Spotify and Google Announce User Choice Billing(newsroom.spotify.com) |
Spotify and Google Announce User Choice Billing(newsroom.spotify.com) |
I mean, I guess I'm not cutting my own silicon wafers in my chip fab in the basement so who knows what's really in the radio circuitry, but this is certainly enough ownership for my use-case.
If this was anything vs Apple I’d take Apple.
That’s the ranking of trust I have as far as customer support goes. It’ll be a crap fest when match.com or some other atomic level shyster markets their way into sounding more reputable than they are.
I agree with your payment hierarchy 100%.
Oh **** off. Publish the Android MADA to the public, lol. Also, reinstate Fortnite then?
Great, you cut a deal, can we not pretend that it's an openness thing though? We know it's not.
I keep getting near-free SiriusXM deals, and with the integration in my car, why not. Then I start Spotify after two weeks, and it takes five minutes to load.
Not related to payment but recently Spotify is half broken (like unusable search) if I block calls to Google in Little Snitch on Mac.
This situation looks like Google allowed Spotify to add their own payment system with some terms. The obvious one is that they need to keep Google's payment system alongside their own. A less obvious (but IMO likely) requirement may be that Spotify cannot offer a much lower price through their billing system to incentivize users to switch (100% assumption here).
From the outside, this looks like a pro-consumer move: consumers get more choices (even if the prices are the same). But the reality is (probably; I'm just assuming here) that Google still has the power to shove their billing system down developers' throats, since there aren't yet any laws or rulings to prevent it.
So even though the writing in this press release makes it seem like a pro-consumer move, I hope it doesn't take any momentum away from all of the antitrust lawsuits. Google's (and Apple's) monopolies need to end. In an ideal world, Spotify would add Google billing (and others) as options to attract more customers, not because Google is forcing them to.
I would like so much that, one day, the whole tech community would decide to call out loudly each time of abusive PR like that is published. With something like "no one is duped by your shit, we are not stupid enough".
"User Choice Billing" => it is a feature when we don't racket you.
"When users choose Google Play, it’s because they count on us to deliver a safe experience, and that includes in-app payment systems that protect users’ data and financial information." => No, Google says that but users don't. Remember it's a racket they have no choice than using the Google store in most cases to have their device working. No one let you the choice to install your bank app from anywhere else than the play store.
"We think that users should continue to have the choice to use Play’s billing system when they install an app from Google Play" => this is legendary as a sentence: we decided that you will not have the choice to integrate our billing system. But we said the work 'choice', so like in communist Russia, it looks like that you decided to use us (...without constraint...)
"We also think it’s critical that alternative billing systems meet similarly high safety standards in protecting users’ personal data and sensitive financial information." => Even if the user willingly don't want to do business with Google's racketeering shit, still we decided that we will decide what the user and app developer can do. Because... fuck you!
Big companies arguing for "fairness" is absurd and in the long run it will blow up in their faces.
In a society that prioritizes "fairness" over capitalism, Spotify and Google are not allowed to exist.
I wanna vomit. The fix is just deleting 3 lines of your policies. The world will innovate on its own. No need to limit innovation to a couple companies who are big enough to negotiate.
my opinion: a couple million dollars invested in F-Droid might do the world a whole lot of good. if you were say, epic, you might consider an anonymous donation.
I'm not a fan of either ecosystem really, but Apple is definitely worse on this one metric because there is no ability to NOT pay them.
Fdroid would not be a good investment for Epic. Why would you invested in a store that you can't even put your own games in?
Google is also working with other developers to test third-party billing in the Play Store that will allow users to bypass its own billing system.
You see this pattern repeatedly and people will bring up things like the Pareto Principle or argue it's better to squeeze the profits for as long as you can but ultimately some government or court will take away your monopoly.
As someone in possession of such a monopoly it is always better for you to control how that happens. Having it decided for you could be truly disastrous. Any government investigation could widen in scope to areas it otherwise wouldn't.
I predict App Store cuts will ultimately drop to a far more reasonable 10-15% including payment processing or 5-10% without.
And I know you think this is somehow unique to Apple but it isn't. Channel costs have existed probably for centuries and are present in every industry.
Traditionally printers/publishers took 85-95% of revenue from authors. Now perhaps you can argue that there's more costs involved in printing that running an app store, but an app store taking 30% sounds like a great deal in that context.
'Engagement' is similar, but more of a case of people forgetting that customers to not care about your KPIs.
Given a choice of Apple vs. anything, I can't see myself choosing anything over Apple.
I only see a benefit to developers for this, but from a user prospective going with another system is a downgrade.
Assuming google works like Apple (correct me if I am wrong), disabling a subscription should be able to happen from a central location with a click or 2.
If I instead go with the billing through a company not only do they now have my credit card information, but I have to go through them to cancel. Meaning they can send me through screen after screen trying to convince me to stay (dark pattern) or even worse forcing me to call to cancel.
As a user, if you want to offer this fine. But as long as the ability to subscribe through Google or Apple is not removed I will be fine. But if this starts a trend of more and more apps having their own billing that then uses dark patterns to keep me subscribed... I will just end up spending less money on subscriptions than I currently do, and I have quite a few subscriptions.
To the people who think the exorbitant fees are okay: Imagine a world with no cash. Now the payment card companies decide they want 30% of all transactions. You think that would be reasonable?
The only reason the phone OS companies get away with it is lack of real competition. The regulatory environment is very slow in catching up - it's not more than a few years ago that the EU finally hit the payment card companies.
And yes, the EU also has something to say when it comes to dark subscription cancelling patterns.
