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Last.Fm Founder Criticizes Apple Over Music Subscription Fees

Soulskill posted more than 3 years ago | from the blood-from-a-stone dept.

Businesses 218

An anonymous reader writes "Apparently not one to mince words, Last.fm founder Richard Jones lambasted Apple for their recently announced App Store subscription rules. 'Apple just ****ed over online music subs for the iPhone,' Jones wrote in IRC earlier this week. Taking things further, Jones angrily theorized that by effectively preventing subscription services like Rhapsody and Spotify from thriving on iTunes, Apple is paving the way for its own music subscription service where it will, surprise surprise, face little to no competition." Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive. Another article suggests that Apple's fee structure will highlight the publishing industry's broken business model. Some analysts expect it to raise antitrust concerns, though the wave of Android tablets hitting the market may stifle that sentiment.

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218 comments

Funny... (5, Insightful)

dwightk (415372) | more than 3 years ago | (#35246542)

that's what artists say subscription services are doing to the music industry

http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ [informatio...utiful.net]

Re:Funny... (0)

Anonymous Coward | more than 3 years ago | (#35246822)

Coincidentaly, that's also what Mom and Pop said when Walmart came to town.

Re:Funny... (1)

CheerfulMacFanboy (1900788) | more than 3 years ago | (#35246884)

Coincidentaly, that's also what Mom and Pop said when Walmart came to town.

Coincidentaly, that's also what the analogy said when you killed it.

Re:Funny... (0)

Anonymous Coward | more than 3 years ago | (#35246942)

Coincidentally, that's also what the dead horse said when you beat it.

Re:Funny... (0)

Anonymous Coward | more than 3 years ago | (#35247118)

He sure seemed happy at the time.

Oh, i do miss ol' Bob, i really do.

Re:Funny... (0)

Anonymous Coward | more than 3 years ago | (#35246934)

How much should an artist get for a single play of their song? I think well under 1 cent per play is not unreasonable. How much do they make when there song is played on the radio?

Re:Funny... (1)

dwightk (415372) | more than 3 years ago | (#35247202)

How many bands are going to 1) be satisfied with minimum wage and 2) get 1.5M plays per month ?

Just some more questions. I'm not trying to argue.

Re:Funny... (1)

Cwix (1671282) | more than 3 years ago | (#35247466)

Per #2

At half a cent per stream (and 1.5m plays a month) they would make 75k a month A MONTH. That would be 900k a year. There really arn't that many artists that I think should receive 900k a year. The ones who do deserve that, will have no issues getting the 1.5 million plays a month.

Re:Funny... (0)

Anonymous Coward | more than 3 years ago | (#35247542)

Your numbers are way off. A performer needs only 123,000 plays a month at $0.001 to make minimum wage. 1.5 million would, effectively, make them rich.

Musicians and Apple (1)

rishistar (662278) | more than 3 years ago | (#35247594)

Plus don't forget the 30% they take from the artist/label for any music they sell on iTunes as well.

Re:Funny... (1)

oliverthered (187439) | more than 3 years ago | (#35247188)

Yeh, so where's the money cut? Shouldn't they be bitching about record labels a bit more, or is it the heavily produces singers who already make shit loads that are complaining?

Cy me a River (1)

oh_my_080980980 (773867) | more than 3 years ago | (#35246606)

No one cares Jones. Subscriptions are a waste of money!

Re:Cy me a River (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35246836)

No one cares Jones. Subscriptions are a waste of money!

You ever tried it? Personally I enjoy having access to virtually every song ever made and not having to maintain a collection of MP3s.

Re:Cy me a River (1)

h4rr4r (612664) | more than 3 years ago | (#35246948)

Really every song ever made?

Please do inform me where I can find such a service.

Re:Cy me a River (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35247116)

I said 'virtually'.

I've been a Rhapsody subscriber for years. Whenever a song pops into mind that I want to hear Rhapsody has it nearly every time. 15 seconds later I'm listening to it.

Re:Cy me a River (1)

h4rr4r (612664) | more than 3 years ago | (#35247318)

I will check it out, provided their service works with linux and android. Hopefully their catalog has more depth and breadth than Pandora.

Re:Cy me a River (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35247436)

Rhapsody *might* work via web browser on Linux, but I don't know this as fact. Honestly, knowing that you use Linux, I wouldn't send you Rhapsody's way. (Although it doesn't hurt to check it out.) I *think* they have an Android version, if not I think it's coming soon.

I might suggest you head towards Napster instead. At the very least, if you pay the $60 for a year, you get 60 MP3 downloads. So even if you think the service sucks you can get your Mp3s and be done wtih it.

Not good enough (1)

alvinrod (889928) | more than 3 years ago | (#35247506)

If I'm going monthly, I want everything.

Their catalog isn't really any worse than iTunes, but that's not good enough. Neither iTunes or Amazon have everything I want and Amazon doesn't usually disappoint.

On a side note, if anyone knows where I can get a digital copy of Z-Rock Hawaii I'd be more than willing to provide some business to them. None of the major online stores have the album and I haven't found it on any of the streaming sites either.

Maybe it's just me, but I'd rather own my music (DRM-free of course.) so that I don't need a net connection in order to listen to it. A lot of bands have been offering samples of their music for free, whether it's through YouTube videos or through their official site. Paying for a subscription seems like a waste. Honestly, having your music freely available online makes me more likely to listen to it and consider buying it. It's not that I want free so much as I'm just lazy. If you make me jump through too many hoops I'll just find something else.

