Apple Music costs the same - and they allegedly pay more to artists than Spotify.
Does this means Apple Music’s business model is flawed?
It's a common misconception that Apple Music pays out more. Yes, their rates are better, but Spotify generally pays out more in absolute amount because they have more subscribers, and because their free tier kinda skews the average values.
I have thought about this before, and my conclusion is that Apple can afford to pay out more per stream because they don't have a free tier that they need to actively subsidise. I also suspect that because the bulk of their subscriber base use iPhones, this implies they tend to come from more developed countries with higher earning power, so many of them are paying the full $10/month (or whatever the rate is now).
In contrast, Spotify tends to see higher market share in developing countries (ie: countries with higher share of android smartphones), which report lower revenue per user (ie: they earn way less), so they are caught between a rock and a hard place in that they both collect less revenue and pay out more money to labels.
There's also the argument that unlike Spotify, Apple Music doesn't necessarily need to turn a profit ever because (1) Apple has the funds to keep it afloat indefinitely, and (2) Apple Music probably helps sell more hardware like HomePods and AirPods, but I am not really sure how Apple breaks down the earnings and decides whether it's worth it or not. Though I also suspect that simply having the ability to access Apple Music on the vision pro alone (at a time when Spotify isn't available) is worth whatever losses it may be incurring in the short run.
As such, I won't be surprised if in the near future, music streaming becomes an ecosystem feature that is run only by platform owners such as Google, Amazon, Apple and Microsoft, because only these companies have the resources to keep subsidising it indefinitely.
👉🏻 So does Apple deserve a share of everything you buy or subscribe to through Safari on iOS?
It didn't use to work that way, but the answer to your question is "It doesn't matter".
When Epic sued Apple, I warned against this. I predicted that Apple would win the lawsuit, and they would hold up their victory as proof of their unassailable authority over iOS. This would in turn mean that Apple would no further reason to continue making concessions (however small) to developers because the one consequence they were trying to avoid (the lawsuit) is now over and done and the judge all but ruled in Apple's favour. So whatever ambiguity or uncertainty there may have been over how far Apple can legally go with regards to collecting their 30% is gone. The answer is - they are allowed to go all the way, because iOS is their intellectual property.
That Apple is doing the same in the Netherlands (developers who opt to use third party payment options still need to pay Apple 27%) pretty much telegraphed how Apple would react to any attempt by developers to steer users out of the App Store into their own website in a bid to sidestep iTunes and Apple's 30% cut. These legal cases are not standalone, unrelated incidences. They each form a precedence which Apple will then use if and when they need to address the respective lawsuits in the various countries around the world.
I am long past being surprised or shocked by any of this though. As I mentioned before in the other DMA thread, this is who Apple is, and the sooner people accept that, the less shock there will be when decisions like this are made. I won't always get it right in terms of the specifics of how Apple intends to enforce their 30% cut (because amongst other things, I don't have an entire legal team advising me), but in the US at least, the law is pretty much on Apple's side in that Apple retains the right to monetise their IP however they wish, and that much, I can be almost 100% certain when trying to predict how Apple will react to any given scenario.