But certainly, if I subscribe to The Economist I want as much of my money as possible to go to the journalists who actually write the content.
Just so that we're talking on equal terms here, card processors and networks solve a massive amount of problems that existed with cash. Pre-card, many stores setup credit accounts with individuals, had book keeping practices to deal with, and had to chase down credit lines they themselves offered. Even with debit cards, card networks facilitate the ability to automatically move money between parties and give customers the ability to dispute/chargeback fraudulent transactions easily. If you physically hand a merchant cash, you can't claw that back without a legal process, whereas you're afforded protections by the card network.
But the 30% cut is completely different from card processors. Of the 30% to Google Play or to Apple, a small fraction (2.9%ish) is actually the card overhead. The rest is split between pure profit, infrastructure, and whatever else gets tacked on.
Cards definitely offer important things to facilitate transactions that are objectively better than a pure cash world for most people. But it's important to call out crazy cash grabs like 30%, which is unheard of even in the payment network world.
However to be clear, that percent is in the same area that game consoles and I believe Steam (someone correct me?) charge. And we accept that. When the 30% rule for the App Store came down, our smart phones were basically the same as a game console. Most people did not expect these devices to become the central part of all of our lives. At least not in this way.
Now that it has, than sure the percent needs to be lowered and I am not arguing that (I said in another comment the 30% is worth it for me personally but doesn't mean I am ok with it).
That's an unlikely combination. So the viable alternative is a middle ground. A central app store and subscription management takes a cut/adds a tax. I'm ready to pay say 1% or 2% for that service.
I don't really care for this attempt at analogy. The cut that Apple or Google takes is more similar to the price manufacturers pay for shelf space in a retail store. I'm guessing that in many instances these kinds of charges amount to far more than the 2-3% a card processor takes. And frankly, 2-3% is already ridiculous.
What you did there is subtle, but you're comparing apples to oranges. "payment card companies" charge 2-3%. It's platforms like Steam, Play store or App store that charge 30%. Those are not comparable.
I'm not arguing that 30% is the right number, but the analogy is very flawed. Ask anyone what % of their game sales comes from Steam vs their own website/itch/humble/epic. Let alone the dozens of other things that you get with a few lines of code (cloud saves, free in-game text/voice chat, workshop, marketplace, free download and easy patching, achievements, etc) and without having to host a single server or maintain anything. How much would it cost both in development but also hosting cost to code all of that yourself?
More like a world with only endcaps.
The difference between the app stores and retail is that every SKU has a fixed margin.
At most stores that sell a variety of product, anything you see right away is a paid placement. The first beer you see, Pepsi in the front of one store, Coke in the other. That’s why you don’t see canned corn on the end cap.
The notion that I should have the feels because poor Epic pays a 30% commission to Apple so they can sell my kid a virtual character dance move at 98% margin is absurd. The argument is specious.
If you care about the musicians you should probably be using Tidal and not Spotify.
Spotify don't give much to musicians compared to other platforms. They are keen on putting hundreds of millions into podcasts though, which is why I left them. Joe Rogan's objectionable behaviour aside - I just don't give a shit about podcasts, so I feel like my sub money would be going to the wrong people.
So by choosing the expensive way of paying, you will eventually endup paying more.
There is no shortage of ways companies can do that: "oh you want this new content, too bad it's for our premium gold users only", "ohh you want improved audio quality, here is upsell", "ohh, traveling a lot lately? Maybe we will limit the amount of offline content you can keep, but not in the premium diamond plan", etc
Careful there. Someone might pipe up and say this is what cryptocurrency was designed to resolve.
Since we are heading to a world with no cash, what's stopping the card companies from doing that after there's no way back? This is why I use cash as much as possible - to delay that day.
I'm in :)
Because chances are the 30% fee will be simply passed on to the customer. I don't know if that's true in this case but this is a very common practice even with big greedy corporations that could definitely afford eating the fee (except many of them have just completely removed in-app subscriptions on Android and iOS already).
This is exactly why it's great to have a choice: if you're fine with paying a 30% fee on every single subscription for the peace of mind Google provides (protecting your payment details, easy cancellation, etc.) then that's your choice. But if you would rather cut costs and you trust the developer or are willing to risk it (generally banks will protect you from fraud anyway), you have the choice of direct payment.
I was a monthly donator to a public radio show. After few years I wanted to switch credit cards (with no intention of canceling or changing my donation amount). They had redesigned their website and there was no discernible way to cancel or contact them. I blindly emailed them, but never got a response. My only recourse was to cancel the credit card.
Since then I've greatly preferred a third-party to manage subscriptions. For awhile it was Paypal. In the past decade it's been Patreon and Apple.
[1] https://leginfo.legislature.ca.gov/faces/codes_displayText.x...
While subscription cancellations work similarly, Apple holds your hand (from a dev perspective) than Google does. Apple's overall approach seems to just make sense. For instance: if you stop offering a particular plan because you don't want to offer it anymore (e.g. no more yearly plans, only monthly and quarterly). With Apple, you get a notification that you need to change your plan, but if the change happens w/in 7 days of your renewal, you'll be grand-fathered in.
With Google... well... you cannot stop offering it. You have to communicate (manually) a cutoff date, (via their API) cancel people's subscriptions, and then deal with the fallout.
One big benefit I didn't mention, is any yearly membership I get a communication from Apple that it is about to renew. Reminding me to cancel if I no longer want to use it.
I don't know of a single service I have subscribed too directly that does this.
Edit: I remembered one. FFXIV oddly enough reminds me every month that they are about to bill.
