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.
I know that a consumptionist attitude is popular these days, but as a user of something like Spotify I would surely prefer as much as possible of my monetary contribution ending up with Spotify and the musicians instead of in the hands of a company controlling the market place.
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.
I don't think Spotify is the best example here, since I'm not particularly convinced that more cash going to them would end up in the hands of musicians.
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.
Spotify is public and you can see most of their numbers -- the Cost of Revenue for 2021 was 7 billion EUR on 9.6 in revenue. The cost is said to be mostly the royalties though it would include paying the many millions to some podcasters.
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.
The difference is the artificial limitation placed on Play Store listings and Apple App Store, versus the freedom of an artist to sell their music to any other platform (it's just that it would be far less successful).
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..
> For Google, though, the "pull factor" is because you literally cannot sell directly to users through the Play Store.
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 a service whereas GP is an application platform. You distribute apps (services like Spotify) through GP, whereas you distribute product (songs) through Spotify. GP is the only (reasonable) way to get apps on Android, whereas there are dozens of legal licensed alternatives for Spotify.
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.
There are plenty of different platforms besides Spotify which have comparable catalogs and are available on all/most platforms (even Apple Music has an Android app). Their subscription prices are almost the same so the market seems to be very competitive and nothing like the iOS App Store.
The contracts that the record labels offer to streaming platforms are (or were a decade ago when I was in the business) set up to strictly control the prices seen by end users but I'm sure their lawyers believe they can do this without running afoul of competition laws. Even if the effect is price fixing...
Steam doesn't belong there, as it's not the only avenue for developers to distribute games on PC.
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.
I disagree. Spotify is practically a monopoly and is a rent-seeking entity. The reason artists can't go somewhere else is not because Spotify efficiently operates at cost (their gross margin was 26.5% in Q4), but because it's the only brand most customers know.
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.
There is no proof that if Spotify gave the labels more money, that it would go to the artists.
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.
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.
It's probably not really possible to even estimate how much of actual cashflow is attributable to user income vs. artist payout from GAAP-based financial statements. And their cashflow statements are not particularly useful either. I'm sure a lot of nice things are "said to be," but if spotify were particularly proud of how much money they let through to artists I think they'd be touting it in more concrete ways.
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.
Let me tell you, as a musician and artist, the miniscule portion provided to the artists who supply the content is a travesty and a crime. This new partnership only serves to add more hands in the pie and squeeze out any hope of increases for the content creators. Every time you click on Spotify you are fueling the beast. I make more money selling one vinyl record at one live gig than I will make on Spotify for months. All of this is great news except for the little guys!!!
This might have changed, but generally, Spotify pays 70% of premium revenue to rights holders[1], i.e., it's a variable cost. Most won't end up in the hands of artists, but I'm not sure if any streaming or purchase platform is better for that.
which is odd because Rogan made most of his money from Youtube which is also Google, youtube was his biggest promotional tool. So I imagine you don't watch youtube either?
I'm not sure those are directly comparable. For YouTube you are not contributing to Joe Rogan unless you watch his videos and add views/popularity/ad revenue. Spotify, however, signed a separate contract that (AFAIK) is unrelated to listening count. In that sense any Spotify subscription has paid into the money Rogan gets, which isn't the same on YouTube.
He's still on YouTube btw, so still making money off the YouTube platform and gaining listeners/distribution from there.
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's funny. There where 101 articles when he had "anti-vax" people on. 0 articles when he had "pro-vax" people on. He can make 15 three hour episodes that none gives a fuck about, but then 1 episode that everybody loses their shit! :D
It seems that there is some kind of disparity between how Joe Rogan is being portrayed.
It's because him having a "pro vax" person on is incidental, whereas the "anti vax" person is invited because they're anti vax. And you shouldn't be platforming people who spew nothing but falsehoods.
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.
Some of us actually don’t use either of these products. I can’t speak for the person who got the whatabout, but I think it’s presumptuous to jump straight to hypocrisy without any information about other choices and how they might or might not be consistent.
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.
I would still rather that The Google not get one cent, considering the transaction otherwise didn't need them at all, and the benefit to their involvement is rather dubious considering that all of my subscriptions may one day be inaccessible because The Google decides my account thinks wrong and closes it with no recourse.
> 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?
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.
> 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.
As an example, Apple's profit margin on the App Store was about 80% in 2019[1].
Choice is the real thing though more than actual value add. I feel like I see it less now, but recall seeing how vendors would only accept certain cards and not others (frequently, not American Express) which was as far as I know stemming mostly from higher fees they didn't want to pay. Similarly, places would not accept credit cards at all if they had razor margins and didn't want to eat the fee. I still know of a few places like that, often with an ATM near by so the customer can pay a fee if they are caught unaware.
