Apple unveils subscriptions for iOS App Store, bans links to out-of-app purchases - Page 2

Incorrect analogy, Apple is not distributing anything.

30% cut is not the real issue. Major publishers can afford to give that but what they really want is personal info of subscribers that Apple refuses to just hand out. Publishers makes more money off selling Ads than subscription. Apple is compromising with Opt-In letting consumers decide to give their personal info away but publishers are insisting on Opt-Out.

That's a good point. I work for a magazine/newspaper but I am somewhat skeptical. Your point really warms me to this idea which I was initially cold on. So publishers can set the price 30% higher. I don't see a problem with that at Itunes type prices.

Exactly. Further, processing the payment and hosting the data costs money. Try creating that infrastructure yourself. On top of that, Apple is giving the publishers a platform to make money. Publishers aren't making seventy percent on Amazon. Moreover, publishing on the platform is optional.

I am not sure what you mean by hosting. At least with the App store's iBooks this is not a cloud situation where they stream books to me and I can keep a zillion books in their library. I buy a book and download it to my device (just like music on iTunes). It is mine at that point. No hosting here other than for the sale (which is not really different from the brick and mortar model).

I know the Kindle is somewhat of a different beast but I was under the impression that you still have to download what you buy i.e., it is not some sort of streaming thing (e.g., renting a movie on iTunes, key word here is rent).

but - I am sure someone will correct me if I am wrong; everyone here is always so king about that. [/QUOTE]

Yes all of the people here with business degrees and intimate knowledge of the publishing world are providing us with wonder analysis. I am sure all business deals from food to cars, etc would receive the same treatment if they were regularly published. This of course is not american idol, people do not get to vote, they can just choose what and where they buy products.

When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.

Apple is NOT hosting any data.

so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.

...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous

i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.

You make it sound like profit margins aren't greater than 30%. This isn't necessarily, or even usually the case. A company in the publishing business can EASILY give up 30% and still be making profit. The price will continue to be set at what makes the most money. Suppliers of content won't increase outside prices by 30% if that means they will sell 1/5 as much. I wouldn't worry too much about prices going skyrocket. Hard copy magazines are currently an absurd $6-20, and I don't see this happening when a few clicks of a button and a company realizes they are making 40% more money. They will do what is most profitable, and they can't just 'raise' prices without paying the price.

Isn't Apple only distributing the app while the content is distributed by Amazon et al. I don't see any justification for a 30% cut if Apple is just processing the payment for the content.

I don't suppose any of us can wait to see this in practice to make an informed decision of how it impacts us economically? I know that goes against the peculiar need to show others how smart we are, but it could be helpful.

There was a kindle app update this morning. No change as far as I can tell in purchasing books. You press 'Kindle Store' and Safari opens on the Kindle Store. There is no in app purchase option there.

The apologists are out in force. This is a cost for being on the platform. It needs the publishers to have a 43% margin to begin with, as the 30% applies on top of everything.

So Kindle and Skype will probably leave.

Most people who buy Apple products are not of the mindset of the people on here - buyers of iPods are clearly not buyers of Macs, same with iPhones and iPads.

In some future date the buyer will go into a shop, ask for a tablet and the technically minded seller - a group often hostile to Apple - will suggest that they take a look at Android as all the books they bought on Kindle and Sony E-Books will not be available.

I don't see how 'waiting and seeing' is helpful. Of course, making absurd conjectures can be destructive. But, just sitting around doing nothing isn't usually "helpful".

Not all industries are created equal and have the same margins.


Or that he's a control freak.

I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?

Don't buy it if it costs too much!

They were not selling, they have started to sell and forcing to put this option and disabling links to the browser to cut the 30%, so different.

How about all of those upset by apple's 30% take(cause you must have read the whole deal yourself) write or call the publisher and tell them they are making a GIANT mistake. That you will provide them an avenue which holds millions of people in which to sell their magazine. And you will do it for free or practically free,(not sure what the general consensus is to what percentage should be paid) ! Next you should check with all of the vendors who sell through amazon and make sure they too are getting a good deal and not having to give up too much. And then you should go after day traders, all they do is buy and sell stock to make money, all the while raising prices on everything including magazines! You will really be putting your MBA to good use rather than just posting on some random websites.