But what's happening is the exact opposite, Spotify has been using their own payment processing on Android so far and are now planning to add Google payments.
On iOS you do not have that choice with many apps because they (fairly) do not wish to fork over 30% of revenue.
So if this was introduced to iOS, the choice would be "Sign up for Netflix in the app" or "Not at all". You just do not have the option to use centralized billing on iOS with Netflix. "You download the app and it doesn’t work".
Steve wouldn't be happy about this.
Edit: though it's not clear if Google would even allow that in this case.
It looks like on iOS Spotify is $13 a month vs $10 a month on their website. I don't see anywhere https://play.google.com/store/apps/details?id=com.spotify.mu... that specifies in app purchases but I assume it is the same.
They also let you cancel by phone, if you speak French.
They have quite a nice online portal area where I can login and make changes to my plan. But they don't let me cancel there on purpose. It's a dark pattern and I'll never use their service again as a result. Which is too bad, because I was quite satisfied with it otherwise.
As a user I might go with Spotify exactly for that reason.
My Google account is personal and already attached to a lot of services, while the Spotify one is dedicated and shared. I’d hate to go hunt for the right Google account that has the subscription.
Also, Apple subscriptions have several issues like the service provider can’t cancel your subscription. Given that Apple will not let you cancel the current running month, even if the provider agrees with your case, it leads to fucked up situations that only emerge because there’s a middleman.
I got upsold into their 6 month package. You were supposed to get 5 super likes per day (which shows your profile to someone and tells them you like them; otherwise, you wait to maybe sometime show up in their feed and hope they pay attention). After I paid, they changed it to 5 per MONTH. It effectively made my subscription worthless, but unless I go through the hassle of contesting it on my CC, I have no recourse.
Some people would rather use single use virtual credut card numbers than rely on google to let them cancel when and how they want.
I don't understand why I would need to go through anyone else for this than my bank(s) ?
But I would be surprised if we ever actually saw that data.
But so I was curious, I have $762 worth of subscriptions a year through Apple. So I could save $228.60 if they were all 30% less.
To me that is worth it. But I would also like to point out, that many of the apps I am subscribed too. I am only subscribed too because it was easy through Apple and I knew that I could cancel. I have a number of expired ones that I used for 6 months or a year but I didn't need anymore. A few that I have right now fit this but I am still actively using them.
If it wasn't for this central subscription, they would have never gotten my money to begin with.
To me it sounds like a huge upgrade. But admittedly I might be in the minority in that the only reason i use android is because I think iOS is even worse in having to deal with the platform owners bullshit.
The issues with cancelling things seems like a very american centric problem. I don't know, I literally never had an issue canceling a subscription yet.
And hopefully this is a step in the direction where the user has the choice to pay a 30% premium, instead of being forced to. For example I'd be very happy to pay valve 30% more to not have to deal with EGS. I'd be even more happy to pay anyone 30% less to not have to deal with Google.
Billing through Spotify might make it harder to unsubscribe, but I can still block my card. Rather not need to fight a large company with a history of ignoring its users or their complaints to get my payment canceled.
Privacy
Because I don't even have Google in my phone?
(No idea whether Spotify will support that, but if they wanted they could.)
Paypal
As long as it is a choice for the developer, it doesn't fix the issue. The only reason Apple (and I assume Google) are able to make it this easy is because the app developers are forced to allow it.
But if they are no longer forced, why would an app developer choose make it easy to cancel?
But yeah, this burden shouldn't be offloaded to users to make sure they're using a different centralized service to actually cancel subscriptions.
It's so absolutely bizarre to announce something at this stage. I wonder what is prompting it.
I use Apple Pay whenever possible for this precise reason. I don't want to trust Target with my CC info.
Of course since under this scheme the company I'd be sharing my card info with is the largest dossier assembling company in the world, so I wouldn't be comfortable with it. But presumably they will collect the info anyway (even though they aren't subject to the same regulation as the credit bureaux or credit card networks), so perhaps going directly through them doesn't make things worse and at least eliminates one risk (spotify themselves).
When it comes to personal data, CC info is always the least of my worries. Fraudulent card transactions are my bank's problem, not mine.
Capital One offers them for free.
What is the opportunity here? For consumers is it that you can pick who you pay? That doesn't sound like much of an opportunity to me.
What is the opportunity for developers?
I cant figure out why Google would want this otherwise?
For services which exist and function perfectly well outside of the Google/Apple binary, why should they get any more than a nominal fee for hosting the app download?
When apple gets control over the transaction, they can take whatever cut they want
I think of this as a developer issue. There's good money being the middle man for transactions. Did consumers really care about the Epic/Apple IAP issue? Were there iOS users clamoring to use Epic's payment platform? I never really heard the consumer voice in that discussion. I did hear a lot of developer voices that cared about their right to charge consumers without Apple's 30% transaction cut.
it's also an agreement, so it's very likely that they are requiring price parity.
in that case the only benefit of picking a different payment processor for end users would be for they joy of typing their billing information again.
regardless, looks like a step in the right direction
The Payment Request API existed in browsers for years (always saw it in settings but never in actual use other than Google Pay/Apple Pay), what about something like that? If you install the PayPal app, it can export a "payment receiver" control that apps can call. Your carrier could then implement that too, bank app, credit card company app, etc.
But I'd also like legislation to force apps that I subscribed to,or paid through to allow me to unsubscribe with a single click.
This is a big deal because both Apple and Google have been fighting to keep that 30% cut for years, despite the fact that neither company is really providing much value as a payments provider; they're just extracting rent from their monopoly position as the distributor for apps in iPhone/Android land.