Re:Not good enough (1)

lgw (121541) | more than 3 years ago | (#35247670)

I doubt NetFlix has lost even a dollar in subscription fees from geeks ripping copies of rented discs (distributing those copies is a different matter). I doubt allowing you to make copies of subscribed songs would cost the provider a dollar (distributing those copies is a different matter).

Subscription seems to be the future, because it can be carefully tuned to extract the maximum from teenagers, as long as offline play worked well enough for that market.

Re:Cy me a River (1)

MogNuts (97512) | more than 3 years ago | (#35247190)

I'm sure those services have more than you do, that's for sure.

Re:Cy me a River (1)

h4rr4r (612664) | more than 3 years ago | (#35247272)

More surely, but do they have what I want is the question.

Re:Cy me a River (5, Insightful)

pyalot (1197273) | more than 3 years ago | (#35247024)

Actually, the big 4 (Sony BMG, EMI, Warner and Universal who account for something like 99% of the content on the big subscription services) together only make about 5 million songs available. Together they have a back-catalogue of about 200 million songs, most of which you'll never see again in any shape and form because they deem the cost of media transfer and meta-data editing to high in relation to how many they'll sell of each.

Re:Cy me a River (1)

dotwhynot (938895) | more than 3 years ago | (#35247326)

Actually, the big 4 (Sony BMG, EMI, Warner and Universal who account for something like 99% of the content on the big subscription services) together only make about 5 million songs available. Together they have a back-catalogue of about 200 million songs, most of which you'll never see again in any shape and form because they deem the cost of media transfer and meta-data editing to high in relation to how many they'll sell of each.

I don't know about the 200 mill number, but Spotify have over 10 million tracks. There are some holes in the catalogue, but very few. And those 10 mill tracks are available to me right now, for almost nothing - around half a dollar per day in a high-cost country, where do I go to buy the 200 mill and at what cost?

/yeah, I like Spotify, but not in any way connected with them

Re:Cy me a River (1)

BlackSnake112 (912158) | more than 3 years ago | (#35247090)

But it'll cost you for that access. Also remember that after 5 'moves' you have to buy the song again.

Isn't the article about magazine subscriptions?

Re:Cy me a River (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35247340)

But it'll cost you for that access.

Well.. yeah, services cost money. I think I'm misunderstanding your point.

Also remember that after 5 'moves' you have to buy the song again.

I'm unfamiliar with Last.fm. With Rhapsody and Napster you pay a monthly fee and listen to all you want. There are more distinctions between those two but I'm not sure anybody's terribly interested in hearing about them.

Isn't the article about magazine subscriptions?

I didn't read the article, but the headline says 'music subscriptions'. I'm personally annoyed with Apple about it, too. I was a Rhapsody subscriber before the iPhone was even in development. I don't see why they should get a cut of my subscription fee without at least showing me that using the service is somehow costing Apple money. (i.e. if Rhapsody was sending the stream through Apple's servers I'd understand a little better.) If I had become a Rhapsody subscriber by finding it in the App Store, that'd be different.

Err now I'm rambling, sorry.

Re:Cy me a River (2)

dotwhynot (938895) | more than 3 years ago | (#35247152)

No one cares Jones. Subscriptions are a waste of money!

I used to think this. Then Spotify came along. It changed everything, and represent to me the new model for music everybody is asking for.

Not only the streaming promise of having access to unlimited music, but so elegantly, user friendly, fast and easy implemented. Plus sharing with friends, social playlists and offline syncing to mobile devices. One day I suddenly relalized I even preferred using it to play tracks I already had on the harddisk. So damn convenient is it.

When you have friends over, you have most any music anybody would like to play. I know I don't "own" it, but the amount of Spotify music I've played already, it would have cost me a fortune to own it. And I would have thought of the per-track cost every time, instead of just adding any music I and friends feel like playing. The small sub fee is a damn good deal for enjoying this, even if I don't own it.

And for me, discovery of new music have increased as well. And since most people I know take for granted that everybody has Spotify, you can easily share direct links to tracks and playlists.

Reading over this sounds like a hallelujah sales pitch, but I'll stand by it god damnit, Spotify have change how I buy and consume music for me and very many people I know.

Re:Cy me a River (1)

jdpars (1480913) | more than 3 years ago | (#35247300)

I think the root idea here is that buying music on a song-by-song basis is no longer feasible at current costs. Everyone loved the 99 cent songs on iTunes, but now even that is way too much. Is a dollar really worth the average amount of time you listen to a song? I'd wager that's, at absolute most, an hour per month for most people, for an average song.

Re:Cy me a River (1)

lgw (121541) | more than 3 years ago | (#35247710)

Is there any way to get your spotify tunes in your car without a smartphone?

Re:Cy me a River (0)

Anonymous Coward | more than 3 years ago | (#35247588)

Not for me. I have Rhapsody. My kids and I fill up our MP3 players with as much as they will hold for a total of $15 a month (thats about 48GB between us). I also stream live to any computer and my Droid and N800 for no additional fees. All for $15/month. Sure, if I stop paying the monthly fee we all lose everything but who cares. I pay $90/month for cable and I get nothing to keep in return either and I can't stream the shows and movies of my choice with that.