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.
Even your 2.9% number is probably too high. Perhaps for AmEx or in super-high-risk situations you need to pay that kind of fees, but for regular MC/VISA in developed countries, even a medium-sized business can get below 1%. Large companies, like Apple, can almost certainly get it lower than that.
Source: Involved in multiple such deals over the years.
The banks must be getting a piece of that because MC/Visa collect more depending on the rewards tier the card is in (Infinite/Signature/World and whatever other names they have).
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.
Can back this up. No one at that level of merchant processing is paying the rack rate of what you might see on Stripe. It's usually high 1's, or low 2's.
Then let's focus on lowering that percent instead of making the situation worse for consumers.
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).
If we want to make the situation better for customers then companies like Apple and Google should provide subscription management/payment API for IAPs for free to developers so developers are incentivized to use the centralized platform. Customers can manage and cancel payments through that centralized platform. The only reason developers come up with these roundabout methods for payment is because of the massive fees that Google and Apple have.
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.
Well even with all the available competition most developers seem to consider the 30% fee on Steam fair enough to host their games there. So maybe that 15/30% is not as ‘massive’ as one might think, especially considering that the app store model was massive improvement over what existed before them. Not that I’m a huge fan of closed ecosystems in general, but I’m not sure the government should dictate what sort of software features manufacturers should implement on their devices. Especially considering that most consumers don’t really value the ability to freely install any software they want on their devices and seem to be fine with the closed garden approach.
Governments regulate all sorts of features on all sorts of products: building codes, electrical codes, car mpg requirements, how planes work, tax requirements, how corporations are allowed to function, the rights of citizens, ...
> Then let's focus on lowering that percent instead of making the situation worse for consumers.
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.
Steam lets developers sell keys without the tax using their own systems. In addition to this you are allowed to list your games on other storefronts for PC.
As already already been said there is no revenue sharing.
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.
AFAIK they do it without revenue sharing because it keeps customers using steam (running their client, seeing their ads, viewing their store, and being tied to the steam ecosystem). They don't need to turn a profit on the tiny, irrelevant volume of off-site sales.
I don't understand this argument. Spotify is a service connecting listeners to the artists and infrastructure and development of said service has its cost whereas Google/Apple charge fees for the app store which Spotify subscription does not require.
So, Spotify is allowed to charge 30% for access to the market it has created, but Google and Apple are not?
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%)
Because Apple and a Google created a market where there was none. It basically impossible to make money from selling mobile apps to consumers before them.
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…
I am fine with them charging whatever they want, as long as they don't prevent competitors from opening alternative markets. The problem is the monopoly, not the price.
Spotify has very low margins so it's hard to say 30% isn't fair. Any lower they'd have trouble paying their costs. Streaming in general helped the music industry revenue grow. You can say Spotify might be bad at business for not making much money on a 30% cut, but overall they seem to be serving decent value for money to the copyright holders and customers. Before streaming, the overhead was a lot higher, with the retail distribution chain taking a comparable cut.
> 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
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.
Apple/Google app stores are a service connecting users to app creators, and all the points about Spotify also apply to Apple and Google. In the case of Apple, they literally created the entire market, from the CPUs all the way up.
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.
I think the biggest difference is that Spotify isn't a monopoly at the end of the day - it's a popular service. A lot of people still use different methods to listen to music like YouTube, iTunes, bandcamp and a plethora of others. If you, as a band, want to make money on your music you aren't required to do business through spotify, it's a choice that most people make because it's free money.
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.
Google Play, which charges 30%, is not a monopoly either. Nor is Steam. The Microsoft/Sony/Nintendo scene is a bit less clear, but they charge 30% too.
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).
Yep. One major difference is that with Google/Apple (and also Steam I believe), app makers can at least choose the price of their apps and services themselves, and they know how many units they sell. If Google/Apple are charging you 30%, just increase your price.
With Spotify, however, musicians can't choose how much their music is worth, and the payment of royalties is also not exactly transparent.
But the very concept of being an mobile app developer was brought to life by Apple, and later Google. 15 years ago, you could not really be a pro app dev. Now, you can, but with a 30% cut. You are strictly better off. And if you think the 30% is too much, do something else.
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.