Is this a compromise that gives google some in-app purchases that used to go to spotify, or is it the opposite?
And I wonder if it means some kind of data sharing with google? One whiff of google involvement in the actual experience or data use would be the end of my spotify subscription. If it's just a settlement about app store rules then I don't care.
It’s an alternate way to pay for API, sdk, and platform access.
Before the era of phones, if you wanted to develop for some kind of gated platform, for example video game consoles, one would have to pay very high SDK fees. Fees that would scale based on licensed seat, enterprise size, and more. Then when you ship, you’d pay royalties on a per item basis. You sold a game cartridge or cd? Great, a portion of your sale prices goes back to Sony/Nintendo/whatever.
If Apple and google were to provide un-marked up card services, they’d probably charge 3-5% like stripe: there’s a certain amount of fraud that would be priced in.
Then they would charge for dev tools. A lot. They’d probably charge for API or SDK usage, perhaps tied to the sales volume and enterprise size.
But instead they give the tools away for free, and charge at point of delivery.
I think the current situation is actually a great deal for developers: you get access to an always improving platform, it’s free for personal/hobby use, and if you make sales, you get paid. And the first $X is fee reduced/free. And it’s a highly available distribution platform that scales world wide. Good luck getting your Indy game into every brick and mortar store.
The world is really different, and way way better, for developers. This Spotify announcement is great for users, it’s handy to have all your subscriptions in one platform. And not having to sign up on a desktop or outside the app flow.
How is a phone not just a general computing device? How is a phone not just a laptop in a different form factor? Because Apple/Google say so?
There would be massive pushback if developers had to pay $100/y and 30% of revenue to develop an app for macOS, or Windows. But for iOS and Android we just accept it as true.
I don't know, I just feel like phones are a lot closer to laptops than they are to video game consoles. I don't feel like them being gated is justified, or good for anyone other than Apple/Google.
Then again, partnering with only the big names will create a new wave of complaints.
I would consider it a much bigger event if Costco announced they'd take American Express.
(No judgment against anyone who finds this event fascinating! You all clearly know more than me...)
It seems odd not to include this information.
I downloaded Spotify on to my android phone, it takes my payment and it works.
For a tech non-Silibro, what does this blog post mean?
Instead of building something and then cancelling it later when it doesn't gain traction to get their PR win, they decide to cash in on the PR win upfront with a big partnership announcement, then cancel the product before building it if it doesn't gain sufficient traction, thus saving on engineering costs and streamlining the typical Google technical offering lifecycle.
Behind the scenes, Google usually gives the partnering company some pretty nice discounts. Usually no one does any engineering until someone else sees the PR and also wants in on this "exciting new feature" and they're the one actually beta testing the product that they thought the announced companies already used.
This new effort is a response to regulation in markets around the world like South Korea [1] and the Netherlands [2]
[1] https://www.theverge.com/2021/11/4/22763040/google-in-app-pu....
[2] https://www.theverge.com/2021/12/24/22852966/apple-netherlan...
This is 100% a defense against antitrust investigations happening across the country.
It doesn't matter that users don't care, that they may never roll it out, or that it may never roll out beyond Spotify. Promises are free -- they can make as many promises as they want to try to blunt the inevitable litigation.
In return, they're getting one fewer enemy. I wouldn't be surprised if they try to pick up the other major developers antagonizing the app stores, like Match Group and Epic, using the same tactic.
Unfortunately, this shows even more dedication to the monopoly -- it's not dissimilar from dictators who allow their political opponents to live to make it seem like there's a democracy.
An opportunity to make unsubscribing a more engaging activity
Contrary to your suggestion, I would argue that most businesses do not want to predatorily extract money from unwilling customers. It's typically the old, calcified businesses that do not innovate (gyms, cable companies, etc.) that engage in this behavior.
I want more margin so I can hire more engineers and change the world faster.
Google probably sees regulatory pressure writing on the wall, and by doing this they're building evidence that they haven't built a mobile computing monopoly or are backing away from it (insofar as running executions on your customer's devices used to be free in the desktop computing world where two corporations didn't tax all of innovation).
Also, it's a shot against Apple, who is definitely the more egregious of the two.
This is all around good. There might be a company or two that abuse the system, but that's easily dealt with. In an open app ecosystem, you still have measures in place to correct the bad actors.
This is still a loss for devs, I was hoping we can just rip of Google garbage payment system and use something like Stripe, or whatever new companies that would've emerged to fill our needs.
Obviously they'll give a sweet deal to massive companies but not the small devs.
What issues do you have with the Google payments system? With the stripe bring that Google does not already have? (Outside the fee issue most people raise)
After a year or two there will be a PR announcement:
Congratulations to us! Today we're announcing going forward all plans will be priced exactly the same. This means whether you pay via Google or Spotify, you no longer need to worry about confusing pricing options because all plans will have one single price.
As an additional benefit users who pay via Spotify will get a limited edition Snoop Dogg / Jaden Smith / Billy Ray Cyrus NFT usable in Fortnite while logged into Spotify Pro Max
Normally how this type of stuff happens, is you'll have some internal team working on a new initiative and looking for headline customers, they will reach out to the sales teams, and say, "hey, you are working with XYZ customer, want to float this idea with them". It's a win-win.
So, having said all they. Google vs Apple, etc, and other large competition politics almost never are on the radar of these teams. They just want to help the customer win, get the sales commissions, and make their internal product successful. It's easy to look at this stuff from the outside and think there is some big plan but the motivation down at the teams level has nothing to do with that since they want mostly to look good on perf reviews.
I have no knowledge of the internals here just talking from experience from what I've seen.
