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4 juillet 2016

MBW review-1Each week, The MBW Review gives our take on some of the biggest recent news stories. This time, things are hotting up between digital music’s two biggest rivals. The MBW Review is supported by FUGA.

Princepic“You discovered a premium feature! You must have a Premium subscription to unlock it.”

This is the message Spotify wants to pop up in front of users of its ad-supported service – but says Apple won’t let it.

According to the Swedish streaming platform’sJonathan Prince, Apple has told Spotify that the message violates its App Store rules – despite, he says today, it not linking to any offer, purchase or outside website.

Apple takes a very different view on things.

This is the latest development in a major fallout between the two companies that started off technical, but is getting increasingly ill-tempered.

The outcome stands to have serious consequences for music rightsholders everywhere.

“As a valued developer in the App Store, we’re disappointed with the public attacks you’ve made and appreciate the opportunity to set the record straight.”

BruceSewellSo goes the beginning of a private letter from Apple’s General Counsel, Bruce Sewell (pictured inset), to his equivalent at Spotify, Horacio Gutierrez, sent on Friday (July 1) – which just-so-happens to have since found its way online.

It’s three pages long, and contains a series of slaps in the face to Spotify.

These include the suggestion that the Swedish firm has “benefited enormously” from its association with the App Store, where it has enjoyed 160m downloads.

Sewell comments that Apple finds it “troubling that you are publicly resorting to rumors and half-truths about our service”, adding:

“To imply that Spotify should not have to pay to avail itself of the benefits of Apple’s hard work would give you a tremendous advantage over other developers. It’s simply unfair and unreasonable.”

Another potshot: “We did not alter our behavior or rules when we introduced our own music streaming service or when Spotify became a competitor.

“Ironically, it is now Spotify that wants things to be different by asking for preferential treatment from Apple – in essence arguing that because we compete Spotify should be treated differently, given waivers and exemptions from the rules that pertain to all other developers on the App Store.”

Spotify-EmailSome context: Spotify has long hated Apple’s stipulation that 30% of any new subscription secured through an iOS app is retained by the Cupertino giant.

Along with other third-party app makers such asPandora, Spotify regards this as a punishing and greedy ‘app tax’ on its growing yet loss-making business.

Apple, on the other hand, points out that it has to pay for its massive App Store somehow, and that keeping a near-third of revenue from its partners is an unobtrusive way of doing so.

In an attempt to offset the lost income caused by this ‘app tax’, Spotify’s in-app subscription price on Apple devices stands at $12.99 – three dollars higher than its standard $9.99 per month Premium charge.

Since the launch of Apple Music in June last year, things have taken a turn for the worse.

Spotify says Apple’s ‘tax’ is now flagrantly anti-competitive; that it’s being forced to charge $12.99 per month for a subscription on the iOS store, while Apple’s streaming rival costs just $9.99-per-month.

To combat this disadvantage, Spotify wants to be able push users outside the App Store, where they can avoid Apple’s ‘app tax’ and sign up to Premium for $9.99-per-month.

No way, says Apple.

Spotify and Apple are at each other’s throats – with the music biz caught in the middle

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