The developer who made a useful website with a link to their paypal has been mostly obsoleted by app developers. Small tool development isn't a novel creation of modern mobile devices - it's just the packaging of these into bespoke binaries that have highly regulated distribution channels. A cynical person might assume that part of the reason Apple hated flash so much is that it threatened to stunt the upcoming app market. To lend some credence to this position, things like Kofi have taken off in recent (on my scale) years as HTML5 gained enough traction to essentially duplicate the functionality of flash without any of the security issues - I personally think this is what led to the feature to save websites as apps on iOS and that is something that doesn't threaten Apple much with their network advantage, but has the potential to cut into their revenue if it gets popular enough.
The problem is when that innovative company becomes the new IBM/GE/Oracle and starts treating every client as nothing else but a revenue stream instead of focusing on creating new and innovative products. I don’t think Apple/Google are there yet but they are clearly moving into that direction.
Apple and Google are responsible for 99% of all mobile software distribution[1]. They both monopolize the mobile app distribution market, as well as the mobile app payment markets.
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.
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.
Going the other way? The fee started at 30% and has only gone down from there (ex. 15% for subs active > 1 yr). I believe the fees will fragment further and give developers the option of paying less but receiving less too. For example: You can pay 5% less but you will only show up in app store search results. Or something to this effect. We will never get blanket 30% take rates again. It was a simplification when the market was early
You can only lower the percent with at least the credible threat of competition. Would you pay $13 for a $10 service for the privilege of doing it through the play store?
Likewise would you be equally OK if the dollar figures involved were much larger for example your cable subscription?
> than sure the percent needs to be lowered and I am not arguing that
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.
Apple and Google are providing a service, so why exactly should they not get a cut of revenue?
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.
Apple and Google (and others) also allow loading credit using physical cards that you purchase at retail stores. I believe the stores get around a 5-10% margin on these, i.e. you buy a $100 gift card, and the store only pays Apple/Google $90-95.
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.
Unfortunately Epic can't honestly comment on what cut they're taking while their storefront loses immense amounts of money[1] - I agree that a lower percentage is probably a lot more reasonable but I don't think EGS can serve as that example.
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.
I'm pretty sure it loses money because of all the giveaways and coupons they pay for, so you'd have to take those out of the picture before doing the math for a proper comparison.
I know that Silicon Valley is a hell of a drug but starting a business by burning two hundred million dollars a year that you haven't yet earned is not how nearly anything works. It only works for tech startups and it's bizarre since tech doesn't actually cost that much money.
Isn't the fraud risk still generally born by credit card companies at the end of the day?
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.
> Isn't the fraud risk still generally born by credit card companies at the end of the day?
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.
Nope. All fraud and chargebacks go back to the merchant/seller. The processor will immediately hold those funds in question pending a dispute or resolution around the fraud or chargeback.
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.
No, industry standard for online credit card transactions is 1-1.5% in the EU and 2.5-3% in the US. Even back in 2008 before 3d secure was common and before the EU regilations we as a tiny online casino had 2.5% fees.
Doesn't this ignore the reality that a service with many of subscribers puts dramatically more strain on marketplace systems than a service with only a few subscribers?
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.
Apple provides software updates for devices for years after they been paid for. Apple and google both providedthe CDN bandwidth for incredibly popular “free” software for which they do not receive a penny.
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
Absolutely. I want 100% of the money to go to Spotify and I want a centralized one-click cancel, that looks the same for all subscriptions.
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'd rather 100% of the money go to the artists, personally. It is possible in many cases, but not with Spotify (or Google, Apple, etc). Middlemen want their cut, and Spotify cuts as deeply as Apple (google, steam, microsoft, sony, etc) does.
> I'd rather 100% of the money go to the artists, personally. It is possible in many cases, but not with Spotify (or Google, Apple, etc). Middlemen want their cut, and Spotify cuts as deeply
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]
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%.
> This is where I shrug my shoulders and say "Why not [blame] both?"
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.
> I've yet to see any of these discussions to blame both.
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.
> For the purposes of this discussion, they are a constant, no matter what Spotify or Google does.
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.
I think https://privacy.com is close to that. You get a virtual credit card number for every single service that you sign up for, and you can simply disable them in a centralized place.
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.
I think the norm that everyone seems to slowly be settling on, of 15% for: 1) hosting the program itself, 2) displaying in the store, 3) payments and subscriptions including figuring out local taxes and CC fees and such, 4) various other services (push messages, for example), is pretty damn reasonable. 30% is clearly too high, but somewhere around 20% it actually starts to look like not-a-rip-off.
> Imagine a world with no cash. Now the payment card companies decide they want 30% of all transactions. You think that would be reasonable?
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.
> Now the payment card companies decide they want 30% of all transactions
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?
It sounded like you were saying those platforms were justified in taking a 10× higher cut than payment companies because they provide services that developers would make fewer sales without and would have much more difficulty implementing and hosting themselves. But what makes payment companies not platforms? They seem similarly difficult to sell without, similarly difficult to reimplemement and host yourself, and just as valuable as store platforms for the same reasons you gave.
