Spotify nixing Apple tax

Presumably feeling the heat from Apple Music, Spotify has cunningly created a smart workaround for the so-called Apple tax, a 30 percent cut the company makes on sales of content subscriptions sold within apps.

Normally, when you upgrade to Spotify Premium in their iPhone and iPad, Apple brings up a standard prompt to confirm your purchase through the iTunes billing system. For those unaware, all in-app subscriptions are subject to the same 70:30 revenue split like apps sold on the App Store and Mac App Store.

But as The Verge said Wednesday, Spotify is employing new tactics seeking to encourage people who would subscribe to their Premium through the iPhone app to instead transfer their account onto the web and save $3 per month in the process.

An anti-iTunes public service announcement that Spotify sent via email invites iPhone customers to stop paying for Premium subscriptions through Apple’s In-App Subscription system and instead sign up for the Premium tier on the web and “save $3, every month.”

“We like you just the way you are. Don’t change. Ever,” opens the smartly-worded email.

“But if you want to change how much you pay for Spotify Premium, we are here to help,” continues the message. Making note of the fact that Spotify Premium costs $9.99 per month on the web versus $12.99 on iTunes, the email blast goes on to underscore that “Apple charges 30 percent on all payments made through iTunes.”

“You can get the exactly same Spotify for $9.99 per month” if you switch your payments to Spotify.com. “There are no transaction costs and you’ll save money,” argues the Swedish streaming-music startup.

Spotify, like many other service providers who take advantage of the iTunes billing system, raise prices for in-app iPhone content in order to account for the 30 percent in revenues lost to Apple.

Premium subscriptions purchased via Spotify for iPhone are priced at $12.99, while the same subscription on the web costs $9.99 per month, like Apple Music.

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Spotify is instructing users to disable auto-renew on their $12.99 per month App Store subscription. As soon as their current subscription ends, users are advised to sign up for the $9.99 Premium account on the web, saving $3 per month, every month.

“Pardon us if you can’t do this immediately. Your current plan needs to end first,” Spotify says.

As of last month, Spotify had 75 million active users and 20 million paid subscribers.

No matter how you look at it, it is indeed cheaper to subscribe to Spotify Premium on the web than through iTunes. On an annual basis, you could save yourself a cool $36 by leaving the convenience of one-tap subscription purchases through iTunes.

The question is, will you go down that route?

Spotify’s free of charge streaming client is available in the App Store.

Source: The Verge

  • mlo99

    As much as I love Apple, I still prefer Spotify over Apple Music, well so far anyway.

    • Apple has great family pricing which is the main reason I’m going to stick with them but I might keep Spotify around too since I have cheap student pricing (£5 a month)…

      The only thing I don’t like about Apple Music so far is the fact that it butchered my iTunes Library but hey that’s teething problems for you and also why I backup religiously.

    • Once Apple polishes the app which is bound to happen with few iterations, Spotify is in big trouble. The Music App is a mess right now, but I found that it has more music and that their human curated playlists are really above and beyond Spotifys. I find myself more and more saving the whole lists that Apple creates rather then creating my own. I have listened to several where I maybe didn’t like one track on the whole list. That never happened with Spotify. I’m keeping both subscriptions right now, but I have a feeling if Apple fixes some of the bugs I will end up switching in three months.

    • MCTDynamic

      Apple Music is such a disappointment for me. It completely messed up the simplicity of my Music app. There’s a Connect tab that I will never use. The radio feature doesn’t allow me to view my saved/favorite radio stations; instead provides me with all these useless genre stations I never would use. I use to have Artists, Songs, and Albums easily accessible on the bottom tabs, but now they are all mushed into one tab; making switch from there. I don’t ever use Recently Added, and if I do, I can just use it through the playlist, therefore I don’t need it taking the top half of the screen.

  • Kominimatchen

    Soo far Spotify murders Apple on all levels..Even faster loading trax and Spotify just kills Apple when IT comes to software features and organising music, and search results everything … Spotify is lightyears Ahead.., i Love Apple products but this isnt Apples court by far…

    • Maxim∑

      This comment doesnt make much sense but anyway… Most people who will stay on Apple music will do it for the system integration. Loading speed seems to be a personal problem..

      And when you appose something Apple does you don’t need to tell everyone you love them

      • Kominimatchen

        Well anyways … I always look for the “best” things and when IT comes to musicstreaming , Spotify is the best choice ATM…only ..Only adv i see with applemusic is systemintgration .. But fails in so many ways…

      • Phil Randle

        Apple Music loading times have improved for me since launch, its quite quick now. The big reason I stay with Apple Music is Spotify is just a music catalogue, there music discovery sucks big time.

        Using Apple Music, things like Beats1 and For you have found much more music then the garbage explore tab in Spotify could ever do.

        Thats the kind of thing that is hard to implement overnight, and Apple Music have that, Server side issues are easy to fix, and a company like Apple who have over 100B in cash could no doubt come up with a quick fix, Spotify doesn’t have the money to hire a team of people big enough to curate playlists of their own.

      • trove

        Apple doesn’t have 100 Billion in CASH. Who told you this nonsense? LOL

    • JoJo

      I agree with you to a certain extent. You should have seen spotify when it first came out. Lets give Apple Music a while to settle in and find its place. I’m pretty sure it will performance wise at least match or best spotify in no time. Seeing how it has Apple money to back it up. On the workings of app itself wel thats a matter of taste. I for one like it however I’m so used to spotify I wont easily switch over. Apple Music definitely has some room for improvement.

      • Jamessmooth

        Totally agree with you.

    • Jamessmooth

      I’ve actually noticed lag with tracks on apple music too. Sometimes it will just stop playing, go to the beginning of the track, etc. This has happened on LTE, and WiFi

  • regkilla

    BDaySpotify 😉

    • Lucus Bendzsa

      WHEN I UPGRADED MY JAILBREAK I LOST THE OLD IPA

  • Nesly Lacroix

    This is what Apple Music Now Playing screen looks like in landscape mode.

  • Where is the last year iTunes radio?

    • Smegmatron

      Right next to Ping

  • Love To Hate

    They better start talking about better family pricing or else I’m jumping ship.

  • Paymon John Vafa

    How’s the music selection on apple music? Does it beat spotify’s yet?

    • Smegmatron

      Yes. For me the killer features is Beats1 radio..its awesome

  • 5723alex .

    Apple will dump Spotify’s app from app store.

  • iPhoneWINS

    no thanks