[0] https://www.cnbc.com/2018/03/20/spotify-will-spend-nearly-45...
[1] https://www.protocol.com/enterprise/spotify-google-cloud-pla...
[2] https://cloud.google.com/customers/spotify
Note: I originally had Shopify here. The same strategy/tactics apply.
This is probably just a good show of faith to regulators while Google still collects their percentage of subscription revenue from Spotify on the backend.
This is an advantage of Google vs Apple. Google has multiple business relationships with Spotify. An increase in advertising dollars, infrastructure spend on GCP, etc could all offset the lost revenue for Google here.
I suspect Google expects an incoming loss.
They'd all rather receive the money from happy customers enthusiastically paying because they love the service so much, but if the third option is no money they all know what their second choice would be.
I'd agree that I don't think it's a majority that are bad actors, but I'd say it's far more then one or two, and atleast enough to impact the decisions users are making. I'd prefer this kind of subscription management functionality was handled via bank accounts, but until that's possible I'll probably keep using the app stores
I find it difficult to agree with this – and I'm not just being scattergun cynical. I quite literally think that the vast majority of consumer-facing businesses work as hard as they can to juice more money out of their customers through obfuscation.
It's easy to argue that this is a benefit for developers, or open ecosystems, or just plain principles or whatever, because that's all almost certainly true. But it's also probably virtually certainly no better for users.
Doesn't matter. There are enough of them to cause headaches for many people on a regular basis.
The myth of the indie developer held down by Apple and Google is a trope thrown out there just like every supermarket brand evokes images of family farms.
What % of payments come through payment card companies vs. cash/crypto/checks/etc. ?
Never ever in all these accusations do people mention The Big Four [1]. It's always Apple to blame. And Spotify. And Deezer. And Pandora. And...
Even though music distributors control all f the market, collect all the royalties, and pay artists peanuts. Does Spotify pay artists directly? No, it can't do that. It pays the license holders which are, in 99% of the cases [1]
[1] https://en.wikipedia.org/wiki/Music_industry#Consolidation
Edit: it's worse now, it's Big Three. They control 88.5% of the market, but by popularity of music that is listened to on streaming platforms, it's likely closer to 100%.
It can be that Apple, Spotify, and Google can all be screwing over creators in conjunction with their publishers.
That said, not all musicians on Spotify go through publishers.
It works on the web but it is still a hassle to use on mobile. I imagine Apple can potentially do this using Apple Card, but I don't think this is going to happen any time soon.
As an example, Apple's profit margin on the App Store was about 80% in 2019[1].
[1] https://www.bloomberg.com/news/articles/2021-05-01/apple-s-a...
That was the thing though, a business could decline to accept particular cards or cards at all and still perform transactions. That "opportunity" has generally not extended to the app store world in a practical way. If you want to play, they had their cut and customers and vendors didn't have a whole lot of say in what was reasonable. There is no simple default transaction (like cash) that they were trying to out compete.
Source: Involved in multiple such deals over the years.
In the EU it’s legally capped at 0.3% for all transactions (0.2 for debit cards).
I still think there are way more good companies than bad ones when it comes to cancelling and I do value building a relationship with the companies I patronize.
It is worrying to give so much power to a 3rd party, in this case google, who is notoriously difficult to deal with when an issue arises.
They could have a standing charge for each app, with charges per thousand downloads, for instance, which would more closely follow their actual costs, and charge 5% for payments. That would have a different set of positives and negatives, but the way they've chosen is just one way amongst many options they've got.
This does not solve the problem of users needing to provide their CC info to additional payment providers, but it at least solves the problem of dark patterns being used to keep users from unsubscribing.
I don't really see that going over too well, and a court case being brought up about control or whatever.
I mean I agree, that would be a fantastic rule and if it was enforced and allowed. Then sure, that fixes at least the dark pattern cancelation issue.
The issue is access of payment providers to the wallet. There's no real reason why there couldn't be a "MyTelco card" in your wallet that supports EMV processing rails.
If they’d have been smart they’d have done it the apple way instead and made the customer experience great but scoop cream off every financial transaction on their network.
More like "If I subscribe to Stadia via Verizon, they can charge me more for the Gamer experience 5G bundle plan"
Disney+, Budget app, weight management, couple yearly apps. Not that hard to get to that point I don't think.
Neither company is going to say “oh, you’re using another payment processor? Ok, our cut is now 0.”
Much more likely the argument will be “oh, you’re using another payment processor? That’s fine, industry standard payment processing fee is 3 percent, our cut will be correspondingly 27%”
IMO the main problem is the lack of competition. If Apple were forced to accept other payment platforms, you'd soon find the same service for cheaper.
But the only reason that this works the way it does, is because a developer has to use it. If there really was a third party offering that was just as easy to use sure, why not. But I just don't see companies willingly making it easy to cancel a service without trying to send the customer through some retention workflow.
Also, MC/Visa charge basically nothing for debit cards, and they do not take on any of the chargeback/default risk of credit cards, so I assume the rest of the fees are for the rewards for the most part. Which is why Discover/Amex fees are similar too.
A big thing discouraging me from using cash is how suspicious people are of you when you pay in cash. I've definitely gotten weird looks from cashiers when doing so, especially when you pay in larger bills (like $100).
Never went to CVS again, I assure you, but cash definitely has a stigma in some situations.
But with increased transaction prices, the only way I can think of is by legislation, but we know that legislation is typically reactive and not proactive. So if the CC companies go slow enough, it's like boiling a frog. And no, cryptocurrency isn't a solution to this as (the vast majority of) transactions aren't private nor anonymous.
