Is Apple about to throttle rivals with a payments play?

Apple payments
Image credit: Mario Lisovski /

Apple may come across as cool, trendy and really rather nice but in reality it is big and it is ruthless. It also has a reputation of playing a good waiting game and then sweeping away the competition.

Spotify, for one, is feeling the pinch. Apple Music is making enormous inroads into that market and causing Spotify to take drastic action that is quite annoying to its customers.

Recently a friend of Disruptive Asia illustrated the point. He had a Spotify account and his wife started using it, occasionally at first, then more and more frequently. The problem was that when his wife hit the button our friend would find himself in a suddenly silent world looking at a message that said Spotify was now playing on his wife’s device.

The answer was to upgrade to a Premium account. Except he realised that he has originally bought the Spotify subscription through iTunes. And now Spotify would only allow him to ‘upgrade’ if he did so direct to avoid Apple getting its hands on his subscription. He still hasn’t done it because he does not know whether he will be able to keep his playlists and preferences.

The subscription business is where Apple is focusing, according to almost everyone you ask. Handsets – and iPhones in particular – are suffering from flat sales and the most likely approach is to ‘do an iTunes’ on the movie market. And Apple being cool and windswept, Hollywood loves the idea.

Amidst all the glamour and glitz, the company is also rumoured to be launching a credit card, backed by Goldman Sachs, ‘in order to bolster Apple Pay’.

So if you are one of the 900 million people that Apple calls friends you can expect it to be very easy to access movies from a wide range of studios (and of course the sound tracks).

If you are not one of Apple’s friends and are trying to make a living out of selling content, like Spotify and Netflix (Apple has already pointed out to Hollywood that Netflix has a mere 139 million subscribers) then you are in for a tough time.

It is far from surprising that Spotify are trying to disengage customers from the Apple payments vice but they – and others – are going to have to come up with something really good if they want to survive and thrive. It will also be interesting, if not fascinating, to see what other players do, particularly AT&T with Time Warner (they are probably too busy telling anyone who will listen that a subscription to a faster mobile network is worth $70 a month).

What is sad, if you are a telecoms company, is that carrier billing works so well for this exact scenario. Three Denmark is convinced of this, as a way of managing all those fiddly little subscriptions we all have but Apple has got there first and is laughing all the way to the bank.


1 Comment

  1. Spotify and Apple have a crucial weakness in what they are doing. For new bands, the amount that they can hope to get from either service is insignificant. It will not finance the growth of such new bands in the way that CD sales do or did. Hence there is an opportunity for someone else to fix the broken way that music is currently sold. Musicians are itching to find alternatives to Spotify and Apple Music and, if you can find a way for them, they will switch. Then Spotify and Apple will simply be left with manufactured hits and an aging back catalog.

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