Streaming Wars | Apple and Spotify Fire Shots
In the ongoing battle for our hearts and ears, Apple and Spotify have been engaged in a very public feud the past couple days. It all started on June 28, when Senator Elizabeth “You Go Girl” Warren (D-MA) gave an anti-monopoly speech that fired shots at Apple as one of the tech giants who flex their corporate muscles to destroy competition.
“Google, Apple, and Amazon have created disruptive technologies that changed the world, and … they deserve to be highly profitable and successful,” Warren said. “But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again.”
A day later on June 30, Spotify piled on when word leaked (probably by them) that the popular streaming company had sent Apple a letter accusing them of using “the App Store approval process as a weapon to harm competitors.” Basically, Spotify accused Apple of making it harder for them to compete by delaying updated versions of their app on iTunes.
Then on July 1, BuzzFeed News obtained a letter sent by Apple’s general counsel Bruce Sewell to Spotify general counsel Horacio Gutierrez that said, “We find it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting to rumors and half-truths about our service.” In layman’s terms, Apple went all “Steve Jobs” (the Michael Fassbender not the Ashton Kutcher version) on Spotify, telling them that they shouldn’t be bitching about “preferential treatment.”
This is actually the latest tit-for-tat battle between the two music streaming giants that goes back to Spotify having an issue with Apple taking a 30 percent cut for App Store software, which is their standard company practice for any third-party developer wishing to sell a paid app. Spotify has admittedly tried to work around this fee by passing the cost onto their consumers which is why it’s $13 a month for a premium service when purchased in the app rather than $10 a month if you buy it online (those sneaky Swedes!).
Apple finally had enough when word got out that Spotify removed the $13 option and sent emails to its Apple app users urging them to purchase the service directly from their site, which is why Apple said “GFY” when Spotify tried to update their app. Apple has clearly drawn a line in the sand, pointing out that the new App Store now allows sellers of subscriptions (like Spotify) to keep 85 percent of the revenues instead of the standard 70 after the consumer has paid for a year. At this point, it seems as if Apple has all the leverage, but we get the feeling that this ongoing war has just begun.