Spotify is both a competitor and a nice little side-earner for Apple, with the Swedish streaming service handing over $156 million in subscription fees to the iPhone maker over the past four years.
According to estimates given to Business Insider by app analytics company Sensor Tower, Spotify made $670 million from subscribers on iOS between 2015 and 2018. Thanks to Apple’s levy on in-app purchases and subscriptions, Spotify was forced to hand over about a fifth of that revenue to Apple.
Spotify has declared war on Apple, announcing on Wednesday that it had filed an antitrust complaint with Europe’s competition watchdog. The crux of its argument is that Apple’s 15-30% levy on in-app purchases and subscriptions is anti-competitive and gives Apple’s own music streaming service, Apple Music, an unfair advantage.
The chart below gives an idea of the economics behind Spotify’s fight with Apple.
It shows an estimate of how much revenue Spotify makes from its iOS subscribers and how much Apple skims off the top, according to Sensor Tower’s data.
Note that Apple took its biggest cut in 2015 and 2016, when Spotify was the top-grossing app globally on the App Store, according to Sensor Tower . It was also before the impact of Spotify circumventing Apple’s 30% levy began to kick in.
After 2016, you can see a substantial dropoff in Spotify’s recorded iOS revenue. That’s because Spotify began driving subscribers to its website to pay for its premium service, rather than the App Store.
It’s hard to calculate how much Apple missed out on as a result of Spotify’s workaround, but back-of-the-envelope maths suggests it could be as much as $98 million over four years.
In total then, Apple could have made $254 million from Spotify over the past four years, rather than $156 million. (We got to that figure by calculating the mean of Apple’s Spotify revenue from 2015 and 2016, when it earned the most, and then multiplying it by four years.)
Although $156 million is small change for Apple, which posted a profit of $60 billion in 2018 financial year, Spotify needs every dollar it can get. The firm has predicted an operating loss of up to 360 million ($407 million) for 2019.
Snap Appoints New Execs As It Aims To Keep 2019 Momentum
Snap has another appointment in the apt saga of its ephemeral CFOs.
Four months after losing its CFO Tim Stone following a reported “personality clash” between Stone and CEO Evan Spiegel, Snap has promoted its VP of Finance Derek Andersen to the role, the company said Monday. Andersen is the company’s third CFO since March of 2017 when it went public.
Lara Sweet, who was serving as the company’s interim CFO as well as the chief accounting officer, will be stepping into a new role as chief people officer.
Snap has had a less cataclysmic 2019 in the public markets compared to its two previous calendar years. Snap has nearly doubled its share price since the year’s start, though the stock still sits just above where it was one year ago.
L.A.X Covers Taylor Live Magazine’s Latest Issue | PHOTOS
Damilola Abdul Razak Afolabi popularly known as L.A.X covers Taylor Live Magazine’s Latest Issue.
In a quick chat with the magazine, L.A.X talks about his journey in the music industry, why he decided to break out and start his own record label and more.
See his editorial spread below.
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