Side note..
I also use Pandora with is great at finding new songs I may like (mostly different sub-genres of electronic which gets no playtime anywhere in the US). When new song is played on Pandora that I like, I search for it on Rhapsody and add it to one of my playlists. Now I can listen to it any time I want.

The Rhapsody web interface and the native app aren't the greatest but they work and synchronizing our three separate players is as easy as plugging them in.

What competition is (0, Flamebait)

noidentity (188756) | more than 3 years ago | (#35246616)

Apple is paving the way for its own music subscription service where it will, surprise surprise, face little to no competition.

So, I take it Last.Fm would allow me to run my own streaming service within theirs, and make money off it? After all, if they lock me out, they face little to no competition.

Re:What competition is (1)

_Sprocket_ (42527) | more than 3 years ago | (#35246682)

So you're saying Last.Fm is comparable to an iPod / iPhone / iPad?

Re:What competition is (3, Insightful)

betterunixthanunix (980855) | more than 3 years ago | (#35246766)

Does Last.FM make computers? No. Does Apple make computers? Yes. Do some of Apple's computer products feature restriction systems that allow Apple to prevent Last.FM from competing for the users of those devices? You bet.

Re:What competition is (1)

Anonymous Coward | more than 3 years ago | (#35247046)

Do you talk to yourself? Yes!

Re:What competition is (0)

Anonymous Coward | more than 3 years ago | (#35247278)

Apple's computers don't restrict LastFm, Apple's software does -- just as LastFm's maintains control over who streams in its software. You can certainly use Apple computer devices to run LastFm, you just can't use the App Store or non-jailbroken copies of iOS to do it.

Re:What competition is (0)

Anonymous Coward | more than 3 years ago | (#35247302)

a) That is just paranoia. Neither Apple nor any of the other corporate boogeymen you fear lock out 3rd party software.

b) How is that not true of any piece of hardware made, that has software capable of being updated?

Re:What competition is (1)

im_thatoneguy (819432) | more than 3 years ago | (#35247060)

Last.Fm doesn't block me from installing *other* applications on my computer though outside of their control.

Re:What competition is (1)

CheerfulMacFanboy (1900788) | more than 3 years ago | (#35247232)

Last.Fm doesn't block me from installing *other* applications on my computer though outside of their control.

And Apple doesn't stop you from streaming music from a less whiney provider. Or a free service, like last.fm - wait , what? They complain because somebody asks money for something for extra features?

Re:What competition is (1)

Americano (920576) | more than 3 years ago | (#35247442)

And Apple doesn't stop you from signing up and subscribing on the last.fm web site, thus allowing last.fm to retain 100% of all profits generated by the subscription.

Of course, that requires last.fm to maintain their own customer tracking and billing system, too, which will cost them money.

The only "restriction" is that you can't say "Sign up on the web site, for $10, or right here in the app for $20!" -- the terms must be identical.

Americano=big talking MacFag (with no CSC degree) (-1)

Anonymous Coward | more than 3 years ago | (#35247482)

"If I were attacking you, you'd know it." - by Americano (920576) on Thursday February 17, @09:24PM (#35240248)

Then, what's my IP address, Mac Fag? LOL... can't produce that even, and yet that "big talk" quoted above?? LMAO!

---

"I have no need to prove myself to you, you troll." - by Americano (920576) on Thursday February 17, @09:24PM (#35240248)

LOL, as I suspected & knew to be true: You don't have a collegiate degree. Tell us what school, then, and your name that's on this degree (the one you don't have), ok?

Watch Mac Fag Americano "dance" folks!

APK

P.S.=> You're a BIG TALKING "Mac Fag"... lol, but that's about it... apk

Re:Americano=big talking MacFag (with no CSC degre (1)

Americano (920576) | more than 3 years ago | (#35247716)

APK = OFF TOPIC TROLL. Enjoy the downmods, now I understand why you're too chickenshit to sign up for an account.

Re:What competition is (1)

noidentity (188756) | more than 3 years ago | (#35247310)

Why did I get modded down? I'm trying to come up with things besides "mods disagreed with my view" but am failing.

Re:What competition is (0)

Anonymous Coward | more than 3 years ago | (#35247568)

I considered modding down, but didn't b/c there's not a "Strawman" mod. I guess other mods decided that "Strawman" == "Overrated"

Oh Jonesy (1)

WrongSizeGlass (838941) | more than 3 years ago | (#35246642)

Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive.

Then price your products accordingly. People are willing to pay for iPads because of the convenience - they will pay for iSubscriptions for exactly the same reason.

Re:Oh Jonesy (5, Informative)

VGPowerlord (621254) | more than 3 years ago | (#35246722)

Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive.

Then price your products accordingly. People are willing to pay for iPads because of the convenience - they will pay for iSubscriptions for exactly the same reason.

According to new stories I've read from other sites on the same subject, Apple forbids them from charging more to iOS users than they do through their own web storefront.

Re:Oh Jonesy (0)

WrongSizeGlass (838941) | more than 3 years ago | (#35246810)

According to new stories I've read from other sites on the same subject, Apple forbids them from charging more to iOS users than they do through their own web storefront.

