There are 2 models of subscription content we are dealing with here. On one side, we have the Amazon Kindle, where Apple only hosts the Kindle App - and the books themselves are just PDF files hosted by Amazon. I think Apple's new quidelines are a stretch when it comes to the Kindle books - because really, all Apple is doing is providing a platform for the Kindle App.
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
A monopoly is when there is a single entity that has a majority share of a market to the degree that its actions can influence how that market behaves.
Antitrust is when an entity has taken advantage of a situation to promote anti-competitive behavior.
Very good! Now how does that apply to this situation?
What I'm hearing here is that investors are very worried, as they should be.
There is no way this model is going to survive anti-trust laws.
Apple is starting with 30% knowing full well it's just a number to begin negotiations with.
The anti-competitive policies of not allowing people to have a link to their website etc... are also just there as bargaining chips for the inevitable class action law suit.
The real question is - how desirable is an iDevice that has no content? Because as smart as some people here think they are with all their 'business smarts and clairvoyance'... they always leave out the human factor.
Remember that? The human factor... it's why the Macintosh went from 80% market share to 1.2% in less then a decade.
Make no mistake, Apple is repeating history. iPad will be less then 5% market share in 3 years. I guarantee it (if they stay on this course).
Nobody wants to be on a platform with no content.
Bull. You are able to have a link to a website and allow purchasing that way. But then, of course, you pick up all the charges for bandwidth and storage, right? No problem for Amazon, for whom the expenses are baked into the price. And what's the cut that Amazon takes? Why, it was LARGER than 30%, but now with all the competition, it might be (only) 30%. If a book or newspaper is sold, how much goes to the bookstore? Hmm?
When you click inside the app and start downloading, then the bandwidth you're using comes from Apple. Are they expected to pick up all your charges and charge you nothing?
I don't see a problem with antitrust at all here. Otherwise, Amazon and other companies have the same "issues."
Again: if you download your subscription from an external website, there is a charge. It goes to the other seller, who gives *a portion* of the price to the newspaper or book publisher, according to the deal. (Think the subscription offers come from the magazine? No, they come from fulfillment houses who take a big whack out of your subscription.) You can still do this with the subscription managed outside of Apple. But Apple obliges you to make the same offer in the app, using the APIs they announced today, for the same price or less (not more). And when the sub is bought that way, Apple gets the cut, not Amazon or whatever company is involved.
False, Apple hosts the free app. So Apple's cut has been 30% of 0.
Now Apple's cut is 30% of in-app subscription purchases which seems fair given you can still buy the subscription outside the app.
For books both the Kindle and Nook apps are free and direct competitors with iBooks. Amazon has or had a no-lower-price policy as well. But they aren't subscriptions anyway.
In that case Apple should charge end users (or publishers, if publishers opt to keep end users' cost at zero) for every downloaded copy of application, as application is the one that gets "exposure" on App Store and is hosted by Apple.
What visibility Apple is providing? Are they advertising Amazon, Sony... books on iTunes? They are hardly advertising readers apps - all I have downloaded, I have read about somewhere else.
Oh no, that's not true! Apple shows these apps in their tv commercials. Developers say that it results in big sales.
In addition, just go to iTunes and the App store. You'll see featured apps, favorites and such. This also results in bigger sales.
Even in their paper Ads, you can see the names of the apps in the pictures. People buy these apps. As Apple rotates them, sales move around.
I am amazed sometimes how people who have not been involved at all about the process of creating any product, including media, do not consider the cost of reaching the target audience before the internet became ubiquitous. But still every enterprising person has to be on his/her own -- to find that market and cultivate the target customer -- as you aptly outlined.
Other than the actual costs of managing the infrastructure of the Apps store along with its products, Apple offers all these enterprising individuals the much sought after audience wiling to pay premium for what they perceive as better experience and ease of use.
It is an elitist perspective but many individuals, and companies recognize the potential of such target audience. Just like customers have choices. so do individuals and companies. They can always opt not to ply their products or services through Apple.
To repeat myself, in my other response, these enterprsing individuals and companies can always turn to Android, HP, Nokia, Amazon, Sony, etc. Or, simply stick with their website to attrack subscribers.
