Especially when Apple Music is $10 per month, Spotify needs to more or less match that price. The problem is if Apple takes 30% and Spotify pays out 70% (old info, maybe this has changed) to labels, Spotify is left with $0. It drops to 15% after the first year, but that's still not good compared to the 3% major credit card processors charge.
Regulators won’t see it like that because you didn’t factor in opportunity cost.
If Apple takes one of Spotify’s customers then not only do they lose out on the 30% but they’ve just taken on the burden of providing the actual service to the customer. So Apple not only has to make a profit but make more profit than the 30% would have gotten them. And music streaming is a competitive business.
Do you never think how Kroger brand products don’t run into the same issue?