Yup ... charge them all the same for the iSubscriptions/eSubscriptions, just price your product so it is profitable. If you don't then you won't be producing anything before too long. If your product ends up too expensive (eg, you'll need to charge more than the market feels it's worth) then your business plan needs some work.

Re:Oh Jonesy (1)

stagg (1606187) | more than 3 years ago | (#35246892)

That only works if your profit margins can spare 30%.

Re:Oh Jonesy (4, Informative)

DdJ (10790) | more than 3 years ago | (#35247050)

People were doing that. The thing is, if you've already got development and distribution and promotion and all that stuff handled otherwise, factoring in 30% for essentially nothing but payment processing is pretty much unprecedented.

Something like 2% or 3% is closer to normal. Given the tie-in to an existing and popular gift card ecosystem (iTunes cards) and the near universal participation in the system by iOS users, maybe even 5% would have been reasonable. But 30%, for just payment processing? Even as an avid iPhone/iPad/MacOS user myself... too much, too much.

(Unless you're allowed to charge more to make up for it. That'd be better.)

Re:Oh Jonesy (0)

Anonymous Coward | more than 3 years ago | (#35247304)

It's not nothing but payment processing. It's delivery of the product, storage of the product, advertising, and virtual shelf space. The servers and bandwidth that make up the Apple app store cost money. They are also potentially collecting marketing information if customers opt-in. It's the equivalent of setting up an entirely new distribution network in order to reach millions of potential customers. In the real world, news-stands are owned by individual owners who take on the risk and cost of moving issues. In the virtual world, Apple is taking on that role for a population the size of Mexico City but much, much richer. And they're not demanding exclusivity, they're just charging a toll on the highway that they created. If publishers want to go to all the trouble to create their own web-based subscription fulfillment service (something they have proven to be exceedingly bad at), assuming it uses a real standard like HTML5 or PDF, they can still sell to iPad users on their own if they don't like the 30%. But I bet it would cost them more to do so.

Re:Oh Jonesy (1)

VGPowerlord (621254) | more than 3 years ago | (#35247132)

According to new stories I've read from other sites on the same subject, Apple forbids them from charging more to iOS users than they do through their own web storefront.

Yup ... charge them all the same for the iSubscriptions/eSubscriptions, just price your product so it is profitable. If you don't then you won't be producing anything before too long. If your product ends up too expensive (eg, you'll need to charge more than the market feels it's worth) then your business plan needs some work.

It's not the same price, though. Last.FM would make 30% less from iOS customers, as Apple takes a 30% cut. And, as you mentioned before:

Then price your products accordingly. People are willing to pay for iPads because of the convenience - they will pay for iSubscriptions for exactly the same reason.

If iOS customers are willing to pay more, why would Last.FM intentionally make a deal where they make less?

Re:Oh Jonesy (1)

Jumperalex (185007) | more than 3 years ago | (#35247612)

Seems to me the solution is charge iOS users the same price regardless of subscription source but charge less for Android/Win7/RIM/etc users. Or does the Cult of Steve think they can dictate terms between two non-Apple entities beyond jumping up and down, stamping its feet, and complaining that they are being competed against?

Re:Oh Jonesy (0)

MogNuts (97512) | more than 3 years ago | (#35247154)

I take it you have never had any business experience, worked in business, or any education in it whatsoever.

All businesses pretty much adhere to a general way of operating, finance and accounting-wise. All retail is pretty much within, for example, 3%-10 margins on average. Some items more, some less. All prices for particular products in particular categories all are within certain ranges. This stuff isn't pulled out of their asses. You can't just charge more for the hell of it. I'm sure you've even heard of as the price goes higher, consumer demand goes lower.

Or to put it in a simple way your completely clueless post can understand:

"I'm sure you no problem with your employer telling you that you should take a $10,000 pay cut. Even though you're just about breaking even after paying all your bills. Doesn't matter. It's your problem and if you can't cope, you shouldn't be living on your own."

Re:Oh Jonesy (0)

Anonymous Coward | more than 3 years ago | (#35247230)

The thing is, some of the subscription services are already fighting the RIAA etc. to maintain a balance of competitive and profitable. I specifically remember reading an article (sorry, google it yourself; I'm too damn lazy) describing that argument and reaching a deal that worked out for both sides, based on a percent value. Moving their prices higher just to account for one distribution means could hurt them in the competitive end. Not moving their prices higher to a point where that is a legitimate concern, they may have to worry about making a reasonable profit at all. It makes sense that they are concerned about that move.

They already have the music industry trying to grab as much of their profit as they can, they don't need the distributor doing the same unreasonably. If they were allowed to add a little price bump for Apple to grab their share out of, I'm sure it wouldn't be so much of a problem--they'd probably be able to maintain the same level they're at now. But that's not the case, so of course, they're going to be concerned about getting fucked out of their business model that is working just fine before Apple decided to get greedy with them.

Re:Oh Jonesy (1)

betterunixthanunix (980855) | more than 3 years ago | (#35247256)

There is no reason to assume that Last.FM can profitably raise its prices, or that it could raise its prices enough to afford paying Apple's 30% fee without losing more customers than it would gain. What if Last.FM is already operating at or very near to the equilibrium price point?

Re:Oh Jonesy (0)

Anonymous Coward | more than 3 years ago | (#35246908)

Could they get away with calling it "Subscription+" and throwing in a free desktop wallpaper or some other useless perk?