Apple Ecosystems
Quote:
Originally Posted by TalkingNewMedia
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
There are 2 models of subscription content we are dealing with here. On one side, we have the Amazon Kindle, where Apple only hosts the Kindle App - and the books themselves are just PDF files hosted by Amazon. I think Apple's new quidelines are a stretch when it comes to the Kindle books - because really, all Apple is doing is providing a platform for the Kindle App.
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
Free PDFs? You've got to be serious. Anything they CHARGE for is encrypted, unless it's one of those unusual works that an author brings out who is against DRM, or something so old it is in the public domain.
What Apple is saying to Amazon is, keep the link to Safari and sell that way, but leave an option that will allow a purchase within the app. How many will buy that way? Don't know. But there should be a choice. When the Apple servers are used, that means the Apple service should be paid for. Same way when the Amazon servers give you the book.
From that point of view, purchases from within the app should be more expensive, for exact amount of middleman's income. It should boil down to:
You can purchase from web site which is a bit more complicated/time consuming, but cheaper
or
You can purchase from the app which is uber-cool and simple and fast, but will cost you more.
No, it will not cost you more. The essential cost structure is the same with Apple and Amazon, except that Amazon can double-dip on the book sold through its site. When they sign the deal for the book, they agree to a flexible price -- they used to only sell at $9.95, but when other sellers came on the market, they were forced to be flexible, acting much more like the agencies in the bookselling business. The publisher decides the price. A lot of best sellers are $9.95, but others are more. It's still less than a book.
But that's one part of the price. The other part is the cost of bandwidth, etc. The only difference is, who earns the money for the download, etc.?
Doesn't iBooks gain an advantage if Amazon is forced to mark up their books to accommodate Apple's 30% fee, when they are fully capable of handling the transaction themselves? It's an abuse of market position. At the very least, we the customers will pay more than we are now and Apple will have a bigger profit on their books.
A monopoly is when there is a single entity that has a majority share of a market to the degree that its actions can influence how that market behaves.
Antitrust is when an entity has taken advantage of a situation to promote anti-competitive behavior.
Quote:
Originally Posted by melgross
Very good! Now how does that apply to this situation?
They don't apply. Those may sound like what Apple is doing, but these laws only take affect when the influence reaches out beyond your own products and forces a direct affect on other products in that market, which would give Apple an unfair advantage, which is not the case here.
Yes, taken in context of book sales, it may seem like Apple is giving itself an unfair advantage by wanting a cut of Kindle sales, but that advantage is contained within in its own product only and not the larger overall market for ebook sales.
The product in question are iOS devices, Apple's platform, wholly owned and maintained by Apple, Inc. What features are made available is completely up to Apple. What Apple cannot do is coerce behavior that extends outside of their product and affects other products. For instance, Apple is free to completely reject the Kindle app, FOR NO REASON. This has no direct negative affect on the Kindle or the Kindle app on Android devices. If anything it could cause sales of those devices to go up. There is no law stating that you must maintain compatibility with other devices.
What Apple is not allowed to do is say, if you want to write an app or make your content available on our platform, then you cannot make it available on any other platform. This does in fact affect all other platforms and is anti-competitive. Apple is not saying that, in fact, they are saying just the opposite. They're saying that if your content available elsewhere, then you must also make it available to us. Why is this fine, because regardless of what the provider decides, only Apple's platform is affected by the decision. And if Apple wants to cut off its nose to spite its face, then that's perfectly fine.
Apple has had a near monopoly of the digital music market for several years now, and it has never used its position to force content creators into exclusivity contracts.
I know there's no way for this to not sound... "Trollish," but if you defend Apple on this, then you are biased. You are an Apple fanboy.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
From the perspective of Apple, I do not see the distinction.
Amazon offers its Kindle App through the iTunes and Mac Apps(???) Store for free because Apple mobile products users are a premium target market. And, they know that the acceptability of their products improve because of those premium target audience. There is a cost for that -- just like companies pay premium advertising for the Football Super Bowl, or other television shows with the desirable demographics. The same is true with restaurants, hotels, stores, etc. offering goods and services to consumers. No one in his/her right mind would condemn the premium services and goods providers to charge much higher than their equivalents, e.g., MacDonald (burgers), Super8??? motels, etc.
