Displaying items by tag: Spotify

War of words between Spotify and Apple escalates

Written on Sunday, 17 March 2019 12:53

Spotify has filed a complaint against Apple to the European Commission. Spotify claims that Apple gives itself an “unfair advantage at every turn” as it takes a 30 per cent cut of digital goods sold via iOS apps.

Published in Apps

American rap superstar Jay-Z has failed to translate his star-power into market dominance for his music streaming platform Tidal. In a bid to breathe new life into the platform, Sprint, which is owned by Japan’s SoftBank, said it will purchase one-third of it. Sprint, which is the fourth-largest mobile operator in the U.S., plans to distribute Tidal content exclusives for its customers.

Sprint hasn’t disclosed how much it is paying for its stake in Tidal, but music industry magazine Billboard revealed that the 33 percent stake in the streaming platform was worth $200 million. The platform, released in March 2015 by stars such as Madonna and Coldplay, was originally designed to give control back to artists as the on-demand music streaming industry was growing rapidly.

Under the new deal, Jay-Z and other artists will remain in charge of Tidal and Sprint’s chief executive officer, veteran telecom entrepreneur Marcelo Claure, will sit on its board. In a statement Jay-Z said: “Sprint shares out view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential.”

The appeal of Tidal is that it provides original content and early releases from superstar artists including Jay-Z’s wife Beyonce and rapper Kanye West. It is the only platform to feature the late Prince’s catalog. However, Stockholm-based Spotify remains the most influential music streaming platform with over 40 million paying subscribers.

There is also fierce competition against Tidal from the likes of Apple which has launched its own music streaming service, which has become the world’s number two, but still has just around half the amount of paid subscribers that Spotify enjoys. Amazon is another competitor in the sector, which released its own streaming platform which caters to mainstream music as opposed to the hip clientele. France’s Seezer also holds a strong presence in Europe.

Tidal has marketed itself as the choice for audiophiles through higher-quality files than most rivals, but its premier service – at $19.99 a month in the United States – is twice as expensive. Jay-Z purchased Tidal in 2014 from Aspiro, a Norwegian company that is listed in Sweden, for $56 million. This means, in light of the figure reported for the Sprint deal, that he likely has come out well.

Tidal said in early 2016 that it had three million paying subscribers, although Norwegian business newspaper Dagens Naeringsliv recently alleged that the figure was inflated.

Published in Finance

Spotify, the popular music-streaming service, is said to be in “advanced talks” to acquire its German-based rival streaming service SoundCloud, according to a report by the Financial Times on Wednesday, September 28. The deal could amount to $1 billion, which is what SoundCloud was valued at in July. No specific price has been mentioned however, and a deal hasn’t yet been confirmed.

SoundCloud has become a popular source for streaming music online, boasting about 175 million unique visitors a month, compared with the 100 million active users loyal to Spotify. SoundCloud’s popularity can be attributed to the fact that it not only allows for streaming of music like its competitors Apple and Spotify, but it also allows its users to upload tracks to the site, which has given it the name “YouTube for audio”.

125 million music tracks are contained in SoundCloud’s catalog, including tons of music submitted by users who upload remixes and covers by artists hoping to be discovered. In March, SoundCloud introduced its premium Go tier, which removes free ads found on the free version of the SoundCloud service, CNET reports. Spotify would no doubt be eager to adopt the popularity of SoundCloud and capitalize on its recent successes.

Published in Finance

Tension has risen between the two leading music streaming operators. Spotify recently accused Apple of making it difficult for the music streaming company to compete by blocking a new version of its iPhone app. In a letter to Apple’s top lawyer, Spotify says Apple is “causing grave harm to Spotify and its customers” by rejecting an update to Spotify’s iOS app.

The letter to Apple’s lawyer was sent by Spotify general counsel Horacio Gutierrez, detailing how Apple rejected an updated version of Spotify’s app while citing “business model rules” according to a report by Recode. Apple also demanded that Spotify use Apple’s billing system if the company wants to “use the app to acquire new customers and sell subscriptions.”

The letter further suggests that Spotify plans to use the allegations to fuel its fight over Apple’s rules governing subscription services that use the App Store. In the letter to Apple, Gutierrez wrote: “This latest episode raises serious concerns under both U.S. and EU competition law. It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple’s previous anticompetitive conduct aimed at Spotify… We cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors.”

Even U.S. Senator Elizabeth Warren has spoken out against Apple and its monopoly abuse, accusing Apple, Amazon and Google of locking out the competition. Warren said: “Apple has long used its control of iOS to squash competition in music.”

Spotify has taken its complaints to various regulators in the U.S. and Europe in an effort to bring awareness to the fact that Apple’s subscription policies effectively “punish third-party music services that use Apple’s platform, while boosting Apple Music,” says the Recode report.

Apple’s iTunes billing service doesn’t require subscription. But the issue Spotify highlights is that Apple doesn’t allow Apple users to use an alternate payment system. The reason Apple doesn’t want to give Spotify the freedom to use apps to promote alternative subscription options outside its apps is because the company charges a monthly fee of up to 30 percent for users of its billing system.

Apple’s tight subscription rules have been met with controversy ever since the system was introduced in 2011. While many have agreed to the payment system, Amazon CEO, Jeff Bezos, wasn’t happy about it, and only offers more limited versions of apps in the App Store. It’s even been suggested that Apple’s subscription rules led Amazon to stop selling the Apple TV box in its stores.

Spotify complied with Apple’s billing system for years by charging its customers $13 per month instead of $10 a month which the services sell for outside Apple’s store, in order to cover the expense. The relationship between Apple and Spotify was fine until Apple launched its own music service, which led Spotify to encourage its users to pay for its service outside of iTunes.

When Spotify launched a new “end-run” via a promotional campaign offering new subscribers the opportunity to get three months of its service for just $0.99 if they signed up via Spotify’s own site, Apple then threatened to remove the app from its store unless Spotify stopped encouraging the promotion. This led Spotify to stop its promotion of the campaign, but also led to Spotify cancelling its App Store billing option, thus resulting in the current dispute.

Published in Apps