Re:Oh Jonesy (3, Interesting)

node 3 (115640) | more than 3 years ago | (#35247764)

Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive.

Then price your products accordingly. People are willing to pay for iPads because of the convenience - they will pay for iSubscriptions for exactly the same reason.

According to new stories I've read from other sites on the same subject, Apple forbids them from charging more to iOS users than they do through their own web storefront.

All they have to do is have a separate iOS streaming subscription.

$X for streaming to PCs and Android
$X*1.3 for streaming to PCs, Android and iOS

What they *can't* do is offer the same purchase as an in app purchase outside of the app for less than inside. So they can't offer the iOS streaming package for less on their website than they do within their app.

In other words, this is a non-issue.

Re:Oh Jonesy (0)

Anonymous Coward | more than 3 years ago | (#35246808)

Apple will not allow the subscription price on the ipad to be more expensive than the same subscription off of the ipad. So any biz that wants to stay in the app store will have to raise prices across the board. Apple really is pulling the rug from under all these subscription businesses. Apple sees them doing well and said "Mine! Mine! Mine!" When apple does enter the market they will have a built in price advantage.

Re:Oh Jonesy (1)

Jumperalex (185007) | more than 3 years ago | (#35247640)

They only have to raise the price across the iOS board ... nothing says they have to also raise the price across the market board.

Tablets? (0)

Anonymous Coward | more than 3 years ago | (#35246658)

Android tablets aren't going to do shit at their current prices.

If you don't like it, (1)

MikeDirnt69 (1105185) | more than 3 years ago | (#35246694)

don't use it.

Re:If you don't like it, (0)

Anonymous Coward | more than 3 years ago | (#35246760)

And don't forget to tell others not to use it.

Re:If you don't like it, (0)

Anonymous Coward | more than 3 years ago | (#35247496)

That would be nice, but Apple does not allow *any* other way to get apps on their products. You pay for the hardware, then cannot add enhancements or ever software upgrades. They should boldly advertise before hand that if you do not like paying 30% extra buy Android. That would be more honest.

Welcome To The Dark Side (0)

Anonymous Coward | more than 3 years ago | (#35246748)

I guess we're starting to see Apple's true face or rotten core... Banksy please depict that.

Re:Welcome To The Dark Side (1)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#35246880)

Has Apple ever been about anything other than elegantly polished control(with the possible exceptions of the early Woz years, and the Scully period where they were too busy sucking to be about anything...)?

The only real change is that they now have the power, and the crypto, to bring to fruition the exact same principles that have motivated them for years.

strongly disappointed in Apple (0)

Anonymous Coward | more than 3 years ago | (#35246842)

I am a long-time Apple user. However, I am also a huge music fan and I am listening to Last.fm on an iPhone right now. If Last.fm discontinues the app because of the new policy, Apple will have created another Android owner.

Re:strongly disappointed in Apple (1)

CheerfulMacFanboy (1900788) | more than 3 years ago | (#35246992)

I am a long-time Apple user. However, I am also a huge music fan and I am listening to Last.fm on an iPhone right now. If Last.fm discontinues the app because of the new policy, Apple will have created another Android owner.

So last.fm will force you to remove the app from your iPhone, or make their service incompatible with it? And that's Apple's fault? They aren't remotely asking for something like that.

Re:strongly disappointed in Apple (1)

jdgeorge (18767) | more than 3 years ago | (#35247260)

Sounds as if the AC considered the Last.fm service more valuable than the "Apple experience." In other words, if Last.fm leaves the iPhone, so will he. Nothing wrong with that, unless you think the AC is wrong to choose the thing he or she likes.

Re:strongly disappointed in Apple (1)

KhabaLox (1906148) | more than 3 years ago | (#35247492)

So last.fm will force you to remove the app from your iPhone, or make their service incompatible with it? And that's Apple's fault? They aren't remotely asking for something like that.

What? If last.fm can't (or won't) sell their subscription service through the App Store because of the 30%, and that results in people leaving because last.fm is their killer app, then that's a loss for Apple. It doesn't matter where you assign the blame.

But, if it turns out that a user can get the last.fm service on my Android or Windows phone and not on my iPhone, then it's pretty clear where the problem lays.

Re:strongly disappointed in Apple (1)

Jumperalex (185007) | more than 3 years ago | (#35247682)

Damn well straight they are asking for that. If a business attemps to dictates untenable terms (30%) with obvious consequences (cannot competetively operate at a profit) then they are either asking for those consequences or are incompetent. I am not a fan of Apple but I would never accuse them of incompetance. Arrogance yes, but not incompetance.

Easy Fix (2, Interesting)

alvinrod (889928) | more than 3 years ago | (#35246938)

Here's the easy fix. Ditch your app and make a web-based app. Apple has no control over that and it will port more easily to other platforms such as Android, Web OS, WP7, MeeGo, etc. If you're doing it right, you can even make it easy for your users to make a shortcut to your web-app that shows up as though it were an app.

If that's too much work, don't offer subscriptions through the iOS app. Make a free version that throws in commercials every so often. 30% of $0.00 is $0.00.

I think these companies want to complain because 30% cuts into their profits, but I don't know how many will leave because the iOS user base is still worthwhile even at 70%.

