Spotify’s CEO, Daniel Ek, revealed on the latest earnings call that the company is exploring various payment models but faces obstacles due to Apple’s App Store policies.
However, Ek expressed frustration with Apple’s 30% commission on purchases made through its App Store, which hampers Spotify’s ability to introduce new revenue streams. T
his issue is particularly challenging in developed countries, where Spotify’s pricing innovations are restricted due to Apple’s policies.
Apple’s fee model has faced criticism from app developers, leading to legal challenges and discussions of regulatory intervention, such as the Digital Markets Act in the European Union.
Spotify has argued that Apple’s new terms, including a 17% commission and additional fees, are not favorable for the company. Even considering alternatives, such as an ‘Alternative App Store,’ does not resolve the issue, as it could significantly increase customer acquisition costs for Spotify.
Ek highlighted uncertainties regarding the enforcement of the Digital Markets Act and Apple’s new commission structure in the EU. He emphasized that Spotify has the option to reject Apple’s terms but doing so could limit future opportunities for growth and profitability.
The earnings call also revealed positive growth for Spotify, with a significant increase in paying subscribers and monthly active users. Despite this growth, operational losses were attributed to restructuring costs associated with job cuts.
Efficiency remains a priority for Spotify, with plans to continue optimizing operations and focusing on monetization.
Regarding podcasting, Spotify has shifted its strategy away from exclusive deals towards broader distribution and increased ad revenue potential. This approach aims to better align with creators’ interests and maximize audience reach.