Over the past couple of years, the relationship between Stockholm-based Spotify and Cupertino-based Apple has devolved from “competitive” to “rivalrous” to “full-on beef.” The two companies’ streaming services are now the biggest on-demand subscription music platforms in the world, with 39 million and 15 million paying customers, respectively. Their battle has all the necessary elements of a quality modern beef: passive-aggressive tweets, threats of legal action, and thinly veiled potshots delivered via the press (Tidal is also in the fray, but it’s more like the overeager little brother waiting to get punched in the face).
In the rivalry’s most recent salvo, Spotify was accused of retaliating against artists who sign up for Apple Music exclusives by making those artists’ music harder to find. Though Spotify denies some of the charges, there’s no arguing that the world of streaming is getting more cutthroat by the day. Let’s try to recap the winding road that brought us to this point.
Spotify Mobile Debuts (September 2009)
While Spotify was founded in 2006, it didn’t arrive on Apple’s iPhone until 2009. Even back then, it was obvious that the two companies were on a collision course. By allowing customers to stream millions of songs from the cloud, Spotify gravely threatened the viability of Apple’s iTunes Store, which controlled 70 percent of the digital music sales at the time. But it would take Apple several more years to figure out how to properly combat the startup.
Apple Buys Beats (May 2014)
After some middling efforts to compete in the streaming space (remember Lala? What about iTunes Radio?), Apple finally got serious with the acquisition of Beats Music and Beats Electronics for $3 billion. Here’s a quick rundown of what Apple got out of the deal, ranked in order of importance:
- Access to industry veterans like Jimmy Iovine, Dr. Dre, and Trent Reznor, who could help Apple woo today’s stars into offering up their latest albums as Apple exclusives
- A functional streaming platform (Beats Music) with a heavy emphasis on human-curated playlists
- Overpriced headphones
- 250,000 paying subscribers to Beats Music
The Beats buy was Apple’s declaration that it would not cede its position as the most important company in digital music without a fight.
Apple Music Launches (June 2015)
The best thing about the unveiling of Apple Music at last year’s Worldwide Developers Conference was Drake’s vintage Apple jacket. The second-best thing was Spotify CEO Daniel Ek’s shady tweet once he saw Apple’s service: “Oh ok.” (Yes, Ek used a period in the actual tweet.) The third-best thing were these pictures of Drake and Apple executive Eddy Cue high-fiving/devising a secret handshake/gently caressing each other’s fingertips. The actual Apple Music product was the fourth-best thing, I guess.
Taylor Swift Sides With Apple Because of Course She Would (June 2015)
Just a few days after she was allegedly up in arms about the way Apple compensates artists, known liar Taylor Swift announced that she would stream her hit album 1989 exclusively on Apple Music because it “felt right” in her gut. Later in the year, Taylor’s selfless gut told her to appear in Apple Music ads and cut a deal to exclusively stream her tour movie on the service.
This all happened mere months after Swift removed all of her music from Spotify, citing her disapproval of the service’s free tier (Daniel Ek’s response was much longer than “Oh ok.”). Swift’s 1989 move essentially kicked off the Streaming Wars and helped put us on the road to the frustrating, balkanized landscape of modern digital music. Thanks, Tay.
Spotify Threatens to Lawyer Up (June 2016)
This summer the two companies’ lawyers got embroiled in a heated argument after an update to Spotify’s app was rejected from the App Store. Apple claims that Spotify was trying to get around its subscription system, which requires third parties to give Apple a 30 percent cut of subscription fees paid through the app and bans developers from asking app users to visit an independent website to sign up for a service, where Apple’s fee wouldn’t apply. Spotify says Apple is using the App Store approval process “as a weapon to harm competitors” and wants regulators to investigate the company’s practices. So far no U.S. agencies have opened a formal investigation into the matter.
Apple Plots to Make Spotify Pay Higher Royalties (July 2016)
In the long term, Apple’s greatest advantage over Spotify is money. The tech giant made $53 billion in profit last year, while Spotify lost around $190 million. Apple has more than $230 billion in cash and marketable securities waiting to be spent, while Spotify reportedly raised $1 billion in convertible debt in March to shore up its ongoing losses. Apple could at any point use its profits from a single quarter to buy Spotify, which has a valuation of $8.5 billion. In short, the titanic Streaming Wars are a desperate fight for survival for Spotify and a rounding error for Apple.
And yet, Apple is still being petty as hell about the whole thing. In July, the company submitted a proposal to the Copyright Royalty Board, the government body that determines how much streaming services are required to pay songwriters and publishers for their music. Apple wants to simplify the current labyrinthine calculation method by having streaming companies pay 9.1 cents per 100 plays.
Here’s the thing, though: This change wouldn’t even affect Apple, which has worked out private deals with music publishers, according to The New York Times. But the new rate would negatively affect Spotify by forcing it to pay a flat fee every time a song is played on its free tier rather than pay a percentage of revenue. Spotify is currently trying to maintain a careful balancing act of compensating artists adequately while growing into a profitable company that can manage a successful public offering. Apple wants to nudge the service into a slow and agonizing death spiral. This shit’s chess, it ain’t checkers.
Kanye Makes a Plea for Peace (July 2016)
Remember how I said Tidal is the overeager little brother in this fight? Fitting that its de facto spokesman is now Kanye West. “The Tidal Apple beef is fucking up the music game,” Ye tweeted in July. Then he demanded a meeting of the Streaming Illuminati, which includes Jay Z, Jimmy Iovine, Tim Cook, Daniel Ek, and, of course, himself. “Fuck all this dick swinging contest,” he typed despairingly (at least that’s how I assume he typed it).
Spotify Allegedly Strongarms Apple Music Artists (August 2016)
But there can only be war, Kanye. Last week, independent reports in Bloomberg and The New York Times claimed that Spotify is now seeking to punish artists who ink exclusive deals with Apple by promoting their work less prominently when it eventually shows up on Spotify, putting their songs on fewer playlists or downranking them in search results. Spotify has said the claim that it tampers with search results is “unequivocally false,” but hasn’t commented on the other allegations.
The fact that this beef seems poised to reach “Hit ’Em Up” levels of animosity is great for bloggers but not for music fans, who just want a simple listening experience. As a wise Twitter ranter once said, “We all gon be dead in 100 Years. Let the kids have the music.”