I've yet to see any of these discussions to blame both. And your own comment literally never mentions the Big Three.
> can all be screwing over creators in conjunction with their publishers.
I prefer not to wade in to conspiracy territory. Apple may have power over the industry, but they are an outlier. The rest do whatever the industry tels them to.
Quote, [1]. Emphasis mine
--- start quote ---
Spotify primarily makes money for music from two sources — from Spotify Premium subscribers as well as from advertisers on Spotify’s free tier. Roughly ⅔ of this money is paid out to music rights holders.
--- end quote ---
Guess who are the rights holders. They get 60-65% percent of Spotify's revenue (not profit). Care to ask them where this money goes? No one ever dares to.
> That said, not all musicians on Spotify go through publishers.
It's either publishers or indie aggregators (two or three of them). Spotify doesn't pay artists directly. If it tried to do that, the big publishers would immediately pull their catalogs. And the vast majority of popular music on the platform is likely to come from big publishers, not from indie aggregators.
[1] https://loudandclear.byspotify.com/?question=how-do-artists-...
Perhaps because they are outside the context of this discussion? For the purposes of this discussion, they are a constant, no matter what Spotify or Google does.
> And your own comment literally never mentions the Big Three.
I added a caveat to my "buying from the musicians directly" exactly because of publishers.
> Apple may have power over the industry, but they are an outlier.
Not exactly - they charge the same percentage as the other players in this space that I mentioned. No conspiracy theories required to point this out.
> Care to ask them where this money goes? No one ever dares to.
Sure, in articles about music producers (I recall more than a few hitting HN over the years, especially when Taylor Swift was raising a ruckus about them and Spotify).
> And the vast majority of popular music on the platform is likely to come from big publishers, not from indie aggregators.
I don't believe anybody is disputing that.
That "constant" is the main reason artists don't get paid. And yet, only streaming services are blamed.
> added a caveat to my "buying from the musicians directly" exactly because of publishers
That's not a caveat. That is wishful thinking. How do you propose streaming services do that?
> they charge the same percentage as the other players in this space that I mentioned. No conspiracy theories required to point this out
Yes, they do charge the same. So it means that 60-65% of their revenue goes to rights holders.
But sure. "They are in on it with rights holders to rip artists off".
> Sure, in articles about music producers
There are very few such articles and most, like your comment, blame streaming services for paying artists too little even though streaming services have nothing to do with paying artists. It's the publishers/rights holders who do that.
The ad-supported users outnumbers premium users (236 million to 180 million) but bring in only 1/6th the revenue. So that's a factor depressing the payout per stream.
https://investors.spotify.com/financials/press-release-detai...
I think Spotify is an excellent example of labels using a 3rd party to mislead where they money is really going when Spotify is paying nearly 80% of its income as fees to 3rd parties.
Maybe Spotify should offer a discount.
Anyways, this is a bit like looking at Walmart's COGS and declaring that they've never screwed over a supplier by forcing them to cut prices to the bone.
Current:
totalMoney x (totalListenTimeForArtist/totalListenTime)
PerUserMoney x (PerUserListenTimeForArtist/TotalUserListenTime)
He got popular on YouTube BTW.
"It's much easier not to switch" is just a peculiar way to spell "I don't care enough to switch" in this case.
If someone doesn't care enough to do something as easy as switch music streaming services, do they actually care?
They have a license to play music, and they pay for the songs at a rate that the labels charge for. If artists do not get enough money from streaming then their label should negotiate more from Spotify. If they are already taking 80% of Spotifys income then that means that either they aren't charging Spotify enough, and Spotify should charge users more, or they are taking a larger chunk and deflecting blame.
With them using the RIAA for the longest time as a distraction from it actually being Sony et al that was suing it's customers, I would not be surprised if this is misguided blame again.
But again, if artists do not get enough money from streaming music, then that is not Spotifys fault. It has paid for a product that it is reselling. You don't then get to bitch that you sold someone something for below the cost that you wanted to.
Also, there's far worse people than Joe Rogan who make a full living off YouTube, so yeah just completely ideologically inconsistent if someone is going to reject Spotify because of Rogan and still use YouTube.
It seems that there is some kind of disparity between how Joe Rogan is being portrayed.
But if you need another example, I'd love to see a single person who stops Rogans randomly inserted anti-trans rants he manages to somehow have on every episode, even if it is not topical. Aside from the fact he had a lot of "anti trans" people on (Debora Soh, Abigail Shrier, Jordan Peterson, Blair White... I mean the list is essentially endless) and not one person who is invited because they're pro trans.
At this point I'm really curious who makes most of the booking decisions for the show. They seem to maximize for right-leaning outrage culture / reactionaries, comedians and some people with very milquetoast politics. I can only remember Bernie as a big left voice on the JRE.
Steam isn't a monopoly like Apple and Google are with their respective marketplaces so it doesn't make sense to compare the two. If I want to publish or play a game there are a lot of different ways to do so that don't involve Steam.
Why should software get a free pass?
The only viable path towards finding a fair price for this service (apparently deemed essential and basically a steal by Apple and Google, but worth less than nothing by many app developers) would seem to be competition.
Why not offer both, explicitly allowing for different prices, special deals only for non-store subscriptions etc.?
In Australia, the Reserve Bank regulates interchange fees and requires the end user to be made aware of card processing fees which can't exceed a percentage/value of the transaction.
Similar regulation applies in the EU.
There's no reason why Google/Apple/etc stores can't be similarly regulated.
Of course it would also be possible to do both, i.e. to mandate either a fixed rate or alternatively allowing out-of-band payments.