Would Amazon create a Kindle App for every ecosystem that reads books electronically? Not likely.
As you state. Amazon, and all those weighing their choices have options to forego of Apple's ecosystem, and even go further, just like what Sony threatened to do -- that they will remove their music catalog from iTunes.
Didn't NBC actually do that several years ago? So, why did NBC get back to iTunes?
If Amazon thinks it has the upperhand, it can attempt to negotiate and/or will do as you suggested. Similarly, companies can band together to have greater collective bargaining power. The music industry did this, even use Amazon, and others, as party to their bargaining (as alternative to iTunes store). And, in a sense, Apple did budge a bit but so did the other side.
It was a prudent decision though for Apple to keep a single uniforum fee, 30%, for individuals and companies, or collectives. That levels the playing field among providers, and allowed more enterprising individuals to compete against the products of behemoths.
The competition then becomes the quality of the products offered. And, in this sense the Apple consumers benefit.
Apple Ecosystems
Quote:
Originally Posted by macarena
There are 2 models of subscription content we are dealing with here. On one side, we have the Amazon Kindle, where Apple only hosts the Kindle App - and the books themselves are just PDF files hosted by Amazon. I think Apple's new quidelines are a stretch when it comes to the Kindle books - because really, all Apple is doing is providing a platform for the Kindle App.
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
Imagine that Amazon is making $100M selling content through the iPad.
Why would they stop doing so?
C.
Well, if they can make $75M selling same stuff outside of iTunes (which is still more than what they are left with, after Apple cuts their share)... why would they stay?
For me, question is not if Apple can try to pull that sort of move... it is more like, can that move be good for Apple and their users, in the long run?
True, I'm finding it interesting that no one (defending Apple move) is considering that Apple might, at some point, find themselves on receiving side of antitrust stick. Not unlike Microsoft has an honour to experience.
The only one who can divine what is fact and true... anyone who disagrees with the edicts of Voight-Kampff shall be doomed to be marked as fanboy.... whereas Voight-Kampff is no fanboy (or fangirl???) of anything ... just the keeper of truth.
"So (s)he has written... so, it shall be"
to paraphrase the script in that old movie "Ten Commandments", when the Pharoah issued his verdict in regard the fate of Moses....
Apple Ecosystems
Quote:
Originally Posted by Voight-Kampff
I know there's no way for this to not sound... "Trollish," but if you defend Apple on this, then you are biased. You are an Apple fanboy.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
Doesn't iBooks gain an advantage if Amazon is forced to mark up their books to accommodate Apple's 30% fee, when they are fully capable of handling the transaction themselves? It's an abuse of market position. At the very least, we the customers will pay more than we are now and Apple will have a bigger profit on their books.
Well sure it does, but its Apple's platform, why wouldn't sales of their content on their platform cost less or give Apple an advantage?
Amazon is a reseller. They have their own platform to sell books through, a website and an ebook device, the Kindle. If they want to use another platform to sell those books, why shouldn't they make less? Sometimes exposure is worth a lot more than profit. From within the app they can still market the Kindle device. There are no restrictions on that.
Samsung makes their own LCD displays. They compete with Apple in mobile devices. They charge Apple more for each LCD panel than it cost them to make. Isn't that giving them an unfair advantage when they can use those panels at cost, but charge everyone else more?
No it's not. Samsung spent the money on developing the manufacturing process and they built the assembly lines to make those LCD panels. Apple doesn't worry about those costs, they just buy the product
Amazon doesn't worry about all the costs Apple puts into developing and maintaining the iOS operating system, advancing and refining the API's and developer tools, developing and marketing iOS devices, distributing apps and updates, etc. So if Apple wants to take advantage of its platform to sell books, then it can do so at cost. If Amazon wants to use that platform, then as a reseller, they better understand they may not make as much as selling it through their own platform.
The only one who can divine what is fact and true... anyone who disagrees with the edicts of Voight-Kampff shall be doomed to be marked as fanboy.... whereas Voight-Kampff is no fanboy (or fangirl???) of anything ... just the keeper of truth.
"So (s)he has written... so, it shall be"
to paraphrase the script in that old movie "Ten Commandments", when the Pharoah issued his verdict in regard the fate of Moses....
