Apple Buying Tidal, Blocking Spotify?
- Friday, July 1st, 2016
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Apple is reportedly in talks to acquire Tidal, the music streaming service launched last March by rapper Jay Z.
Tidals userbase is smaller than Apples own Music service – with 3m and 13m subscribers respectively – but, according to the Wall Street Journal, Apple is interested in the services relationships with artists like Kanye West, Beyoncé. Both have released albums which were initially only available to stream through Tidal, giving the service an all-important USP in a crowded market.
If a deal does go ahead, it wouldnt be the first rapper-founded music streaming service bought by Apple. Apple Music was built off the back of its $3bn acquisition of Beats in 2014.
These rumours are particularly interesting, though, in light of another story involving Apple and music streaming: Spotify accusing Apple of anti-competitive practices after an update to its iOS app was blocked.
According to a letter sent by Spotify lawyer Horacio Gutierrez to Apple earlier this week, and obtained by Recode, Apple rejected the update citing business model rules. Spotify had been advertising a promotion in-app that encouraged users to sign up for subscriptions on its own site, in order to receive a steep discount, but Apple claimed that Spotify had to use the App Stores billing system – of which Apple gets a 30 per cent cut – for any customers acquired through the app.
The blocked update seemingly would have removed the option to pay for subscriptions through the Apples payment platform entirely.
According to the letter, Apples behaviour is “causing grave harm to Spotify and its customers”. Its worth noting that, with 30m paying subscribers, Spotify has a clear lead on user numbers, even if the Tidal deal does go ahead and its subscribers get rolled into Apple Musics.
Nevertheless, Gutierrez presents the move as an attempt by Apple to minimise this lead, and bolster its own position in the music streaming market.
“It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music,” reads the letter. “We cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors.”