I think you’re mistaken - why would Google have agreed to this if they gave up their cut of the subscription revenue? They’re surely making some money on the backed still, possibly just 3% less than they were (to account for Spotify’s processor fees).
> 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?
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.
It may surprise you that just under 70% of app revenue is games.
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.
Tidal et al. only seem to pay more to artists because they have lower engagement than Spotify. So the same monthly pot is just divided between fewer artists. It's a misleading metric.
> my monetary contribution ending up with Spotify and the musicians
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.
If payment processing costs 30%, you are expected to pay that as an end-user in the end. There is no "company will eat the costs". They will find ways to recoup that and reach similar profitability levels.
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
Lol. You can't play the "I want my money to go to the people that deserve it" card, in the very same sentence as "I want the convenience of using Spotify". Spotify pays artists less than Tidal, Apple and Amazon. And if you're using any of those services, you've already decided that convenience is more important than paying the artists. I use Tidal because it pays artists the most. I also buy music that I listen to a lot on CD or, previously Bandcamp - but Bandcamp just got bought by Epic, so no more purchases from them.
What did the eu hit payment card companies with? Only thing I know about is banning vendors from passing on fees to the customer, which harmed us: it prevented the customer from seeing they were being ripped off by credit card companies at the point of sale. (Genuine question here)
> 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?
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.
> This is why I use cash as much as possible - to delay that day.
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).
Why would I care what a cashier _thinks_ of me when I pay for products with common legal tender? It's a completely normal means of transaction in exchange for products and services.
The pharmacist turned me down from picking up my doctor-prescribed scheduled substance from CVS because I wanted to pay in cash and she thought it seemed suspicious.
Never went to CVS again, I assure you, but cash definitely has a stigma in some situations.
I've never gotten weird looks when paying with cash except during the beginning of the pandemic. But I think that's a special case where we can have exceptions.
Honestly I think it is more concerning the data that they get.
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.
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.
When given the choice, I will always subscribe/pay/book directly with the company rather than use a 3rd party. If something goes wrong it's always easier to only need to deal with one company rather than two. Plus I'm choosing to start a relationship with a company that I give money to and thus want them to be able to use all of that money towards making the service and experience the best possible, rather than have them be handicapped by fees coming right off the top.
I have the opposite experience with subscriptions. Have you ever tried to cancel a gym membership? Famously, companies make it easy to sign up online, but require a phone call (likely with a wait) to cancel. Many places have passed explicit laws [1].
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.
You're right that there are definitely some bad actors for cancelling subscriptions, it's really crappy you've had to deal with that! I once had a recurring charge from rackspace that neither myself nor rackspace's support could tell me which account the charges were associated with! Luckily my credit card company was able to put a block on any charges coming from rackspace rather than have to cancel the entire card.
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.
I'm a bit surprised the credit card companies or banks haven't come up with a system to manage reoccurring payments. They have to mediate these issues and are in a place where they can be a neutral-ish party to set standard rules. Its weird that it has ended up being "tech companies."
> Assuming google works like Apple (correct me if I am wrong)
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.
Last time I checked (admittedly a long time on Apple, as a developer, I couldn't refund and cancel a subscription for my customers. They have to go through Apple to do that. Not a great experience.
It's not a pleasant process for consumers at all, in my experience. I'm not a big fan of hanging around in awkward support chats or calls for things that can usually be resolved with an email.
In my experience as a user in the EU Apple's refund process is pretty good, I've basically never had a refund refused with the "right of withdrawal" option. But I guess it can suck if Apple randomly decides to refuse the refund even if the developer would be willing to accept it, especially for non-EU users.
How much does Google communicate to the user with this?
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.
I'm not really sure. I know some services I've used in the past like Harvest and TaxBot send before-the-renewed notices. Services that used Stripe did not.
I don't understand your comment. It would make sense if Spotify had been using Google for payments and was now planning on introducing their own payment processing.
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".
Or worse, like free mobile in France, force you to send a paper letter with a specific format to cancel service. I cancelled my credit cards instead and will let them try to collect internationally.
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.
＞ 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.
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.
Tinder offers a discount if you subscribe through the web.
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.
Perhaps you might want your spotify account be able to operate independantly from google? I see similarities to google SSO. For some people, being able not remember more credentials is worth giving google more power over your life, for others google SSO is a non-starter and the would much rather make a seperate account with different credentials.
Some people would rather use single use virtual credut card numbers than rely on google to let them cancel when and how they want.