Apple Ecosystems
Thank you. I'm glad someone understands and appreciates the undebatable truth behind my words.
If the subscription is initiated outside the app (like your website) then Apple gets nothing.
Yeah, but-- how many users will bother leaving app to purchase off the web site, if price is the same? Lots of people will not even be aware what difference does it make how they purchase, and will purchase from the app as it is a bit more convenient, causing, in time, majority of existing users to move to in-app purchase and significantly reduce Amazon's income.
That one single innocent sentence that starts with "We only demand to..." is a real wolf in the sheep skin.
I know there's no way for this to not sound... "Trollish," but if you defend Apple on this, then you are biased. You are an Apple fanboy.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
Uh huh. And do you defend Amazon's decision not to allow any competition on the Kindle? Personally, I'm fine with that. It's their device, they are free to do whatever they want and allow whatever they want on it. Uh oh! I must be an Amazon fanboy!!!
But, for some reason you don't hold Apple to the same standards. So yes, in fact you are a troll just out to bash Apple.
And you obviously have no idea why Microsoft was considered such an evil company, if you think is worse.
I wonder sometimes whether these internet experts get their ideas about the law, if they even read them.
Then there is the tenet of "Supply and Demand"
Every product or service will be priced dynamically according to the dictates of supply and demand. There are choices, and the consumers can influence the price dynamics through their purchases.
In turn, companies can influence the price dynamics that they can charge by catering to their target audience -- not the totality of consumers.
Apple Ecosystems
Quote:
Originally Posted by mjtomlin
They don't apply. Those may sound like what Apple is doing, but these laws only take affect when the influence reaches out beyond your own products and forces a direct affect on other products in that market, which would give Apple an unfair advantage, which is not the case here.
Yes, taken in context of book sales, it may seem like Apple is giving itself an unfair advantage by wanting a cut of Kindle sales, but that advantage is contained within in its own product only and not the larger overall market for ebook sales.
The product in question are iOS devices, Apple's platform, wholly owned and maintained by Apple, Inc. What features are made available is completely up to Apple. What Apple cannot do is coerce behavior that extends outside of their product and affects other products. For instance, Apple is free to completely reject the Kindle app, FOR NO REASON. This has no direct negative affect on the Kindle or the Kindle app on Android devices. If anything it could cause sales of those devices to go up. There is no law stating that you must maintain compatibility with other devices.
What Apple is not allowed to do is say, if you want to write an app or make your content available on our platform, then you cannot make it available on any other platform. This does in fact affect all other platforms and is anti-competitive. Apple is not saying that, in fact, they are saying just the opposite. They're saying that if your content available elsewhere, then you must also make it available to us. Why is this fine, because regardless of what the provider decides, only Apple's platform is affected by the decision. And if Apple wants to cut off its nose to spite its face, then that's perfectly fine.
Apple has had a near monopoly of the digital music market for several years now, and it has never used its position to force content creators into exclusivity contracts.
Quote:
Originally Posted by piratebob
... This of course is not american idol, people do not get to vote, they can just choose what and where they buy products.
In a sense, it is like American Idol, anyone can vote (or in this case vote with their money, and what they buy. One difference is that there is no single winner.. but a winner for each target group pf consumers.
Comments
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
A monopoly is when there is a single entity that has a majority share of a market to the degree that its actions can influence how that market behaves.
Antitrust is when an entity has taken advantage of a situation to promote anti-competitive behavior.
Very good! Now how does that apply to this situation?
What I'm hearing here is that investors are very worried, as they should be.
There is no way this model is going to survive anti-trust laws.
Apple is starting with 30% knowing full well it's just a number to begin negotiations with.
The anti-competitive policies of not allowing people to have a link to their website etc... are also just there as bargaining chips for the inevitable class action law suit.
The real question is - how desirable is an iDevice that has no content? Because as smart as some people here think they are with all their 'business smarts and clairvoyance'... they always leave out the human factor.
Remember that? The human factor... it's why the Macintosh went from 80% market share to 1.2% in less then a decade.
Make no mistake, Apple is repeating history. iPad will be less then 5% market share in 3 years. I guarantee it (if they stay on this course).
Nobody wants to be on a platform with no content.
