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March 1, 2018 08:50 am

Even With Double the Subscribers, Spotify Says Apple Will Always Have an Edge Owning the App Store

On Wednesday, Spotify filed for a direct listing in the U.S., sidestepping the traditional IPO process, and now we're starting to see some of the true financial guts of the company -- and some of the significant risks it faces from challenging services from Apple and Google. From a report: Apple, for example, charges apps a percentage of revenue for subscriptions processed through the App Store. Apple Music, meanwhile, will always deliver Apple 100 percent of the subscription revenue that it receives from subscribers (sans record fees and all that kind of stuff, of course). Apple, too, has a direct integration with its iOS devices and also a huge amount of brand recognition, even though Spotify is a massive service. Spotify says it has 159 million monthly active users and 71 million premium subscribers, while Apple has 36 million paying subscribers as of February 2018. Spotify said, "In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. As the market for on-demand music on the internet and mobile and connected devices increases, new competitors, business models, and solutions are likely to emerge."

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