Spotify’s “Family Plan,” a variation of which launched in 2014, as well as its “Student Plan” appear to be driving a significant portion of the company’s growth and improving retention, as the company points to it multiple times in its filing for a direct listing on public markets today.

But that also comes at a cost of decreasing the amount of revenue it actually gets from each premium subscriber. In the filing, Spotify indicates that the fee for a family plan — which costs $14.99 per month — can be actualized over as many as six accounts total (though it might not always be six). The premium user consists of the one master premium account, which pays for the subscription, and up to five sub-accounts for family members. Spotify is also pointing to its student plan, which costs $4.99 a month, as another contributing factor to those pressures. This means that even though Spotify is gathering more premium users, the actual revenue it generates from those users can drop over time.

And, indeed, that’s what’s happening, according to the filing. Spotify said its premium average revenue per user was around €5.24 in 2017, compared to €6.00 in 2016 and €7.06 in 2015. Spotify recognizes in the filing (“Family Plan” is mentioned nearly three dozen times) that this is partly due to the family plan. But at the same time, churn — a significant metric for subscription services that shows how many users are coming and going — is dropping each year and the number of hours users are listening are significantly increasing. Churn was 7.5 percent in 2015, and it’s down to 5.1 percent in 2017; content hours have more than doubled in that time, from 5.4 billion hours to 11.4 billion hours.

Here’s the boilerplate from the filing:

The rate of net growth in Premium Subscribers also is affected by our ability to retain our existing Premium Subscribers and the mix of subscription pricing plans. We have increased retention over time, as new features and functionality have led to increased User engagement and satisfaction. From a product perspective, while the launches of our Family Plan and our Student Plan have decreased Premium ARPU (as further described below) due to the lower price points per Premium Subscriber for these Premium pricing plans, each of these Plans has helped improve retention across the Premium Service. As a result, while Premium ARPU declined by 9% from 2015 to 2016 and 14% from 2016 to 2017, in part due to the launch of the Family Plan in 2016, Premium Churn declined by 1.1% from 7.7% in 2015 to 6.6% in 2016 and declined by an additional 1.1% from 6.6% in 2016 to 5.5% in 2017. With the growth in higher retention products, such as our Family Plan and Student Plan, we believe these trends will continue in the future.

All this is more or less part of a long game for Spotify, which is looking to go public in the U.S. amid significant and increasing competition for premium subscribers from companies like Apple or Google. Those two companies also own the App Store platform and therefore could be the decision-makers in the economics of operating on mobile devices, which means there’s pressure for Spotify to snap up as many users as possible — even if it means making less money per user. Spotify has acknowledged in its public filing, too, that Apple and Google represent a significant risk in this sense.

Because there are so many apps available on the iOS App Store, it can be hard to find new content, and it’s also easy to overlook great older apps. Our app lists are designed to include apps — both new and old — that we personally recommend and have used over the course of the month.

• Hooked (Free) – Hooked is actually a book app that offers up short stories in a unique format — chat messages. Hooked stories are all presented as text message conversations, so it’s a little bit like you’re reading someone else’s chat history. With Hooked, you can read little bits at a time in moments when you have a free minute or two, and the stories are always engaging. Hooked is free to download with a free trial period, but unlimited access costs $14.99 per month.
• App in the Air (Free) – Whether you’re a frequent or infrequent traveler, App in the Air is a useful app that serves up details like real time flight status, airport maps, security wait times, walk time to your gate, airline point tracking, and more. It works with more than 1,000 airlines around the world, and key information like gate changes and updates to flight status are delivered via SMS. The app is free, but there are premium features like real-time flight status updates that require a subscription, which is priced at $34.99 per year.
• Timepage (Free) – Timepage is a calendar app from Moleskine, the company that makes those handy notebooks. Timepage combines data like events, maps, contacts, weather and more into a simple interface that’s easy to parse at a glance. There are monthly, weekly, and daily views, along with a heat map that lets you know when you’re busiest. Timepage is a free download, but only on a trial basis. A monthly subscription is priced at $1.99, or you can pay $11.99 for the year.
• Confide (Free) – Confide is a private and secure messaging app that’s a great way to communicate with people when you want to keep your messages entirely private. Messages sent through Confide use end-to-end encryption and disappear after a set period of time, plus there’s screenshot protection so no one can snap an image of what you’ve written. Confide is a free download, but access to features like unlimited attachments and themes requires Confide Plus, priced at $29.99 for three months or $59.99 for a year.
• Alto’s Odyssey ($4.99) – Alto’s Odyssey is the highly-anticipated sequel to popular 2015 game Alto’s Adventure. Like the original, Alto’s Odyssey is an endless runner with gorgeous graphics, but this time it takes place in the sand instead of the snow.

