Are you also an Apple user and find it annoying that you have different subscriptions for all their applications? On September 15th Apple announced that Apple One is coming this fall. So, what is Apple One? Apple one is the bundling technique of Apple, where different subscription will fall into one subscription. There will be three different subscription plans: individual ($14.95 per month), family ($19.95 per month) and premier ($29.95 per month). Each subscription has at least Apple Music, Apple TV+, Apple Arcade and different iCloud storage amounts. Unfortunately, the premier version will not be available in every country.
The lawsuits against Apple’s 30 percent commission
Apple recently has been in the news regarding its fight with Epic Games, as the game Fortnite has been banned from the Apple Store. However, Fortnite disagreed on the 30 percent commission of Apple and found another way to arrange the payments. For this reason, Apple has removed the Fortnite app and as a result of that Epic Games went to court. However, in a provisional statement from the court it puts Apple in its right as they do not have to put Fortnite back into the store.
In March 2019 Spotify also filled a complaint against Apple for the 30 percent commission, as this was anti-competitive behavior because of the dominant position Apple has.
Besides Epic Games and Spotify, Facebook has also been complaining about this 30 percent commission.
Is Spotify really losing its customers?
With the Apple One on its way, Spotify has been complaining that Apple is again using their dominant position with showing an anti-competitive behavior. Spotify says that Apple is disadvantaging its competitors by launching Apple One, as consumer will favor the products of Apple itself. However, is this reality? The numbers of users of Spotify and Apple Music from March 2020 show that Spotify still has the majority of customers with a number 138 million, while Apple Music has a total of 72 million users. The launch of Apple One will show whether Spotify is complaining for the right reason.
Sources:
https://www.apple.com/newsroom/2020/09/apple-one-makes-enjoying-apple-subscription-services-easier-than-ever/
https://nos.nl/artikel/2345819-apple-gooit-deur-dicht-voor-fortnite-maker-epic-games.html
https://www.bbc.com/news/technology-53773715
https://www.theguardian.com/technology/2019/may/06/apple-eu-investigation-spotify-iphone-app-store
https://www.businessinsider.com/spotify-apple-fight-apple-one-subscription-bundle-2020-9?international=true&r=US&IR=T
https://www.statista.com/chart/8399/spotify-apple-music-paid-subscribers/
Interesting article You Shi Liem! The re-bundling of Apple software is an interesting phenomenon. Not too long ago, iTunes was the dominant software that include many functionalities such as music listening, downloading and ripping, video watching and sharing, and even provided access to data storage on your iPhone. After unbundling these individual functionalities, partially due to increased competition from, amongst others, Spotify, they now decided to reverse this and include additional functionalities. It is no wonder that Apple users prefer to have less subscriptions, after all that is why they chose Apple over other, separated companies.
The bundling and interconnection that Apple has provided since their major boost in popularity with the iPhone has always been attractive to Apple-fans. The seamless integration of all their products is one of their key-selling points, one that is only now starting to be imitated by their main competitors Samsung and Google, among others. Apple users expected this kind of service for a long time now and it should be an interesting way forward.
Very interesting article. I have recently read a book on the start up story of Spotify and the problems they encountered with their launch in the USA. In the book they mentioned that Apple was denying app updates for the Spotify app and thereby blocking the improvement of the Spotify app for IOS users. I don’t think the story will end here. It is true that Apple has tremendous market power and I think that is a threat for competition in this way. To many companies depend on Apple and it is not optimal to have such a powerful company. My prediction is that more lawsuits will follow and that one day there will be some form of regulation on Apple and there hindering of competition.
Thank you for the insights You Shi! It is definitely interesting that Apple is launching a bundled service when they have been under so much scrutiny for the amount of control they have in the entertainment industry. Let’s see what this means for any future litigation issues which the company may have. For now I believe that customers are also loyal to Spotify given the tailored algorithms for music recommendation. If Apple is able to convince customers to switch to Spotify, it will be interesting to see what the future holds for the company.