Or monthly SEPA transfers. That I can set and revoke at will. I wish that there was an error-proof (on my side) way to set the exact amount though. And a range acceptable for the company for what day of the month to do the transfer.
I don't understand why I would need to go through anyone else for this than my bank(s) ?
I fully understand that I am... maybe closer to people here but in the grand scheme of things financially I am in a better state than most people.
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.
Right, but it seems like many people here are assuming the 30% cut is for subscription management / payment processing only, ignoring that arguably it also covers all the other benefits the access to centralized App Store gives.
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%”
What if there was another payment system available on iphone with similar subscription centralisation service, with only 10% fee? Would you use that instead?
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.
Maybe it's worth it for no-hassle cancelling though. While 30% is steep, and you should check website pricing vs Apple in-app pricing for something you end up keeping, being able to cancel from a predictable UI is worth something compared to phone, mail in or in-person-only cancellation policies.
> I only see a benefit to developers for this, but from a user prospective going with another system is a downgrade.
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.
That's not a reason to use Google Pay - I want a system which I can directly block. Credit Card allows me to do this.
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.
some cards might work with google play and not spotify, I was like that when I got to a country my uber did not work anymore with my old cards but I added cards to google play and paid for my ride this way. choice is good.
Any optional third party option is not a solution.
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?
Apple could make easy in-app service cancellation a requirement for store approval.
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.
Ok, what if you don’t use paypal. Or if one app uses pay pal, but another wants you to use some other payment solution. You’re still stuck registering to new services and sharing your CC info. So now you also have to remember what service is used by whatever app you are trying to cancel billing for.
You might just as well insist on never linking up your Google account with payment. This might not apply to a random pay to win candycrush clone, but Spotify is enough of an outlier they they likely have quite a few subscribers (or would be subscribers) who never accepted their phone as an app store payment mechanism. I know quite a few people who I'd suspect to be far more willing to hand over they CC data to Spotify than to Apple/Google.
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 sure would have saved Stadia. Sadly, they'd already put in the work securiring partners (Bunge with Destiny 2) and basically had a full product that was first demoed in 2018 under the name 'Project Stream'[0].
> It's so absolutely bizarre to announce something at this stage.
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.
I don't know much about things, but I was immediately left with the feeling that this was a Google action performed vis a vis antitrust. Whether to strengthen a case against Apple or weaken one against them or some other ball game entirely, I have no clue.
I suspect this is entirely for the benefit of PR between internal management. Announcing this at all doesn't make much sense, let alone when you don't actually have it. What's a customer supposed to do with the information, and when is a user even likely to see this? I use Spotify for hours every day, I do not follow their news outlets. So I imagine it's just for internal signalling/prosperity.
imo this is squarely aimed at Apple and the scrutiny they are receiving with respect to Apple Pay. The actual implementation of this is ancillary, what "matters" is Google showing that they can/will do this and Apple don't.
I do see one potential customer benefit: rather than increasing your attack surface by giving two companies your CC info you just give one (google). In theory Google is going to have more security than a bunch of smaller companies.
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).
I use Apple Pay 99% of the time, and with my credit card Apple Pay continued to work even when I had to get a new card number. Didn’t even have to wait for the new card to arrive in the mail before using it. The old inconveniences of a stolen card aren’t so bad anymore.
My bank offers virtual cards. Can generate and disable them in the mobile banking app, no need to go to the physical bank for it. I have a card for each service I pay for. Also useful for "free" trails that wants you to enter a CC. Oh and the the whole virtual card feature is free from my bank, no extra card fees etc. (I'm not in the USA)
It's the opportunity to take more of your revenue as margin, plain and simple.
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.
> I would argue that most businesses do not want to predatorily extract money from unwilling customers
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 don't think many businesses think of their dark patterns/retention schemes as predatory is part of the problem. Outside of the app stores, my experience with subscription services is that a significant number of them engage in what I would consider poor behaviour (making it difficult to cancel/change the level you are subscribed at/trying to get your CC details for trials, etc.). Which resulted in me mostly avoiding subscription services, with the app store and having the ability to control subscriptions from a central location I'm much more willing to sign up and as a result am paying for more of them now then at any point in the past
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 would argue that most businesses do not want to predatorily extract money from unwilling customers
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.
The opportunity for developers (read: the investors and C-level management at companies) being able to save marginally on their cut to Google by allowing the user to select non-Google Play billing. However, I wholly imagine Google agreed to this because they'll still get their cut of subscription revenue on the backend, so Google might only take 25% instead of 30% when the app doesn't use Play Store billing.
So there is no user choice, technically just a lesser commission. Nothing stopping Google from upping this 5% "fee" to 10% when they feel like it.
