Apple Loses Appeal: Music Streamers Cash In On Payment Freedom
By Trevor Loucks
Founder & Lead Developer, DynamoiTrevor Loucks is the founder and lead developer of Dynamoi, where he leads coverage at the convergence of music business strategy and advertising technology. He focuses on applying the latest ad-tech techniques to artist and record label campaigns so they compound downstream music royalty growth. trevorloucks.com
Apple's latest defeat in federal appeals court is reshaping music streaming economics overnight.
The 9th U.S. Circuit Court of Appeals rejected Apple's emergency request to pause a landmark order forcing the iPhone maker to allow external payment links in iOS apps—striking a major blow to the company's $26.65 billion App Store business.
Why it matters:
Music streaming giants can now bypass Apple's 30% commission entirely, potentially saving hundreds of millions annually while offering cheaper subscriptions to consumers.
- Immediate impact: Spotify reports "meaningful uptick" in iOS conversions since implementing external payments.
- Revenue redistribution: Streaming platforms can invest saved commission fees into content and artist payouts.
- Consumer benefits: Multiple payment options and potential subscription discounts outside Apple's ecosystem.
Zoom in:
The ruling stems from U.S. District Judge Yvonne Gonzalez Rogers' April contempt order in the Epic Games case.
The judge found Apple "willfully violated" a 2021 injunction by implementing a punitive 27% commission on external purchases—effectively circumventing the original order through malicious compliance.
Spotify leads the charge
The streaming giant was first to implement the new payment options in May, updating its iOS app to show pricing information and direct links to its website.
"Users appreciate having payment choices, and we're able to offer more competitive pricing without the App Store fee burden," CEO Daniel Ek said during the company's earnings call.
Amazon joins the exodus
Amazon Music has quietly updated its iOS app to include external payment links, following Spotify's playbook.
With Amazon Music generating $4.08 billion in 2024 revenue, even a partial shift away from Apple's payment system could save the company tens of millions annually.
By the numbers:
- Only 34 of 136,000 developers used Apple's restrictive external payment option before the court intervention
- $26.65 billion: Apple's Q1 2025 Services revenue, largely driven by App Store commissions
- 52.5 million: Amazon Music's U.S. user base that can now access direct payment options
- 30%: Maximum Apple commission that streaming services can now completely avoid
What's next:
Expect YouTube Music, Apple Music's main competitors, to quickly implement similar external payment strategies.
Industry analysts predict Apple may counter with reduced commission rates or developer incentives at its June Worldwide Developers Conference.
For now, Apple continues its appeals process while being referred to federal prosecutors for potential criminal contempt—a rarely seen escalation that signals judicial frustration with the tech giant's compliance strategy.
The bottom line:
The music streaming wars just gained a new battleground: payment freedom.
Platforms that aggressively adopt external payments will gain competitive pricing advantages, while Apple's Services revenue faces its biggest structural threat since the App Store's 2008 launch.