As for the anti-competitiveness of it all, is it really a problem? After all, Apple has been losing market share to Android so who really cares if they want to make themselves a much less attractive platform. On the other hand, I can't buy e-books from Apple and have them work on my Kindle so as far as I'm concerned it's not a good argument for Amazon. If nothing else, hopefully these spats will help drive DRM-free ebooks.

Re:Easy Fix (2)

CheerfulMacFanboy (1900788) | more than 3 years ago | (#35247040)

Here's the easy fix. Ditch your app and make a web-based app.

Yeah, do what Apple said you should do when they introduced the iPhone, which was said to be really dumb at the time.

Re:Easy Fix (1)

painandgreed (692585) | more than 3 years ago | (#35247248)

Which, BTW, is how Apple wanted people to do things in the first place. People screamed and wanted apps and a store, so they got that too.

Re:Easy Fix (3, Informative)

jpmorgan (517966) | more than 3 years ago | (#35247474)

No, just no. If your profit margin is less than 30%, a 30% cut to per subscriber revenue means you're losing money on every customer, before any fixed costs. You can't just "make that up in volume".

If you loose $0.50 on every customer, and you have 1 million customers, you just lost $500,000. If you try to make that up in volume and sign up another 9 million customers, you're now losing $5 million.

Re:Easy Fix (1)

natehoy (1608657) | more than 3 years ago | (#35247726)

So (honest ignorant question) can you leave web-based apps running in the background now? Can you pop over to your email and listen to music on a web page while the music continues to play?

Or would an iPhone become ONLY a music player when running last.fm or any other web site that streams music?

I was under the impression that this was the big difference between "apps" and "web apps". But I only own an iPod Gen 2, so my knowledge is at least two generations out of date.

Apple Stuff (1)

certain death (947081) | more than 3 years ago | (#35246940)

It would be an easy fix. Stop producing software/services for the iXXX devices. The fact that you couldn't get certain software on Macs kept them from catching in the past.

Providers and producers (0)

Anonymous Coward | more than 3 years ago | (#35246972)

If you are a content producer without an online subscription service Apple's deal probably isn't that bad, I've seen some comments on the web that suggest it is similar to what you would get with physical media. Of course Google 10% offer sounds a lot better, and if Apple had picked 10% this wouldn't be news worthy.

The problem is if you are a content provider, you and Apple want the same slice of the pie, and Apple wants a bigger slice than you are already getting.

Apple has been struggling to get a deal with the content providers to do its own streaming/subscription service and hasn't been able to agree terms with the content producers. If Apple can't have this on iProducts then perhaps it doesn't want anyone else to.

What Apple is Doing is Terrible (4, Insightful)

MogNuts (97512) | more than 3 years ago | (#35246986)

I hate that people are already saying "well don't buy it" or "don't use it." Here is the reality of what happens in the REAL world:

a) Company pulls out of the market
b) Company raises their prices, in some form or another, to cover the cost. Consumer loses. Consumer pays more.

The winner? Ding ding! Answer B. That's what happens. So thanks to Apple, instead of paying, what $3 that Last.fm charges, they'll charge more. It could be $5. Or they could raise it to the competitors like Zune which is $10. I wouldn't bat an eye to pay for $3 for music a month. For $10, I might shop around first and potentially they might lose a sale.

And here is an even bigger problem. That cost will be raised for everyone else too. So you got an Android phone because you don't support Apple being an evil company? Too bad. It's $10/mo for Last.fm no matter what.

And wait, it gets worse! It raises the traditional pricing level for that product. It seems everyone is either in the $3/mo tier, $10. But at least you have a choice. But when Last.fm charges $10 because they can't make it at 3 with Apple's blatantly rip-off policies, now the norm will be $10. Thanks Apple! Now you have no choice--everyone pays $120 per year instead of being able to choose one that's $36 per year.

But alas, I'll get flamed and modded down to hell for this. I really think they enjoy the useful things at reasonable prices being ruined and they like to say "thank you sire, may I have another?"

Re:What Apple is Doing is Terrible (1)

Anonymous Coward | more than 3 years ago | (#35247126)

Exactly. Not to mention that Apple entering the same market can steal it away by always pricing 30% lower than the competitors. It is one thing to have had this policy in place from the start, its another to put it in after these companies created the market. It really is dirty play on apple's part.

Re:What Apple is Doing is Terrible (2)

im_thatoneguy (819432) | more than 3 years ago | (#35247172)

In defense of Zune's $10 vs LastFM's $3 Zune gives you 10 free DRM free MP3s per month and you can listen to the music offline.

Re:What Apple is Doing is Terrible (1)

MogNuts (97512) | more than 3 years ago | (#35247294)

That's a pretty good deal. Didn't know about that.

As a side note, I do think Zune Pass is a very good service. I was just throwing it out for illustrative purposes. Though $3/mo for unlimited music streaming is pretty incredible though. I wouldn't want that gone, you know?

Re:What Apple is Doing is Terrible (2)

dwightk (415372) | more than 3 years ago | (#35247378)

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

I missed the part where you showed why they would jump to $10

they'll charge more. It could be $5. Or they could raise it to the competitors like Zune which is $10 ... It seems everyone is either in the $3/mo tier, $10

It seems to be somewhere in there, but I don't think you fully explored that thought.