And I am sick of getting 10k mailings to subscribe or resubscribe. If I choose to do it via iTunes and the new publication is coming from apple why shouldn't they keep 30%? Its more content that comes through apples channel and cant be given away, hosted, payment processed for free!

Otherwise whats to stop someone from putting up a free app and then charging for subscription and not giving apple a dime and getting apple to host and market it.

And when you said apple isn't doing anything, thats wrong. They are hosting, marketing (being in the app store is marketing, believe it or not, and processing payment. All that does cost.

With all said and done maybe 30 percent is high for subscription. Maybe 20 or 15. But I dont know what the cost of processing payment and hosting all the content costs apple. But that cost should definitely be forwarded to the content provider.

And yes I do want to get my subscriptions all from iTunes and not have to worry about going to external sites and sharing my data with more companies. I would pay more for it. If they dont like it then they can not be on iTunes and I simply wont have their publication.

Its hardly semantics. Amazon ( or Sony) have the books on their server, they have bought the content rights, they can handle the credit card transaction themselves.

Apple, supplying none of this, is getting in the middle. By forcing the same price ( or better, lol) in the in App purchase the user is going to use the in-app purchase to renew.

BTW Apple could allow that button to be an link to the credit card transactions from Amazon, they already banned that with 11.2, this is new, it means the only button on your app is going to take 30% of your total price, meaning to need to have 43% margins. Nobody really has that.

Exactly.

But you can go to Amazon in your browser, buy your book and download it on the iDevice of your choice or all of them.

What is that? Like 30 seconds more?

It doesnt come through Apple's channels. I am banging my head against the wall, here.


What would be wrong with that. Its the way iTunes works on Windows.


They are hosting nothing but the original app - the e-books and other content are not hosted. The cost of the processing payment is 1-2% normally.



Well they wont be on "iTunes" ( or the App store) because no business model can survive this.

So processing payment is not worth 30% but hosting plus payment processing is?!

You guys don't understand the whole concept here. Apple and Amazon are not charging 30% for services they provided. They are getting a cut for the exposure they offer. For publishers the work is already done (digital publications) and unlike prints it will not cost them a cent more if they sell it to more people. It is well worth the 30% if they can get another source of distribution.

A newspaper cost you the same everywhere (newsstand, vending machine.. etc) even though the cost associated with each distribution channel is different.

It's refreshing to see that Apple will continue to offer a way to authorize subscriptions purchased outside the iOS ecosystem. I would hate to see prices on sports subscriptions (such as MLB.TV) be raised to compensate for the 30% fees.

Your reply makes no sense. Throughout the history of commerce, there have always been middlemen. Apple is no different. They provide the opportunity for you to buy, they get a cut. You don't want to use them, then to go the website. It's as simple as that.

I guess I'm a bit tainted as a shareholder. Anytime I see Apple doing well to make a profit, I'm good, and if they have the market power to outgun Amazon, Sony or whoever, well, then more power to them. They've earned it.

You're wrong if you believe that Apple should be adhering to some sort of social propriety of yours. What? They should make business easy for Amazon or Sony? Because why? No shrewd business would ever do that. If you don't understand that, then you don't understand business.

They're in this business to make money. Get over it.

Agreed.

But I look at it as a three-fold service: Hosting, Users and Marketing in a Global uniform Store gives you equal footing against all your competitors. That's well worth the 30%.

Update: Oops. NasserAE said it much more eloquently than me already.

Developers are not just paying 30% for processing the payment. They are paying for access to millions of users they would not be able to reach any other way. 3 or 4 years ago this market never existed an it was the innovation that Apple brought that allows them to male money this way at all. There us always the other more traditional ways to reach these users if they can - print their magazine or book and sell it at BN or Amazon, self publish from their website or use some other online distribution or sell via android, blackberry or windows mobile app stores. The competition is getting a headstart from Apple here - does Kindle allow you to access Apple's bookstore at all? How about Nook? Can I buy DS or Sony games for iPhone at all?

Are you out of your mind. Should Microsoft charge any app 30% for making money on Windows???

Lets all look at it this way:

This will kill Kindle, Skype, Audible, a bunch of other premium services that we bought our iPads and iPhones for.

Any online service that sells services outside the AppStore must now allow iOS users to buy those services inside the app and thus be subject to a 30% fee. If this is enforced as stated in the article, it could have huge consequences for the content available on the iTunes store.