Bull. You are able to have a link to a website and allow purchasing that way. But then, of course, you pick up all the charges for bandwidth and storage, right? No problem for Amazon, for whom the expenses are baked into the price. And what's the cut that Amazon takes? Why, it was LARGER than 30%, but now with all the competition, it might be (only) 30%. If a book or newspaper is sold, how much goes to the bookstore? Hmm?
When you click inside the app and start downloading, then the bandwidth you're using comes from Apple. Are they expected to pick up all your charges and charge you nothing?
I don't see a problem with antitrust at all here. Otherwise, Amazon and other companies have the same "issues."
Again: if you download your subscription from an external website, there is a charge. It goes to the other seller, who gives *a portion* of the price to the newspaper or book publisher, according to the deal. (Think the subscription offers come from the magazine? No, they come from fulfillment houses who take a big whack out of your subscription.) You can still do this with the subscription managed outside of Apple. But Apple obliges you to make the same offer in the app, using the APIs they announced today, for the same price or less (not more). And when the sub is bought that way, Apple gets the cut, not Amazon or whatever company is involved.
False, Apple hosts the free app. So Apple's cut has been 30% of 0.
Now Apple's cut is 30% of in-app subscription purchases which seems fair given you can still buy the subscription outside the app.
For books both the Kindle and Nook apps are free and direct competitors with iBooks. Amazon has or had a no-lower-price policy as well. But they aren't subscriptions anyway.
In that case Apple should charge end users (or publishers, if publishers opt to keep end users' cost at zero) for every downloaded copy of application, as application is the one that gets "exposure" on App Store and is hosted by Apple.
What visibility Apple is providing? Are they advertising Amazon, Sony... books on iTunes? They are hardly advertising readers apps - all I have downloaded, I have read about somewhere else.
Oh no, that's not true! Apple shows these apps in their tv commercials. Developers say that it results in big sales.
In addition, just go to iTunes and the App store. You'll see featured apps, favorites and such. This also results in bigger sales.
Even in their paper Ads, you can see the names of the apps in the pictures. People buy these apps. As Apple rotates them, sales move around.
I am amazed sometimes how people who have not been involved at all about the process of creating any product, including media, do not consider the cost of reaching the target audience before the internet became ubiquitous. But still every enterprising person has to be on his/her own -- to find that market and cultivate the target customer -- as you aptly outlined.
Other than the actual costs of managing the infrastructure of the Apps store along with its products, Apple offers all these enterprising individuals the much sought after audience wiling to pay premium for what they perceive as better experience and ease of use.
It is an elitist perspective but many individuals, and companies recognize the potential of such target audience. Just like customers have choices. so do individuals and companies. They can always opt not to ply their products or services through Apple.
To repeat myself, in my other response, these enterprsing individuals and companies can always turn to Android, HP, Nokia, Amazon, Sony, etc. Or, simply stick with their website to attrack subscribers.
Apple Ecosystems
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
There are 2 models of subscription content we are dealing with here. On one side, we have the Amazon Kindle, where Apple only hosts the Kindle App - and the books themselves are just PDF files hosted by Amazon. I think Apple's new quidelines are a stretch when it comes to the Kindle books - because really, all Apple is doing is providing a platform for the Kindle App.
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
Free PDFs? You've got to be serious. Anything they CHARGE for is encrypted, unless it's one of those unusual works that an author brings out who is against DRM, or something so old it is in the public domain.
What Apple is saying to Amazon is, keep the link to Safari and sell that way, but leave an option that will allow a purchase within the app. How many will buy that way? Don't know. But there should be a choice. When the Apple servers are used, that means the Apple service should be paid for. Same way when the Amazon servers give you the book.
From that point of view, purchases from within the app should be more expensive, for exact amount of middleman's income. It should boil down to:
You can purchase from web site which is a bit more complicated/time consuming, but cheaper
or
You can purchase from the app which is uber-cool and simple and fast, but will cost you more.
No, it will not cost you more. The essential cost structure is the same with Apple and Amazon, except that Amazon can double-dip on the book sold through its site. When they sign the deal for the book, they agree to a flexible price -- they used to only sell at $9.95, but when other sellers came on the market, they were forced to be flexible, acting much more like the agencies in the bookselling business. The publisher decides the price. A lot of best sellers are $9.95, but others are more. It's still less than a book.