Though there is fair-use policy that Steam users shouldn't be given worse deal. E.g you're not allowed to only run 30%-off discount exclusively on your store without offering same discount for Steam store users sometime later.
This isn't an Apple/Google/Spotify thing, it's a service thing.
An app store costs money too - the creation and maintenance of the billing platform/API, bandwidth, human curation, cross-device storage of saved configurations, user acquisition, etc.
What makes musicians so different from software developers that it's perfectly acceptable for Spotify to take such a large share of the revenue their music has earned?
(To make my own position clear, I don't think any of them deserve 30%)
If 30% is too much, publish your content as a web app. If you want to play in the walled garden, pay the cover charge.
What’s the difference?
I dont think that is the correct way of looking at it. As you stated at the end, you think it is worth it.
The question is value delivery. Not percentage. I could argue in cases where even 90% is acceptable. The question is how much value is delivered and how much of those 90% are used, or was it pure profits, i.e rent seeking. For some categories of Apps, 30% doesn't make sense.
A noble position but it seems to have been going other way unfortunately. Not sure how you would do that … further regulation or introducing artificial competition in the market. I think the most pro-business approach is to quash the monopoly and open up the market.
Likewise would you be equally OK if the dollar figures involved were much larger for example your cable subscription?
You do. I certainly don’t. And you’re just doing that because it’s the status quo, not out of any analysis.
Yes to 0% and any percentage of revenue should be made illegal. Google and Apple can charge whatever fixed values they want or even charge based on a wide variety of vectors but a % of revenue should be explicitly illegal that kind of blatant rent seeking is a quintessential example of something the government needs to stamp out.
To be clear, 30% is too much, but aside from payment handling and taking on fraud risk as a result of that (3-4% is generally the industry standard for card not present transactions), they provide a subscription management/payment API for IAPs, as well as app packaging and distribution, reviews, etc.
That certainly is worth more than 0%.
There is a definite cost to all these so 0% is unreasonable. Epic is trying to be the "good" games distribution store and they reportedly take a 12% cut. Something around there, maybe down to 10% would be a reasonable place for Apple/Google to be.
I think we can legitimately talk about the costs of maintaining the app-store as a marketplace, and we can talk about the future costs of providing updates free of charge in perpetuity and orchestrating the infrastructure to host those various downloads... but that's about where their service offering ends. App review is a joke, the rating systems on both platforms as absolute trash and often gamed by publishers (remember Uber's in app prompt about how many stars you'd give them that forwarded you to the app-store if you gave them 5 and otherwise just offered you an internal complaint form if you gave them anything else? Everyone does that).
I'd question whether Apple and Google are really providing a service or just exploiting a captive market.
30% is between 10 and 20 times a reasonable fee.
For example, a smalltime dev isn't going to see hardly any refunds, but a dev on the scale of Epic Games is going to be seeing something on the order of tens or hundreds per minute. Should that not be accounted for?
That said, this could be accomplished with tiered fixed fees. An indie dev would probably land in a low rung where costs are tiny, where a triple-A game studio would get charged substantially more.
The revenue from paid services covers that support.
Would I prefer the cut was lower, but at the same time the 15% (for most)-30% cut seems to match every other platform
The only "pull factor" Spotify has is the userbase, which is arguably fair. For Google, though, the "pull factor" is because you literally cannot sell directly to users through the Play Store.
One could argue (on Android) that it's possible that you can install third-party markets, and that's true, but there's also pretty big roadblocks to installing, whereas selling on another music platform is much easier in comparison. (Don't believe me? Send your father an APK file and ask him to install it. Let alone iOS where this is not possible at all..
Couldn't you replace "Google" and "Play Store" with "Spotify"?
You can "sell" your app directly to users through your own site (see Fortnite) or dubious sites like https://en.uptodown.com/android/general-android but you have the same "pull factor" with the Play Store that you do with Spotify (the user base).
The Google + Play Store and Spotify (company) + Spotify (platforms) situations don't seem fundamentally different to me, just different by degrees. Google's monopoly on Android app distribution is unparalleled.
Spotify is just a convenience service in the end. They could sell their music through their own app, site, Magnatune, etc.
Even Google Play is iffy, as developers could distribute through 3rd party app stores or sideloading, though Google makes that harder than it should be.
Apple is really the only one of the 3 you mentioned that forces a 15/30% cut if developers want to distribute an app on their platform.
Isn't this the definition of a monopoly?
A company that is not easy to undercut could just be an efficient business that operates roughly at cost without excessive margins.
This classic article by Steve Albini captures what monetizing music was like for artists before the Internet: https://thebaffler.com/salvos/the-problem-with-music
That said, many artists have objected to subscription models like Spotify’s (Taylor Swift notably), or a la carte like Apple’s (Pink Floyd and Beatles’ estates notably). Most paid Internet music services have been a mixed bag of inconsistent payouts and artistic control. Spotify is definitely among them, even if it might be more attractive than a Record Deal^tm.
In my experience and inferred from experiences of other artists, SoundCloud has the best exposure benefits for lesser known artists combined with the most freedom to monetize, and Bandcamp is the most straightforward self publishing platform for built in monetization.
Comparatively, Spotify is basically, like Apple, filling the void of the record labels they usurped. While their terms are comparably “fair”, it’s easy to understand why they’re not ideal for a lot of artists.
So, you don't use YouTube at all?
What video streaming sites do you use as an alternative? Or do you just not consume online video that isn't behind a strict publisher?