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)
They offer an awesome development experience and have other complimentary products that all work well together. Especially if your service is multi platform (web, ios, android).
Hah! As if... If there is a reduction in price, it will be temporary so they can get users to switch.
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
Is this "the enemy of my enemy is my friend" play where Google makes Apple look bad in an effort to avoid some of the regulations that might catch Apple?
I cant figure out why Google would want this otherwise?
Spotify is a BIG Google Cloud customer with a $450 million commit back in 2018 [0, 1, 2]. Companies want to keep these types of customers obviously and will leverage other teams internally to get a value add to get that renewal. This is likely just another integration as they look to leverage the relationship across bizdev, partner marketing, and sales teams, internal engineering dogfood projects, discounts, etc. Lots of this type of stuff isn't even targeted at competition just an evolution of the relationship.
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.
I think you may have gotten mixed up between Shopify and Spotify - this is an announcement by the latter, not the former. They're spelled so similarly so it's an easy mistake to make.
You seem to mix up Spotify and Shopify. The Announcement is made by Spotify, you talk about Shopify. But interestingly, your point still stands, as Spotify is also a big Google Cloud customer.
Google made the same decision as Apple when they removed Fortnite in response to Epic Games completely bypassing the store's in-app purchasing flow, thus losing their 30% revenue cut, so the motivation is likely not 'to make Apple look bad'.
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.
> 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.
It has always seemed weird that if I use my Spotify account on my Android phone, iPad, and desktop, who gets a cut of my money depends on which one I use to set up billing.
I feel like only the one processing the transaction should be paid to process the transaction. The usage part is no different than if you used a free app on every device, they make nothing.
Agreed. I mostly use Spotify on a Raspberry Pi using Spotifyd and a display driver I wrote myself, on Linux. Now who should get a cut of my subscription? Do I get any of it?
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?
processing fees are on the order of 2-3% at most, platform fees are 30%. That being said, the platforms do incur all sorts of other costs, but these costs are unequally shared across all apps. A free app with no ads does not pay anything but gets all the same features as a 100$ app who contributes 30$ on each sale. The problem is that there isn't a more "fair" solution.
Of course there is. There are multiple other ways that Apple and Google could decide to charge application providers, but they've decided this one makes them the most money.
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.
So if a large non-profit wants to create an app, let's say Wikipedia, they would have to potentially pay millions? What about people in third world countries where value of their money is worth a fraction, how will they compete?
Why do/should I, as a Spotify subscriber, care about this at all? I don't understand why there's so much fanfare around this. I feel like I'm missing something basic here...
I actually don't think of this as a consumer issue at all. You probably shouldn't care, but I can see why some consumers might care (e.g. how many entities have their credit card on file, concerns about privacy, a desire to allocate as much money as possible to artists...).
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.
I see, thanks. So why would Spotify agree to this if they were able to handle premium subscriptions outside of Google? They expect they will make more money this way even after having to give a cut to Google?
I don't think there is much fanfare. Obviously Google and Spotify want to make a big deal out of this for when regulators come knocking, but as a Spotify user who pays directly to Spotify outside of Play Store, this news is nothing more at a mild irritation at them both patting each other's backs over nothing.
For the reason you mentioned I don’t think its a step in the right direction. Carriers already know how to charge their users. Google and Apple should let the user choose their carrier as a systemwide in—app payment processor. Its a small fix, its a good user experience. Arguably even better than what exists today. And is a step in the right direction (move away from Apple and Google controlled things)
I would hate carrier-based charging. We still have a shared cellular account in my family so I would end up billing someone else, rather than my credit card, and that's on top of giving my carrier more lock-in (subscriptions? delayed billing? etc.).
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.
Yes thats what I see happening. On top of this there would be strict policing by Apple and Google to provide a good user experience. Carriers and banks would certainly be subscription providers. The reason why I like carriers specifically is because they invest in a core resource of the mobile computing experience. Apple provides the compute and storage, while Verizon etc provide the network. So far, Apple has captured most of the value in mobile computing due to aggressive subsidies. If carriers could take a small share of app revenue they would be getting something back. If I subscribe to Stadia via Verizon, it means Verizon can pump that money into mmWave 5G to lower the latency on that cloud gaming experience. I basically just want healthy investment into the infrastructure that matters. I don’t give a shit if Spotify gets to keep more money or not.
Verizon has decades to capture the value but chose to try and do it in customer negative ways by locking you in contracts and locking devices behind contracts.
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.
It still exists on Android, whenever I go to pay for something on Google Play it asks me if I want to bill it to my network account, it appears on my bill the next month.