But that's one part of the price. The other part is the cost of bandwidth, etc. The only difference is, who earns the money for the download, etc.?
But is Apple fair in charging 30%?
Doesn't iBooks gain an advantage if Amazon is forced to mark up their books to accommodate Apple's 30% fee, when they are fully capable of handling the transaction themselves? It's an abuse of market position. At the very least, we the customers will pay more than we are now and Apple will have a bigger profit on their books.
http://online.wsj.com/article/SB1000...997208194.html
You are apparently not the only one thinking that way... Wall Street Journal is also thinking about possible antitrust issues.
A monopoly is when there is a single entity that has a majority share of a market to the degree that its actions can influence how that market behaves.
Antitrust is when an entity has taken advantage of a situation to promote anti-competitive behavior.
Very good! Now how does that apply to this situation?
They don't apply. Those may sound like what Apple is doing, but these laws only take affect when the influence reaches out beyond your own products and forces a direct affect on other products in that market, which would give Apple an unfair advantage, which is not the case here.
Yes, taken in context of book sales, it may seem like Apple is giving itself an unfair advantage by wanting a cut of Kindle sales, but that advantage is contained within in its own product only and not the larger overall market for ebook sales.
The product in question are iOS devices, Apple's platform, wholly owned and maintained by Apple, Inc. What features are made available is completely up to Apple. What Apple cannot do is coerce behavior that extends outside of their product and affects other products. For instance, Apple is free to completely reject the Kindle app, FOR NO REASON. This has no direct negative affect on the Kindle or the Kindle app on Android devices. If anything it could cause sales of those devices to go up. There is no law stating that you must maintain compatibility with other devices.
What Apple is not allowed to do is say, if you want to write an app or make your content available on our platform, then you cannot make it available on any other platform. This does in fact affect all other platforms and is anti-competitive. Apple is not saying that, in fact, they are saying just the opposite. They're saying that if your content available elsewhere, then you must also make it available to us. Why is this fine, because regardless of what the provider decides, only Apple's platform is affected by the decision. And if Apple wants to cut off its nose to spite its face, then that's perfectly fine.
Apple has had a near monopoly of the digital music market for several years now, and it has never used its position to force content creators into exclusivity contracts.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
From the perspective of Apple, I do not see the distinction.
Amazon offers its Kindle App through the iTunes and Mac Apps(???) Store for free because Apple mobile products users are a premium target market. And, they know that the acceptability of their products improve because of those premium target audience. There is a cost for that -- just like companies pay premium advertising for the Football Super Bowl, or other television shows with the desirable demographics. The same is true with restaurants, hotels, stores, etc. offering goods and services to consumers. No one in his/her right mind would condemn the premium services and goods providers to charge much higher than their equivalents, e.g., MacDonald (burgers), Super8??? motels, etc.
Would Amazon create a Kindle App for every ecosystem that reads books electronically? Not likely.
As you state. Amazon, and all those weighing their choices have options to forego of Apple's ecosystem, and even go further, just like what Sony threatened to do -- that they will remove their music catalog from iTunes.
Didn't NBC actually do that several years ago? So, why did NBC get back to iTunes?
If Amazon thinks it has the upperhand, it can attempt to negotiate and/or will do as you suggested. Similarly, companies can band together to have greater collective bargaining power. The music industry did this, even use Amazon, and others, as party to their bargaining (as alternative to iTunes store). And, in a sense, Apple did budge a bit but so did the other side.
It was a prudent decision though for Apple to keep a single uniforum fee, 30%, for individuals and companies, or collectives. That levels the playing field among providers, and allowed more enterprising individuals to compete against the products of behemoths.
The competition then becomes the quality of the products offered. And, in this sense the Apple consumers benefit.
Apple Ecosystems
There are 2 models of subscription content we are dealing with here. On one side, we have the Amazon Kindle, where Apple only hosts the Kindle App - and the books themselves are just PDF files hosted by Amazon. I think Apple's new quidelines are a stretch when it comes to the Kindle books - because really, all Apple is doing is providing a platform for the Kindle App.
