It could appear quaint contemplating every little thing that’s been happening between Spotify and Apple prior to now few years, however there was as soon as a time when you possibly can pay for Spotify Premium through an in-app subscription. What’s much more stunning is that a number of long-time subscribers should be paying for the service this fashion.
Nevertheless, that may quickly come to a screeching halt as Spotify begins chopping off its Premium subscribers from that period who haven’t moved away from paying for his or her subscriptions by way of Apple’s cost providers.
Since Spotify hasn’t allowed in-app subscriptions in about seven years, this doubtless doesn’t have an effect on many individuals. Nonetheless, Spotify has clearly determined to solid off these few legacy subscriptions, forcing them to enroll immediately in the event that they need to proceed paying for Spotify Premium. Nevertheless, it might even be doing these individuals a favor.
In keeping with Selection, Spotify has been sending out emails to those that nonetheless pay for Spotify Premium this fashion, telling them that Apple’s billing service is not accepted as a type of cost.
“We’re contacting you as a result of once you joined Spotify Premium you used Apple’s billing service to subscribe. Sadly, we not settle for that billing technique as a type of cost.”
The e-mail goes on to inform prospects that their premium subscriptions will routinely be canceled on the finish of the ultimate billing interval, after which they might want to go to Spotify’s web site to resubscribe utilizing a bank card, debit card, or PayPal — after their account has been moved over to the ad-supported Free plan.
The 30% fee that Apple takes on Spotify purchases has lengthy been a significant level of competition that the streaming service has towards Apple, pushing the European firm to file an antitrust grievance in 2019, alleging that the 30% “Apple tax” is stifling competitors and harming customers. Whereas the grievance moved on the sort of pace typical of huge authorities entities, the European Fee lastly handed down a Assertion of Objections earlier this yr, partly siding with Spotify — significantly when it got here to Apple’s extremely controversial “anti-steering” provisions — the clause that prohibits builders from even telling potential prospects that there’s one other means to enroll in their providers.
For its half, Apple has accused Spotify of being disingenuous about how a lot the so-called “Apple tax” is definitely costing it, noting that the few Spotify Premium subscribers that paid by way of the App Retailer from 2014 to 2016 — the one interval in-app subscriptions had been obtainable — labored out to lower than 1% of Spotify’s 100 million premium subscribers. Additional, Spotify solely needed to pay a 15% income share for many of these since Apple drops its fee for subscriptions that reach past twelve months.
That quantity additionally offers us an concept of how many individuals will doubtless be impacted by this sudden change. Through the two-year window that Spotify provided in-app subscriptions, solely round 680,000 individuals used that as a cost technique. After Spotify closed the door on in-app subscriptions in 2016, present subscribers had been allowed to maintain paying that means, though it’s doubtless not too many did.
Seven years is a very long time. Throughout that interval, some doubtless dropped Spotify totally to change to a different service like Apple Music, whereas others canceled their Premium and reverted to the free, ad-supported plan — after which the one method to re-subscribe to Premium could be by direct billing by way of the Spotify web site. Some could have moved to a bundled Spotify Premium service obtainable by way of some cellular suppliers.
The truth that Spotify refused to eat the Apple tax would have doubtless pushed much more individuals to change to direct billing to save cash. In-app subscriptions to Spotify had been at all times priced 30% larger at $12.99, successfully passing the price of utilizing the App Retailer on to the shoppers. This was Spotify’s chief anti-competitive grievance towards Apple because it priced its personal Apple Music service at $9.99 whereas Spotify was “compelled” to cost extra as a consequence of Apple’s 30% fee.
In different phrases, anyone who has been paying for Spotify by way of the App Retailer for the previous seven years has spent $250 extra over that interval than they’d have by subscribing to Spotify immediately within the first place.
Spotify wasn’t the one firm to cost larger costs for in-app subscriptions. Whereas it stopped providing this as a cost technique totally years in the past, Google nonetheless gives YouTube Premium subscriptions by way of the YouTube app — and expenses about 30% extra for many who subscribe that means.