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Spotify, just like pretty much any other app, is at war with the way Apple conducted its App Store. Along with taking 30% of every transaction made, Apple also hinders how Spotify can promote its products. However, thanks to strict EU regulations, Spotify may be able to allow in-app purchases on iOS.
Right now, if you want to make purchases through Spotify or upgrade your plan, you have to go through the website. You can’t do it easily in the app. If Spotify lets you sign up for premium in the app, then it will be missing out on 30% of its revenue. As you can imagine, the company does not like this.
The main issue is that getting people to navigate to a different platform just to make a purchase can be tough. Not many people are willing to go to their browser just to purchase an audiobook or upgrade their plan. This is something that is definitely impacting Spotify’s income.
Spotify could possibly allow in-app purchases thanks to strict EU laws
While Spotify has been dealing with this, there might be a change in the winds, at least for the European market. Last year, the EU brought the Digital Market Act (DMA), and this has been causing major companies to change the way they conduct business.
If Apple is forced to release its restrictions on the App Store, then this could mean that Spotify may be able to offer in-app purchases free of the heavy fee. Spotify explained that thanks to the EU law, the music streaming service may have some significant changes. In an X post from the Spotify News account, we saw a mock-up video of how things could look.
You’re about to experience a new Spotify if you live in the EU. One where you can see all subscription pricing, promotions or deals, and even make purchases, all seamlessly within the app. Find out what this means for you: https://t.co/j1hYRC3S5c pic.twitter.com/p1GDY6PNdd
Advertisement— Spotify News (@SpotifyNews) January 24, 2024
The video basically just shows how it would look if you were to purchase an item within the app. It’s nothing too special, but it shows that it’s much easier to make purchases through that than to navigate to a separate browser page.
How this could help Spotify
Right now, companies are all looking for more ways to make revenue, and Spotify is no different. Right now, it makes money from subscriptions and ads among other things. However, allowing in-app purchases will open new avenues for the company to make more money.
There’s always the possibility of selling merchandise or further monetizing podcasts. Also, making it easier to upgrade would mean that there’s always the chance that Spotify will see an influx of subscription upgrades. So, Spotify is definitely hoping to enable in-app purchases.
We’re not sure if this will affect everyone
Unfortunately for Spotify, these rules only apply to European countries. The European market makes up the majority of Spotify’s Premium sign-ups, so that’s good for the company, at least. However, things could be different for the rest of the world.
This isn’t particularly new, as other companies have rules and regulations specifically for the European market as opposed to other markets. In Europe, TikTok has a chronological feed, and Meta Verified is getting an ad-free tier in Europe.
At this point, this is not set in stone. There’s no telling if Apple will be forced to relax its App Store rules due to the act. So we’ll want to keep an eye out on the story as more developments rise.