Spotify might be king in the music streaming world, but Apple is all set to challenge it thanks to recent developments. Recent buzz is that Apple and Tidal are in talks with Apple looking to buy over the Tidal music service.
Tidal despite its star-studded spokespersons and music exclusives is struggling to make a profit and trails behind both its rivals as far as subscribers go. Jay-Z initially brought the company over with an intention to sell it off but has found it a struggle to make Tidal successful. Analysts say that it'd be surprising for Apple not to buy the service, seeing how Jay-Z has no other option to sell besides peddling it to Amazon.
All is not well between Spotify and Apple, however. The former accused Apple of blocking the latest version of its app. Apple said it was because Spotify refuses to use Apple's billing for the app, from which Apple takes a 15 per cent cut.
Spotify however, has chosen to cut off Apple by making premium subscription upgrades only available online and not within the app. The company has long encouraged customers to go to the website instead if they wanted to pay subscriptions or upgrade from free to premium. Formerly Apple was charging a 30 per cent cut, only discounting it to 15 per cent recently. That might not be enough of a discount for Spotify seeing how razor thin streaming service margins are in the first place.
If Apple buys Tidal, it might finally get an edge on its rival or at least make up for its current paltry subscriber base. Still, Apple has managed to get some celebrity endorsement from the likes of Taylor Swift who has publicly vilified Spotify for low rates, choosing instead to put her albums on Apple Music.
How long can Spotify continue to hold out on Apple, especially as mobile is a segment it cannot afford to ignore, and in particular, the premium paying Apple subscribers? It might have to hope for the intervention of EU regulators who have long castigated Apple for its monopolistic practices. In the meantime, iPhone users will have to decide if they truly want to keep on using Spotify or make a final switch to Apple Music.