On the other side, there are *apps* like "The Daily". In this case, the content is an App - designed to have special effects, and user interaction beyond what regular HTML5 can offer. In this case, Apple actually has to host the content as well, because the content is published in the form of an App. Content owners cannot provide this functionality from a HTML5 website - because the user experience would be impacted badly.
I think Apple (and for that matter, us) need to distinguish between these two models. I think it is entirely appropriate to get a 30% cut on subscriptions to "The Daily", especially because it comes with a lot of convenience features - the App will be updated automatically for you as you wake up, etc. Also, Apple has to pay credit card charges, bandwidth charges, storage charges, etc.
The question we should be asking is - are these guidelines even applicable to the Kindle App. Remember, the Kindle App is the only one where this model falls apart totally. After Apple's cut of 30%, Amazon will not be left with anything! I think what Apple is doing, is that rather than create a special category for the Kindle App, they can negotiate directly with Amazon for different terms just for this app. Maybe 10% or so. We will know soon, based on whether the Kindle App stays in the store, or is pulled. Quite obviously, the existing policy does not make any sense for Amazon to continue selling in the store.
One possible option for Amazon - They can eliminate the link to Safari, and not provide any in-app purchasing capability. They can simply treat iPad subscribers as "Existing Subscribers" for whom the content is free anyway. This is a model allowed by Apple, even under the new guidelines. The only problem is that customers will be forced to buy the App separately, and then use it from the Kindle app. In such a case, the Kindle app will become a simple "Bookshelf" to display the books you own - and not a store.
Imagine that Amazon is making $100M selling content through the iPad.
Why would they stop doing so?
C.
Well, if they can make $75M selling same stuff outside of iTunes (which is still more than what they are left with, after Apple cuts their share)... why would they stay?
For me, question is not if Apple can try to pull that sort of move... it is more like, can that move be good for Apple and their users, in the long run?
The difference here is that neither the Xbox nor the PS3 had a dominant market position. If one of them had, they could be in trouble.
But in the app market already has an 82% market share, that is far higher than the Xbox or PS3.
http://www.isuppli.com/Media-Researc...t-in-2010.aspx
True, I'm finding it interesting that no one (defending Apple move) is considering that Apple might, at some point, find themselves on receiving side of antitrust stick. Not unlike Microsoft has an honour to experience.
"So (s)he has written... so, it shall be"
to paraphrase the script in that old movie "Ten Commandments", when the Pharoah issued his verdict in regard the fate of Moses....
Apple Ecosystems
I know there's no way for this to not sound... "Trollish," but if you defend Apple on this, then you are biased. You are an Apple fanboy.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
But is Apple fair in charging 30%?
Doesn't iBooks gain an advantage if Amazon is forced to mark up their books to accommodate Apple's 30% fee, when they are fully capable of handling the transaction themselves? It's an abuse of market position. At the very least, we the customers will pay more than we are now and Apple will have a bigger profit on their books.
Well sure it does, but its Apple's platform, why wouldn't sales of their content on their platform cost less or give Apple an advantage?
Amazon is a reseller. They have their own platform to sell books through, a website and an ebook device, the Kindle. If they want to use another platform to sell those books, why shouldn't they make less? Sometimes exposure is worth a lot more than profit. From within the app they can still market the Kindle device. There are no restrictions on that.
Samsung makes their own LCD displays. They compete with Apple in mobile devices. They charge Apple more for each LCD panel than it cost them to make. Isn't that giving them an unfair advantage when they can use those panels at cost, but charge everyone else more?
No it's not. Samsung spent the money on developing the manufacturing process and they built the assembly lines to make those LCD panels. Apple doesn't worry about those costs, they just buy the product
Amazon doesn't worry about all the costs Apple puts into developing and maintaining the iOS operating system, advancing and refining the API's and developer tools, developing and marketing iOS devices, distributing apps and updates, etc. So if Apple wants to take advantage of its platform to sell books, then it can do so at cost. If Amazon wants to use that platform, then as a reseller, they better understand they may not make as much as selling it through their own platform.
The only one who can divine what is fact and true... anyone who disagrees with the edicts of Voight-Kampff shall be doomed to be marked as fanboy.... whereas Voight-Kampff is no fanboy (or fangirl???) of anything ... just the keeper of truth.