Re:What Apple is Doing is Terrible (0)

Anonymous Coward | more than 3 years ago | (#35247672)

Hmm now i am con fused 30% of $3 is 0.90 cents. So essentially they need to make up 90 cents.
30% of $4 is $1.20 this still leaves a deficit of 0.20 cents on their overall profit.
They would have to change their price to $4.30 or so across the board to maintain the same amount.

Re:What Apple is Doing is Terrible (1)

VGPowerlord (621254) | more than 3 years ago | (#35247730)

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

To restate what you said:
Conjecture: Last.FM is making it on $3.
Assumption: Last.FM needs to make $3 to break even.
Hypothesis: Raising the price to $4 will more than cover the 30% Apple fee.

So, here's the math:
$4.00 * 30% (or 0.3) = $1.20

$4.00 - $1.20 = $2.80
$2.80 $3.00

So, it looks like your hypothesis was wrong.

This is intentionally ignoring that not all Last.FM customers will be using iOS devices... but unless you what percentage are, any other data is useless.

Re:What Apple is Doing is Terrible (1)

geekoid (135745) | more than 3 years ago | (#35247792)

no, you can't necessarily just raise the price. If you break the price point you loose too many subscribers.

Apple also demands that there price be equal or cheaper then then any price you offer elsewhere. So you need to raise the price to all your customers, not just iPhone users.

Re:What Apple is Doing is Terrible (0)

Anonymous Coward | more than 3 years ago | (#35247454)

The reality is that Apple is in business to maximize value to their shareholders, not create a system that allows consumers to get whatever it is they want as cheap as possible. And I will say it: "Don't buy it". You will buy it, and Apple knows you will buy it, and that is why they can do this.

Re:What Apple is Doing is Terrible (1)

MogNuts (97512) | more than 3 years ago | (#35247638)

Exactly. Which was my point. The jerkoff at the playground is ruining everyone's playground.

That's why we as consumers should just not accept it, complain, not support the company's actions, evangelize to others about the evil policies, not purchase the products, create awareness in the media as to the awful repercussions, ad nauseum.

Re:What Apple is Doing is Terrible (1)

Jumperalex (185007) | more than 3 years ago | (#35247732)

[quote]And here is an even bigger problem. That cost will be raised for everyone else too. So you got an Android phone because you don't support Apple being an evil company? Too bad. It's $10/mo for Last.fm no matter what.[/quote]

Who says? AFAICT the terms only say they have to charge the same price for subscriptions on the iOS regardless of source. Where does it say in the terms that a service has to charge the same price for apps operating on non-Apple devices?

Dead Man Walking (0)

Anonymous Coward | more than 3 years ago | (#35247034)

Steve Jobs is the new Gordon Brown. Dead man walking. Steve Jobs authoritarian management and milking of iTunes is just like Gordon Brown's stubborn refusal to recognise that innovation starts with the people and relying on tax revenue from banks makes for an unbalanced economy. Nobody in Apple has the balls to stand up for him, and the overly expensive hardware and refusal to sell OS X to the masses is just trampling on peoples aspirations. Steve Jobs is making Microsoft look good like Gordon Brown snatched defeat from the jaws of victory by making the Tories look good. Unless Apple get this they're going to drive themselves into the ground just as hard as the Labour party did.

Speaking of music on mobiles (1)

Taedirk (870181) | more than 3 years ago | (#35247064)

It's funny because Last.fm just started charging mobile users.

Not a monopoly. (1)

RightSaidFred99 (874576) | more than 3 years ago | (#35247186)

I hate Apple in general, but this is monopoly crybabyism brought to a whole new level. They don't have close to a monopoly in anything, and the iPad is only a few years old ffs.

If you don't like Apple's policies, don't sell your software for their shitty products. Instead of whining about Apple, I just ignore them.

Re:Not a monopoly. (1)

MogNuts (97512) | more than 3 years ago | (#35247420)

Your employer: "we're reducing your pay by $10,000"

You: "But I'm just barely paying my rent now."

Employer: "Too bad. Deal with it. Besides, you do have that option. Instead of whining, you can quit and go hungry AND we will tarnish your professional reputation."

You: "But that isn't really a choice!"

And then the realization hits you.

A company like Last.fm, or just about any company for that matter, doesn't have the option of not selling its software to a platform that is pretty much the other biggest half of the market and in an explosive growth market in general.

Re:Not a monopoly. (0)

Revotron (1115029) | more than 3 years ago | (#35247646)

I don't see anything illegal in an employer cutting your pay by $10,000. Does it suck? Yes. Is it illegal? No. Just say "Fuck you" and go get a different job. Slandering an employee, on the other hand, is illegal. But other than attempting to inciting needless emotion in your readers, how the hell else does slander factor into this story?

If Last.fm doesn't like Apple's pricing policy, they can get the fuck over it and take their toys to a different sandbox. Because unlike a monopoly, nobody's *forcing* you to use the iPhone and nobody's *forcing* them to provide content through the Apple App Store.

I would love to see more people switch to Android over this policy change. Android needs a broader market base. What I don't love is people bitching about this. It's business, grow a pair and take your money elsewhere.

Predatory Business Practice? (3, Insightful)

l0ungeb0y (442022) | more than 3 years ago | (#35247214)

Charging 30% of the price of the app you developed with XCode and Objective-C both of which were developed by Next then Apple and which is then sold and promoted by the iTunes Music Store is one thing.

