The BIG Question: Will Pandora Bite The Hand That Feeds? (i.e. Apple) – Or Will It Remain Silent?
Rhapsody is angry with Apple. Rdio, Last.fm, and Deezer are pissed off. MOG is upset too.
Just about every executive has spoken out against the dreaded “Apple Tax” on in-app subscriptions. Slacker is silent. And so far, Pandora has been quiet too. Yet, they’re also the most reliant of all the services on Apple.
90% of the reason why Pandora remains so ubiquitous is because being in the App Store drives millions of new users to their service. This puts them in a slightly different position than rival services. Apple boosted Pandora's profile.
Without Apple, they wouldn’t be whistling about a $100 million IPO.
And according to the New York Post, Pandora’s IPO may be delayed until the “Apple Tax” situation is settled. Pandora may primarily be used as a free service, but Apple taking a 30% cut of in-app subscribers still hurts. Who wants to invest in a stock that is guaranteed to bleed as it grows? No one. At present, Founder Tim Westergren views subscriptions as donations – as users dropping money in the bucket simply because they love the service. But once an IPO happens, subs may become a more important part of their business and similar to what other executives have expressed, we know Pandora can’t afford to lose 30% to Apple.
Will Westergren bite the hand that feeds? (i.e. Apple) Or will he remain silent?
That’s the big question now. It’s one thing for MOG CEO Dave Hayman to say that Apple should stay out of his cookie jar. After all, he’s spent years building MOG, and invested millions into it. Pandora, on the other hand, has Apple to thank for the fact that it even has a cookie jar at all. That's the difference here.
It’s still up in the air whether or not Apple will impose its “Tax” on music services.
But the likelihood of Apple backing down appears small. There’s too much for them to gain. Time will tell if Pandora goes NIN on Jobs. Apple might be the hand that feeds… but that doesn’t mean Westergren won’t still chew until it bleeds.
Then again, Pandora might snuggle Apple too. We'll see.
What I don’t understand is what’s stopping Apple from taking 30% of sales from musicians who happen to use their credit card apps from iTunes to sell their own CDs and merchandise at shows and such? I mean taking a percent of the sale of an app sold through your service is fine because the entire reason you have the service is to offer and supply apps to users. I understand that iTunes ALSO provides a service of selling music, but that’s a seperate thing. If they get away with taking a percentage from a service or product a company’s app offers, then where WILL they drawn the line? This would entitle them to do the same with ANY service or product a company provides through an app! This is such a shady and underhanded thing to do.
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