"So (s)he has written... so, it shall be"
to paraphrase the script in that old movie "Ten Commandments", when the Pharoah issued his verdict in regard the fate of Moses....
Apple Ecosystems
Thank you. I'm glad someone understands and appreciates the undebatable truth behind my words.
You forget this:
If the subscription is initiated outside the app (like your website) then Apple gets nothing.
Yeah, but-- how many users will bother leaving app to purchase off the web site, if price is the same? Lots of people will not even be aware what difference does it make how they purchase, and will purchase from the app as it is a bit more convenient, causing, in time, majority of existing users to move to in-app purchase and significantly reduce Amazon's income.
That one single innocent sentence that starts with "We only demand to..." is a real wolf in the sheep skin.
I know there's no way for this to not sound... "Trollish," but if you defend Apple on this, then you are biased. You are an Apple fanboy.
Please, don't try and debate this. It's a fact. If you support this, you are an Apple fanboy. It's just that simple, no matter how you rationalize it.
This has three immediate outcomes:
(1)Subscription service providers suck it up, and give a massive portion of their profit to Apple (remember, this isn't 30% of the profit they make, but 30% of the REVENUE).
(2)Subscription service providers can't afford this, so they raise their prices (not just in the App store, but everywhere, since Apple won't allow it to be more expensive for just them).
(3)Subscription service providers pull out from Apple's closed off eco-system, leaving Apple's own competing services with less or no competition.
It's no surprise Apple is enforcing this now. In every one of those, Apple wins, but the competitor loses. The customer also loses in every one of those, too; either direct or indirectly. But they're still losing; we're still losing.
Please don't be a fanboy to a company like this. They're so much worse than Microsoft ever was.
Uh huh. And do you defend Amazon's decision not to allow any competition on the Kindle? Personally, I'm fine with that. It's their device, they are free to do whatever they want and allow whatever they want on it. Uh oh! I must be an Amazon fanboy!!!
But, for some reason you don't hold Apple to the same standards. So yes, in fact you are a troll just out to bash Apple.
And you obviously have no idea why Microsoft was considered such an evil company, if you think is worse.
I wonder sometimes whether these internet experts get their ideas about the law, if they even read them.
Then there is the tenet of "Supply and Demand"
Every product or service will be priced dynamically according to the dictates of supply and demand. There are choices, and the consumers can influence the price dynamics through their purchases.
In turn, companies can influence the price dynamics that they can charge by catering to their target audience -- not the totality of consumers.
Apple Ecosystems
They don't apply. Those may sound like what Apple is doing, but these laws only take affect when the influence reaches out beyond your own products and forces a direct affect on other products in that market, which would give Apple an unfair advantage, which is not the case here.
Yes, taken in context of book sales, it may seem like Apple is giving itself an unfair advantage by wanting a cut of Kindle sales, but that advantage is contained within in its own product only and not the larger overall market for ebook sales.
The product in question are iOS devices, Apple's platform, wholly owned and maintained by Apple, Inc. What features are made available is completely up to Apple. What Apple cannot do is coerce behavior that extends outside of their product and affects other products. For instance, Apple is free to completely reject the Kindle app, FOR NO REASON. This has no direct negative affect on the Kindle or the Kindle app on Android devices. If anything it could cause sales of those devices to go up. There is no law stating that you must maintain compatibility with other devices.
What Apple is not allowed to do is say, if you want to write an app or make your content available on our platform, then you cannot make it available on any other platform. This does in fact affect all other platforms and is anti-competitive. Apple is not saying that, in fact, they are saying just the opposite. They're saying that if your content available elsewhere, then you must also make it available to us. Why is this fine, because regardless of what the provider decides, only Apple's platform is affected by the decision. And if Apple wants to cut off its nose to spite its face, then that's perfectly fine.
Apple has had a near monopoly of the digital music market for several years now, and it has never used its position to force content creators into exclusivity contracts.
... This of course is not american idol, people do not get to vote, they can just choose what and where they buy products.
In a sense, it is like American Idol, anyone can vote (or in this case vote with their money, and what they buy. One difference is that there is no single winner.. but a winner for each target group pf consumers.
Apple Ecosystems