“Apple, for example, charges apps a percentage of revenue for subscriptions processed through the App Store. Apple Music, meanwhile, will always deliver Apple 100% of the subscription revenue that it receives from subscribers (sans record fees and all that kind of stuff, of course). Apple, too, has a direct integration with its iOS devices and also a huge amount of brand recognition even though Spotify is a massive service.”
Yes, but Apple has an even bigger advantage: they don’t need to make a profit from Apple Music. They make their money selling hardware, and Spotify only has their music streaming activity. This isn’t to say that Apple will lose money on Apple Music, or continue to do so (it’s possible that Apple Music is not yet profitable), but that Apple doesn’t have to worry about its investors getting antsy about profit or loss in what is a small part of their activity. Apple is clearly betting on content being a major profit center, with their focus on creating new video content, but they can well afford to wait this out.
Apple is playing the long game; Spotify only has one game they can play, and that’s profit and loss.