My understanding of the YouTube-alternatives is that they tend to be more anti-censorship, so they're likely to host even more "worse" content then Joe Rogan vs. YouTube.
If at all possible! I used to, but mostly either for streaming music (it was a convenient way to play full albums instead of finding CDs I never got around to ripping). I stopped doing that when the recommendation algorithm started trying to show me shit like Alex Jones after I listened to a Pink Floyd album or whatever.
> What video streaming sites do you use as an alternative? Or do you just not consume online video that isn't behind a strict publisher?
I mostly don’t consume a lot of video content at all. Even at times when I have it’s been mostly listening while doing other things. When I do now it’s almost entirely Netflix, and probably half the time I’m just listening while snuggling my pup.
FWIW I don’t think Netflix is any kind of a morally better alternative, either. My distaste for both Spotify for audio and YouTube for video is the same: I don’t like to consume lots of small bursts of information, especially with a lot of context switching and interaction, especially with a lot of sensory input. And I don’t like to pay extra to turn off shuffle.
As far as the moral aspect of content on these platforms, I mostly think they’re all garbage or waiting to be. And yep, consuming the ones I do does make me a hypocrite. But I appreciate the opportunity to put that fact in evidence.
You can try to find alternatives for an app store, but that doesn't change the fact that inherently within Android, there are certain roadblocks that simply don't exist for a Spotify competitor, for example.
Monopoly doesn't apply, does it?
Even DAB/FM radio takes their lunch.
Absolutely not, the bank initiates a chargeback, which the payment processing network directs back to the one who handled the payments. They generally are then tasked with "proving" the purchase is authorized. Enough chargebacks, even fraudulent ones, and the payment provider cuts ties with you (although, at Google scale, I don't see this happening) as you're too great a risk.
> App review is a joke, the rating systems on both platforms as absolute trash and often gamed by publishers (remember Uber's in app prompt about how many stars you'd give them that forwarded you to the app-store if you gave them 5 and otherwise just offered you an internal complaint form if you gave them anything else? Everyone does that).
The implementation being a joke doesn't mean it's not a service with COGS that need to be accounted for.
No – for online/e-commerce payments, the liability is generally with the merchant, not the card issuing bank.
If it was about risk/fraud, debit cards would be an economic non-starter, as their interchange is capped to 0.05% + 0.24$ for almost all issuers.
EU issuers also get by (probably not too comfortably so, but still) with the recently introduced interchange cap of 0.3%/0.2%.
On top of that there's a hefty fee for any fraud or chargeback that's not refundable even if it's resolved in your favor. Usually in the range of $40 per instance.
1. https://www.pcgamer.com/epic-has-sunk-dollar500m-into-the-ep...
Of course they can, but we can acknowledge it's a moving target. I'm at least confident it will be better than Steam.
> loses immense amounts of money
This is the same for any growth business/product where you front-load marketing and business development costs, and is not an indicator of future trends.
Why not internet provider? Verizon's infrastructure costs money, too - should they also be eligible for a 30% tax?
The data will be transmitted through Cisco routers or Nokia's BTS - it costs a lot of R&D to develop those
What about the phone manufacturer - Xiaomi or Samsung would definitely not reject their fair share
None of this would happen without electricity - power transmission companies deserve a portion
There really isn't a coherent moral argument in favor of the current status quo - it's simply about market power, nothing else
Had Verizon singlehandedly created the internet and had no real competitors they might have been able to tax it’s usage. Thank God that did not happen, though…
Since HN is a lot more familiar with the cuts the stores take out of developers earnings, it makes for a nice point of comparison.
> The data will be transmitted through Cisco routers or Nokia's BTS - it costs a lot of R&D to develop those
This is a novel idea. Verizon and Cisco could charge a price above their cost. They could call this a "profit margin". You might be on to something here.
Access to listener, or even if you limit to Mobile listener, are not bound to Spotify.
On the other hand if you want to write an app for a mobile device you're, realistically, either going to write it for Android or iOS. On the Android side you can distribute it as an apk assuming you can handle the cost of writing self-updating code - but on the iOS side you're hooped. Mobile devices are a part of modern life, the fact that one company dominates the market (and another company takes the remainder) leaves the market extremely unhealthy.
Musicians have about the same freedom in this respect as any application developer, practically speaking. AKA, they're just as exploited (if not moreso, see other comments about how musicians are also being screwed over by studios).
With Spotify, however, musicians can't choose how much their music is worth, and the payment of royalties is also not exactly transparent.
These companies created something that grew into a foundational element of modern life in about a decade. That’s amazing and should be awarded with trillions of dollars. The market should reward this corporate behaviour extremely well, and punish the IBMs and GEs and Boeings harshly.
As an aside, Apple et al are also not resting on their laurels, and keep pushing the envelope. My 2 y.o. + iPhone is literally better than on the day I bought it. I’m more than happy to pay more for apps / subs to get this.
Apple makes very popular computers in their iPhones, but other phones, tablets, laptops, gaming consoles, etc all do the same stuff.
Eg. When your phone is broken, you can still call people over your laptop, and you can access an internet browser from basically anything
Both firms leveraged their dominance in the mobile OS market to dominate the mobile app distribution market, and then they leveraged their dominance in the mobile app distribution market to dominate the mobile app payments market.
When talking about monopolies, the working definition is firms that have significant and durable market power such that they can set prices and exclude competitors[2]. Both Apple and Google fit that bill for the mobile OS, app distribution and payments markets. Whether you use the words monopoly, duopoly or cartel to describe them doesn't really matter, because all of those terms are accurate descriptors.
[1] https://www.businessofapps.com/data/app-revenues/
[2] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...