Charging 30% of all the money you make offering subscriber content seems exorbitant and could be argued as being a predatory business practice. Personally, I believe many others will see it this way and we will see this matter in court before too long.

In the end however, I think Apple's alienation of low-margin subscriber services such as Last.fm, Rhapsody and others will only make the Android platform stronger.

This is just down right ridiculous. (0)

Desmoden (221564) | more than 3 years ago | (#35247308)

The Music industry for EVER has been one of the most corrupt, evil businesses in the world. The only way to make money as an artist is to tour. Record sale profits are a joke.

Apple "piece" of the pie is nothing compared to what record companies do.

In a few years all the record companies will finally DIE. Artists will create/produce music on their OWN in their HOMEs or at private studios (for a fee). And then sell them DIRECTLY to customers via download servers like iTunes and others. Apple and any other company that hosts and shares this music deserve a piece, say 30% or something. And the rest needs to go to the ARTIST.

The only reason this sucks is because the download company (in the case Apple) and the Artists are fighting over the scraps the Record labels leave on the ground.

Once it's just ARTIST->Digital-Distributer->User this will balance out and start to be somewhat fair.

This Last.fm guy is just bitter that his business plan isn't working.

It's not like Apple locks the music. You can take anything from iTunes and do whatever you want with it. It's YOUR music.

Don't bitch, evolve.

ION: Users Criticise LastFM Over Featureslack (TM) (2)

Barryke (772876) | more than 3 years ago | (#35247430)

In other news: Users Criticise LastFM Over Featureslack (TM).

They have been dropping feature after feature. I payed to use those features thus i unsubscribed.

The problems are.... (5, Informative)

gstrickler (920733) | more than 3 years ago | (#35247550)

There are several flaws with Apple's new subscription model. According to Apple's =press release:

“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,”

In theory, I agree, and so would most publishers. However, Apple's model doesn't operate that way:

  1. Not all purchases made through an application are new subscribers, it may be an existing subscriber who is renewing. As the policy is written, Apple would still take 30%
  2. Apple handles renewals, including automatic renewals for all subscriptions purchased via Apple. This means that Apple actually making the subscriber a customer of Apple, not a subscriber of the content provider. That's true even if it's an existing subscriber who renews via Apple. That is not how existing subscription models work, if you sell a new subscription, you get an one time commission, and all the renewals are handled by the publisher with no additional commission paid.
  3. The publisher is prohibited from providing a link to their own online subscription signup/renewal from within an application they wrote, and the MUST provide a link with all the same subscription options within the app. All those must go through Apple, even if it's for an existing subscriber.
  4. Even though the customer owns the iOS device, the publisher wrote the application, creates the subscriptions, and delivers the content, they are prohibited from making it convenient for customers to deal (or continue to deal) directly with the publisher from within the publisher's own application. In most cases, Apple isn't even hosting the content or providing the bandwidth for delivery. In short, the only way Apple might be involved is that they made (and sold) the iOS device, and is in accepting a payment (and only because of a policy that prohibits the publisher from making it easy for the customer and publisher to do business directly with the publisher). That's not worth 30% by any measure.

The policy as written is completely inconsistent with nearly all existing subscription business models, makes it easy for Apple to "steal" existing subscribers and take 30% of the subscription fees, and makes it more difficult for existing subscribers to subscribe or renew with directly with the publisher. It's completely inconsistent with the stated intent and philosophy. If not corrected, it will dramatically reduce the available of non-iOS specific content services such as Netflix, Pandora, Last.FM, and Rhapsody on the iOS platform. Fix it now Apple.

Re:The problems are.... (2)

gstrickler (920733) | more than 3 years ago | (#35247570)

Somehow the link to Apple's press release [apple.com] didn't make it into my post.

Really? (1)

pak9rabid (1011935) | more than 3 years ago | (#35247578)

Apparently not one to mince words, Last.fm founder Richard Jones lambasted Apple for their recently announced App Store subscription rules. 'Apple just ****ed over online music subs for the iPhone,'

Really? Because di.fm sure doesn't seem to have any problem getting my subscription fees. Oh and look...I can even use my subscription service on my phone via the di.fm iPhone app.

Charge more for a "iOS compatible" subscription (1)

drtsystems (775462) | more than 3 years ago | (#35247666)

I think this is how the problem will be resolved. You can get the same subscription you always got on the website but it is not compatible with iOS devices. You can buy, for 30% more a subscription that is compatible with iOS (and of course that 30% goes right to apple). That way you are still charging the same on your website as you are using Apple's subscription service, because the product is "iOS compatible subscription."

In any case, this is horrible for iPhone users. Either companies pull out of iOS or they charge 30% more. Clearly these start-up music streaming services don't have the kind of profit margins to give away 30% to apple. 5-10% I can see (considering Apple is footing the bill for App download bandwidth, store space, etc.). But 30%? Thats insane.

Boycott (0)

guspasho (941623) | more than 3 years ago | (#35247700)

As a consumer, either way I'm screwed because I have to pay for streaming now. So I say fuck it all, I'll just download everything I want to listen to and instead spend my money on shows when my favorite bands come to town. Most artists make most of their money touring anyway, don't they? Support the artists, not the industry.

IF Apple (1)

geekoid (135745) | more than 3 years ago | (#35247704)

charges a fee to music services that it doesn't pay for it's own music service, they will face Anti-Trust.

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