According to Politico, the Washington insider pub:
Spotify’s lobbyists have quietly made the rounds in D.C., whispering to lawmakers for months that Apple’s new music offering threatens to stifle its competitors, according to sources familiar with the discussions. The apparent goal has been to raise antitrust suspicions about the iPhone giant, which faced a previous government lawsuit over its pricing of e-books.
The secretive congressional meetings come amid reports that the Federal Trade Commission is looking into Apple’s streaming service, though the agency has declined to say if it’s opened a probe. Still, Spotify’s effort to fan the flames highlights the intensity of the clash between the two companies – and the potential for scrutiny as Apple enters a new, fast-evolving market.
What Politico fails to mention is that Spotify is itself a dominant player in the global music subscription market (50% according to Spotify’s Will Page).
What the Politico tech reporter also failed to mention is that Spotify is conducting a misleading advertising campaign directed at consumers. The only mention is this equally misleading reference:
In another sign of tensions between the two companies, Spotify recently emailed its subscribers to encourage them to cancel Spotify subscriptions they made through the Apple App Store and re-enroll using Spotify’s own website.
It might be good business to inform users of the cheapest subscription plan, though creating discontent in customers is a questionable tactic….The timing of Spotify’s communication, soon after Apple’s launch of a competing on-demand music service, cannot be ignored. It must be particularly galling to Spotify that Apple is potentially luring users to its own service, and taking a portion of Spotify subscription payments. The risk of Spotify’s communication strategy is that subscribers will cancel their Spotify/iTunes subscriptions, as Spotify recommends, and sign up for Apple Music’s three-month trial. The advice here, for what it’s worth, is for Spotify to drop the in-app subscription price to $10, eat the loss, hand the saving to subscribers, and retain its users. Complaining isn’t aggressive business. Pricing is.
Back in Washington, it’s not surprising that Spotify lacks the balls to come right out and say what they’ve been up to now that they’ve been caught:
Jonathan Prince, Spotify’s global head of communications and public policy, declined to detail his company’s contacts with officials in Washington, but characterized them as part of a general effort to keep D.C. informed. [Recent Spotify hire Jonathan Prince is a long-time DC operative dating back to the Clinton administration.]
Mr. Prince also offers free political advice on his Twitter account:
As David Holmes reports in Pando Daily,
If Spotify convinces Washington to act against “unfair” Apple Music, guess who suffers most: Artists….Daniel Ek’s unprofitable, multi-billion dollar music startup, hopes to arouse suspicions that Apple is guilty of anticompetitive behavior designed to squeeze out rival streaming services.
MTP readers will not be surprised to learn that for months Spotify lobbyists have been “quietly” taking meetings on Capitol Hill to sow the seeds of doubt with key legislators like Senator Mike Lee–who seems to have dropped his investigation into Google’s influence peddling at the Federal Trade Commission.
Spotify hired big gun lobbyists who represent everyone from a host of big drug companies, insurance companies, iHeartMedia (Clear Channel) and….Pandora.
And here’s the point–the only reason that Spotify is in a position to jack with Apple–a company that by in large has been a good friend to artists–is because of the licenses they enjoy from artists and record companies, songwriters and music publishers. Spotify are using their now-dominant position in global music subscription services–that they gained because artists gave them a chance to build a business–to attack competitors not in the market place but in Congress like the crony capitalist they have revealed themselves to be.
Artists should understand this–you’re next. The subtext of Spotify’s recent attack on Universal Music Group alleging collusion with Apple suggests what they really want–government mandated licensing under consent decrees like PROs. Remember–you heard it here first.