Page 2 – Apple’s Response and The Solution

Apple’s Response

Apple—the principal in my scenario—wasn’t impressed with Spotify’s complaint. General Counsel Bruce Sewell wasted little time writing and leaking his own letter. According to Buzzfeed, which posted the letter in full, Mr. Sewell accused Spotify of demanding special treatment, and said every developer plays by the same rules in the App Store.

From that letter:

There can be no doubt that Spotify has benefited enormously from its association with Apple’s App Store. Since joining the App Store in 2009, Apple’s platform has provided you with over 160 million downloads of your app, resulting in hundreds of millions of dollars in incremental revenue to Spotify. That’s why we find it troubling that you are asking for exemptions to the rules we apply to all developers, and are publicly resorting to rumors and half-truths about our service.

[…]

Shortly after Spotify submitted its app on May 26, our team identified a number of issues, including that the in-app purchase feature had been removed and replaced with an account sign-up feature clearly intended to circumvent Apple’s in-app purchase rules. That feature exists only for the purpose of avoiding having to pay Apple for your use of the App Store by emailing customers within hours, directing them to subscribe to Spotify on its website. A clear violation of the terms every other developer adheres to.

During a number of discussions between our team and Spotify, we explained why this sign-up feature did not comply with our guidelines and requested you resubmit a compliant version of the app. On June 10, Spotify submitted another version of the app which again incorporated the sign-up feature directing App Store customers to submit an email address so they could be contacted directly by Spotify in a continued attempt to get around our guidelines. Spotify’s app was again rejected for attempting to circumvent in-app purchase rules, and not, as you claim, because Spotify was simply seeking to communicate with its customers.

That really does read like a principal calling a lazy student on the carpet, doesn’t it?

The Solution

I’ve long argued Apple should make concessions for business models that simply don’t have an extra 30% built into them. Losing a few commission dollars to make iPhone the premier platform for services would be worth it.

That’s not my call, of course, but Apple recently made a huge concession to subscription services. The company announced a reduction of its cut on subscriptions after the first year, from 30% to 15%.

That’s a significant discount that still rewards Apple for providing the App Store and maintaining a billing system. It also offers a major incentive to developers to keep their customers subscribed. That’s a solid compromise for subscription-based services.

And it kind of makes you wonder why we’re still witnessing this playground spat play out.