source said”.

With Apple pushing hard for the end to Spotify’s free tier, it’ll be interesting to see how long the company can keep offering the service.

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  • matt

    Ummm….whats with the profanity in the first paragraph?

    I think its more professional to just bleep that out 🙂 just in case there are some younger kids that like and come across this post….just a suggestion 🙂

  • Done, thanks 🙂

  • johnnygoodface

    1) It’s called “competition” my friend. 2) We still don’t know what percentage Apple will get back to the artist, but maybe this time the artists will get more than the petty cash they’re getting right now. I’m sure Apple can’t do worst than the way those artists have been treated all those years…

  • Salvador

    Spotify is playing the victim game right now with the rumours that Apple is pushing to end the “Free” service. The truth is “free” service is not paying to Spotify (advertising there does not cover costs). So, it’s the premium customers who really pay for the free service. If Apple really force them to stop offering “free” subscription, it will be Apple the “bad” guy and that will help Spotify to convert lot of “free” subscribers to paid ones.

    Spotify has today around 45MM free users and 15MM premium subscribers. If they stop the free service, they could easily convert 5MM from free to premium…. and that my friends, will be a BIG win for Spotify. They will have more income with lower expenses not having to recover costs from the free service.

    If they want to be competitive, they could assume the 30% tax from the Apple Store and still be profitable. They know that but they have to play the victim game.