Spotify Mobile App Monetization Opens with Restrictions

Spotify today relaxed some restrictions it placed on developers who use the Spotify iOS SDK and Spotify Android SDK. The result of the looser rules is that some third-party apps with Spotify built in can now make some money through the iTunes App Store or the Google Play Store. There's a pretty big catch, though. Here's the scoop. 

Spotify has allowed developers to add certain Spotify functions to their own apps since earlier this year. It released the current SDK in March. Until today, however, developers were not allowed to monetize these apps in any way. Now they can. 

According to Spotify, this means developers can "sell the app directly, sell access to it, and sell advertising, sponsorships or promotions in the mobile app on on its web site." This applies only to non-streaming mobile apps, and the apps in question must meet its terms of use. If your app streams music, then the story is a bit different. Developers can list and distribute their music-streaming apps, but they aren't allowed to monetize them in any way. That means no fees, no adds, no sponsorships and no promotions. (Sort of negates the point a bit, doesn't it?)

Spotify's reasons are understandable. It sees any music-streaming app as competition. It would rather Spotify itself be the app consumers use to stream music to mobile devices. The bottom line here is that you can now make money off your Spotify-enabled app as long as it doesn't actually play any music. 

Spotify warns that both the Spotify iOS SDK and Spotify Android SDK are in beta status. The company notes there are several remaining bugs that it is trying to stomp out, but it is close to having stable versions available. Once all the bugs are resolved, the SDKs will be updated to full 1.0 status. For the time being, Spotify has not added any features to the SDKs, nor spelled out any specific capabilities. 

Spotify competitor Pandora leads the music streaming space in the U.S. by a wide margin. Earlier this year, it held a commanding 31% of the market, while iHeartRadio and iTunes Radio trailed with 9% and 8%, respectively. Spotify landed in fourth place with 6%, followed by Google Play All Access with 3%. Globally, however, Spotify has a commanding lead. It is available in 57 countries and claims 10 million paying monthly customers. The next closest competitor, Deezer, claims half as many monthly users. In other words, if your Spotify-enabled app has global appeal, now is the time to get it in the app store. 

Eric Zeman I am a journalist who covers the mobile telecommunications industry. I freelance for ProgrammableWeb and other online properties.

Comments