Or they could allow app devs to integrate with the OS payment API, so that when I want to pay, I get prompted to choose if I want to pay with MyBank App, MyCreditCard App, or ThirdParty App.
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.
It exists, I can "pay with apple pay" that then lets me choose one of the cards in my apple pay wallet.
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.
Imagine if AWS, Azure, Gcloud were charging for your VMs a % of your business revenue… AppStores are services, they should have a fixed price like any other service, and that can cover also variable costs like cents per download, cents per review, etc
You're paying for compute, whereas you can put an app on a store for (basically) free. A million people can download your app and you wouldn't pay a penny more, whereas if a million people suddenly used your AWS app, you'd see a nice bump in cost.
as per my previous comment, they could charge a fixed price per view/download and any other functionality of the app store. It would be the same price for everyone, regardless of revenue, and for most apps, it would be less, fairer, and more transparent
It could be an option, but there is also value for everyone, poor or rich, no matter in what country, being able to host an app, no matter no popular, without going bankrupt. It's the same with Youtube; the ad-model is not ideal, but there is also value to being able to, with the click of a button, host a video that can be watched by millions of people without you paying a penny. Two decades ago that would've been very hard for an average person to do.
with the same amount of compute power one can run a successful business and earn $100M or something not successful and earn $100K. The compute cost is the same, compute does not become more or less expensive just because one makes more or less money with it.
Spotify doesn't disclose their pay cut so I have to assume Google is still getting their cut of revenue, maybe 25% with payment processor fees taken into account instead of 30%, since they surely wouldn't want to set a precedent of any digital content app being able to not pay for the OS/platform by simply adding their own payment method (otherwise Epic wouldn't have needed their lawsuit).
This may sound like a snippy question, but I'm genuinely curious as to why this is considered news? Isn't this just getting another payment option, similar to what many, many other services have been offering for over a decade? Seriously, am I missing something?
Both the Apple App Store and (I believe) the Google Play Store have requirements that any digital goods purchased through an app that's distributed through the App/Play store use the payment system provided by Apple/Google, which takes a 30% cut in most cases.
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.
I'm also confused, as I think I simply pay Spotify for my premium subscription (given I joined Spotify using it mainly on the desktop). Which bit is new?
I just reread the article, because at first it sounded like Spotify was announcing a payment method of their own, ala Google Pay. Instead, this is Spotify announcing that you'll be able to pay for a subscription in the app using another payment method _besides_ Google Pay, which is the standard for all in app purchases. It's only news, because it's the first finde Google has allowed an IAP without going through Google Pay.
So I guess the big questions remains: (1)Do Google still get to tax all revenue made by the app? (2) are we likely to see price differentials, so that Spotify can return some of the savings to users?
I have paid spotify but I can't remember how I got the all or paid for it, other than there is not way it involved google because I wouldn't do that.
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.
For a site filled with developers y’all really misunderstand the whole 30% cut thing.
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.
But why are phones considered gated platforms in the first place?
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.
They mention the fee for small businesses but don’t say that there is 0 fee or a reduced fee for this program, so it’s pretty obvious that they’re still at least making 15% per transaction under this agreement, maybe 27% if they do what Apple did by only reducing their fee to account for the fee taken by the alternative payment processor.
This is great, I guess? Is Google just caving in at a smaller scale before they get forced to do this at a larger scale? I feel like by doing this now, they are trying to dodge something that’s very likely to come down the road. (antitrust regulations)
Then again, partnering with only the big names will create a new wave of complaints.
This does not warrant PR excitement getting built up. It’s just another payment option, not a discount package deal for consumers, so … who cares enough to make a press release about a feature this boring.
ApplePay checkout is so smooth and amazing I wish all apps and websites supported it. More related to this, I am not on the Google ecosystem but if an app in the Appstore offered say something from a third-party and that of Apple's I'd choose Apple's all day long. Subscription management is so much better, I trust the payment platform, and it's all very seamless. That being said, if Apple were not so heavy handed perhaps the other providers could offer or plug into the Apple Pay system.
Imagine being a member of a duopoly with a fairly locked-down market and then releasing the ability to pay another way as a revolutionary "feature" worthy of a press release
Spotify keeps more of the money when you use their payment system instead of Google's. Presumably they'll give you a discount for not using google pay.
Maybe this is controversial but the fact that it's "revolutionary" to use/not use a non play store payment options is a sign of monopolization of payment method this should already have existed. And while I know Google is not the worst (looking at you apple) it's still not an achievement in my eyes it's management imposed dilemma.
