Seven years ago, Spotify closed the ability for new customers to pay for a premium subscription through the built-in Apple App Store payment system. Now the service has completely abandoned this payment method. Recently, Spotify sent emails to premium subscribers who have previously paid for the service through the App Store, informing them to resubscribe to the service after the end of the current billing period. To do this, you need to use another payment method, such as PayPal or a credit card.
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An email from Spotify says: “We are writing to you because you used Apple’s payment service when you subscribed to Spotify Premium. Unfortunately, we no longer accept this payment method.” Subscribers are informed that their account will be automatically upgraded to a free service with ads after the end of the paid subscription period. “If you want to keep your premium subscription, you will need to resubscribe after the end of the last billing period and transfer your account to a free account.”
Presumably, only a small number of Spotify Premium subscribers continue to use this payment method. A spokesperson for Spotify confirmed that the company has begun notifying “a small number of users that the legacy payment method associated with their premium account is no longer valid.” According to the spokesperson, these actions will help “ensure that [Spotify] can continue to provide all its users with the best subscription.”
Spotify stopped accepting premium subscriptions through the App Store in 2016 to avoid Apple’s up to 30% fee, nearly two years after the streaming service implemented the payment system on its platform. Customers subscribing through the App Store were charged an additional $3 per month to ensure that the App Store fee would not detract from Spotify’s revenue.
In 2019, Spotify filed an antitrust complaint against Apple in the EU, alleging that the App Store’s policies hurt competition. This is not the first time that the popular music service Spotify has accused Apple of anti-competitive behavior and exploiting its dominant market position. The streaming service has also expressed dissatisfaction with a similar fee for the Google Play app store, but last year Spotify and Google announced a pilot program giving Spotify customers the choice of whether to pay for a premium subscription through Google’s payment system or Spotify’s. Google still charges a fee for these purchases, but said it’s reduced by 4% from the standard rate.
The update to App Store payment methods is unlikely to impact most existing Spotify customers. In 2019, Apple revealed that it had accepted payments from 680,000 Spotify subscribers, less than 1% of Spotify’s 100 million premium subscribers at the time. The popular music service has already surpassed 200 million premium subscribers, according to Spotify’s Q4 2022 earnings report. Spotify’s monthly active users grew to 515 million in the first quarter of 2023, according to Refinitiv’s IBES data. We can expect further growth in paid Spotify users when the company launches a new premium plan with high-quality audio.
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