If you’re looking for great Mac apps that are worth downloading, make sure to check out our February list of essential apps for the Mac. And if you have favorite iOS apps, make sure to share them with us — we’ll be highlighting interesting, useful iOS apps on a monthly basis.

Spotify just filed for a direct listing in the U.S., sidestepping the traditional IPO process, and now we’re starting to see some of the true financial guts of the company — and some of the significant risks it faces from challenging services from Apple and Google.

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. Spotify says it has 159 million monthly active users and 71 million premium subscribers, while Apple has 36 million paying subscribers as of February 2018.

Here’s the full boilerplate from the filing:

Our current and future competitors may have higher brand recognition, more established relationships with music and other content licensors and mobile device manufacturers, greater financial, technical, and other resources, more sophisticated technologies, and/or more experience in the markets in which we compete.

In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. As the market for on-demand music on the internet and mobile and connected devices increases, new competitors, business models, and solutions are likely to emerge.

Apple has finally agreed to open a new Chinese data center next month to comply with the country’s latest controversial data protection law.

Apple will now move the cryptographic keys of its Chinese iCloud users in data centers run by a state-owned company called Cloud Big Data Industrial Development Co, despite concerns from human rights activists.

In 2017, China passed a Cybersecurity Law that requires “critical information infrastructure operators” to store Chinese users’ data within the country’s borders, which likely forced Apple to partner with the new Chinese data center.

And the icing on the cake is that Chinese government already has legislation called National Security Law, passed in 2015, which gives police the authority to demand companies help them bypass encryption or other security tools to access personal data.

This is the first time when Apple is going to store encryption keys required to unlock iCloud accounts of its users outside the United States.

In theory, Chinese law enforcement agencies won’t have to ask US courts for compelling Apple to give them access to the Chinese users’ data.

Instead, they’ll simply use their legal system to demand access to cryptographic keys required to unlock iCloud accounts stored within their nation, making it far easier to access users’ data, such as messages, emails, and photos.

However, Apple has said the company alone would have access to the iCloud encryption keys and that Chinese authorities will have no backdoor into its data troves.

Apple said the company had not given any of its customers account information to Chinese authorities despite receiving 176 requests from 2013 to 2017, Reuters reported, though all requests were made before the new cybersecurity laws took effect.

If Apple thinks it would comply with one law, i.e., storing users data in China, but could stand without complying with other stringent Chinese regulations, then the company should reconsider its decision.

The company has severely been implementing various aspects of Chinese laws in recent months for its regional operations in the most populated country.

Last year, Apple controversially removed VPN apps from its official App Store in China to comply with Chinese cyberspace regulations, making it harder for internet users to bypass its Great Firewall.

Earlier last year, Apple removed the New York Times (NYT) app from its Chinese App Store because the app was in “violation of local regulations.”

In Apple’s new interview with Stacy Spikes and Hamet Watt — the pair of entrepreneurs who founded MoviePass seven years ago — the conversation eventually focuses on where the idea for MoviePass emerged. According to Spikes, the kernel of the idea that would become MoviePass originated from art-house theaters in New York City that let customers see unlimited movies for a flat donation fee.

He tried to install a similar model for his own Urbanworld Film Festival in the late 1990s, but admitted it was “too early,” and that iPhones, apps, and the advances in development that emerged from this technology were all needed to address the technical roadblocks of such a service.

“The idea was almost too early,” says Spikes. “We didn’t have iPhones and apps to figure out payment and interfacing. If it weren’t for that development, MoviePass would never have happened.”

MoviePass works through the use of both the iPhone app and a paired debit card that is sent to subscribers through the mail after they sign up. If you want to see a movie, you travel to your local theater (MoviePass is supported at over 90 percent of theaters nationwide), select a 2D showtime, “check in,” and at that time MoviePass transfers the exact cost of the showing to your MoviePass card. Then you can buy a ticket at the box office or a kiosk like any normal ticket purchase.

Although the service is growing, many reports in the months following its August price drop have questioned how long the company can keep up the $9.95/month subscription fee (currently $7.95/month paid annually), as well as its public conflict with theater chain AMC. What MoviePass lacks in profit it hopes to make up for in accrued user data, selling a majority stake of itself to data company Helios and Matheson Analytics, which sees “big potential in the type of information it can glean from MoviePass members,” with “no plans to sell user data to outside parties.”

As of January 2018, MoviePass had 1.5 million subscribers. According to CEO Mitch Lowe, MoviePass will hit three million subscribers by the end of April, and turn a profit once four million subscribers sign up for the service.

MoviePass updated its iOS app [Direct Link] to support the iPhone X this month, providing a revamped user interface with more emphasis on images from popular films, better navigation, and an updated screen for the check in process. If you want to read the full interview with the creators of MoviePass, you can find the discussion with Stacy Spikes and Hamet Watt at the top of the Today tab on the iOS 11 App Store on iPhone or iPad.