I was under the impression that they were combining the libraries or you'd get to pick which provider you wanted to stream music from but use the same app. If all this does is give you the option to pay for Spotify using Spotify app or a Google Pay subscription, then it only matters if Google is giving this option to all developers for any app.
They'll unlock a ton of innovation by letting developers use documented and testable payment platforms instead of the "I really hope this works in production" android (and apple) payment systems. Having to support all of these payment processors is such a pain the ass.
I actually agree with this. We’ve really struggled with Apple Pay. It’s partly our payment processor’s fault but the limited documentation from Apple and the strict limitations we’ve encountered trying to debug Apple Pay has taken us way longer than it should have to get right.
Does this actually reduce the fees, or simply let Spotify make it harder to cancel you subscription? I know on Mac+ios it’s controlled through centralized UI (which let me catch paramount charging two subscription when they renamed some service).
I thought at first it was "pay what you want," which I'd prefer with Spotify.
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.
Google sees the writing on the wall. Their billing monopoly is under threat, and is probably not going to last forever.
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.
Ok sure, but that's not likely to have anything to do with app store pricing etc. That's just GCP trying to acquire customers. They're not going to start trying to punish customers for other decisions because that would be an incredibly way to shoot yourself in the foot. This is a problem AWS already sees a lot.
Smaller companies who partner with large companies like Google or Microsoft see these large co's as single entities and not through their sub-divisions. Spotify probably partners with Google in Ads, Android, Cloud areas at minimum. Spotify is already a publicly-known large GCP user. So they might be just playing their chips.
I just want to point out that Spotify as a position with the title 'Chief Freemium Business Officer'. Is there also a 'Chief Subscription Business Officer'?
This is so terribly full of corporate bullshit snake-oil.
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!
> Together, we’ll work to innovate in how consumers make in-app purchases, deliver engaging experiences across multiple devices, and bring more consumers to the Android platform.
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.
agreed. both of these companies --google and apple-- have leadership that see this as a hill to die on. Apple looks ready to go to the guillotine for the right to gouge startups, while Google seems more amicable to try obfuscation tactics to keep their hand in the cookie jar.
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.
The difference between iOS and Android though is you absolutely can avoid the Google Play app store and install items directly (or through stores like f-droid).
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.
Well - Apple makes everything. From my point of view, they are more similar to a game console platform where a completely verically integrated product experience, including marketing spend and everything sort of justifies a partner-like split of revenue. Google is really just hobbling together a pretty shitty phone platform, with terrible OEM support and drivers OEMs do all the work that Apple does but Google slides in there with the app store and takes a cut. To me Google is much worse
Fdroid is too strict in being against proprietary software to be invested in. Your entire app has to be open source and you can't use any proprietary libraries (including proprietary dependencies needed to build your app). Fdroid has to build your app which can delay releasing updates. Fdroid thinks it's bad to track its users so you will not even know how many people have downloaded your app.
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?
Epic sort of tried. They have three games in the Epic Games App for Android and for a while the only way to play Fortnite on Android was through their app or Samsung's.
I'd be happy not having to read the words 'innovate' for an entire paragraph. SV PR copywriters use 'innovate' like some people use 'fuck' - it substitutes for just about any other word if you work at it.
'Engagement' is similar, but more of a case of people forgetting that customers to not care about your KPIs.
I don't understand how this is a "feature". Is the price different, or the features gained different, or does it just determine who ends up getting what % cut? I can't imagine most people actually care whether Google or Spotify is getting a bigger piece of the same price they're paying either way.
The conditions and trust are different. I personally believe that letting Google have my credit card is allowing a kid with no supervision to play with my life savings; While some others will believe Google provides better guarantees than Spotify when you want to unsubscribe. At least competition will allow us to see “who’s better” and what T&C customers care about, and that’s the important point.
While that's alluded to in some other comments there is 0 proof of this - it'd be a huge issue if the price for choosing another payment processor (while still likely paying Google their Store % cut on the backend) is being an enterprise customer of a completely separate business unit.
Google and Spotify have announced a first-of-its-kind partnership that will give Android users a choice to pay for the music streaming service with a payment method other than Google Play Billing.
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.
This is smart and what Apple should've done. Apple is clearly beholden to the massive cash cow that the App Store has become. Apple's attempts at complying with various orders are that their cut should be 27% and the payment processor can have 3%. That's ridiculous and is going to get them into trouble.
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.
App Store is 15% for developers making up $1 million a year.
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.
That's weird; the side-loaded apps I'm running seem to disagree.
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.
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 dislike Apple, and right now I wouldn't consider buying an Apple product again (I had an iPhone 1 ahead of most people in the UK). I spent the first ~5 years of my career developing on Android and I still use Android.
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.