I think that this means they can give users access to their existing Kindle subscriptions for free, but need to offer the same subscriptions in-app. I think this also means that books purchased on the Web or on other devices are available for free, but Apple takes 30% of books purchased on iOS.

It seems to me that the idea is okay but 30% is way too much. At the least this should go down with volume to something approaching a credit card fee, since high volume apps are bringing lots of value added to the Apple devices. At something close to a credit card fee Apple could take a cut of *all* purchases of merchandise, which is probably worth more than a too-large cut of just media anyways.

I think you are looking at it only from one angle here though. For instance it would all work out fine with *lower* prices for consumers if the magazines split up their business and put *all* the digital content through the app store and only did the paper subscriptions themselves as they have always done. Arguably, this is what Apple is pushing them to do.

I also don't see how Apple could do it any other way. To do it your way (or let's call it the way the magazine publishers want), Apple would be providing a premium experience of reading digital subscriptions on iOS, yet allow all the publishers to undercut them on the web. It's not a viable business model to spend all the money on hosting and infrastructure, and then let the publishers sell subscriptions for cheap without paying Apple anything at all. For that to work, the publishers would have to give Apple a slice of it's physical subscription money as well.

Another aspect is that Apple, through the iTunes store, has it's own customer base and it's one of the best on the planet. To do it the publishers way, they would get the advantages of marketing to this new, exclusive group of folks (many who have never subscribed to a paper magazine and are therefore absolute "gold" as subscribers), yet pay Apple essentially nothing.

I don't believe that any of this will put pressure on prices either because if the publishers are smart it would only put pressure on paper subscription prices, and those are already so high it's pretty ridiculous. Overall, I would expect that it will work just like software in that the pressure on prices would be downward, and would be made up for by a huge increase in volume.

Not to forget that Apple is also in the advertisement business now. Right now Amazon and others are only paying Apple $99/year and giving away their apps for free. Right now these apps are working like ads forwarding people to the developer website for purchases. It is like a free advertisement for them.

It is like Amazon placing a book dispensing machine inside B&N stores without paying B&N rent or royalties.

Major credit cards don't provide the visibility - which is marketing. Real big difference here. There is nothing stopping you from providing content that Kindle (or for another eReader) can read and selling it on your web site. I think Apple's bottom line is if you want to advertise it through an App (especially one that you give away for free - and generates no direct revenue for Apple) then it is fair to pay a toll. The other way you could approach this is with an iAd for advertising on the device itself or some other print or digital media outlet if you really want to avoid paying Apple all together . If you think 30% is a lot wait till you see how much it is going to cost by marketing your goods in one of these alternative ways!

The problem is most people have no idea what it takes to run a business, all of the costs behind just starting a business is high. They are also neglecting the fact a publisher is using a product to publish their magazine. Apple spent money to design and produce that product and is spending money to maintain and upgrade that product as well. As well as many other points that have been made by other posters here the biggest one being the user base apple can provide. The point being that business is complex and involves many variables and one cannot just look at a single factor and make an informed judgment.

They aren't "forcing" their way between the customer and the content supplier. They didn't 'force' everyone to buy their products. Nor do they 'force' content suppliers to offer stuff on the app store, and then offer stuff in-app. A content provider could choose not to create an app in the first place. They could easily just create an html5 app. Or provide content over the internet, that could then be synced to ibooks. If it's like you say than we'll see companies do this because 1)they have to and 2)because they wouldn't have to pay 30%. However, if we see companies NOT doing this, then we can agree that companies are doing it because it's the most profitable course of action. (atleast over time)

I really don't get people posting today. People have cried and cried for a subscription service from Apple and the second it comes out you hate on it.

Did you really think Apple was going to release a subscription service without their usual 30%??? I really don't get what you thought exactly.

The only question left on the table was how are they going to handle the users personal info. And even that was pretty much answered with how The Daily handled it.

This is Apples model, you should expect it by now. Get over it.

I'm really concerned about how they'll handle my Audible account. I'm just glad this change happened before iPad 2 came out because I was planning to buy one. Now I'll wait to see what transpires here first. It looks like I'll be keeping my Android phone for awhile longer too. I was waiting for Apple to unshackle themselves from AT&T, but I really don't like these policies.

Apple is not providing a service to most of these publishers. Apple did not "find" me for them, Audible did. Amazon (Kindle) did. Popular Mechanics did. What service is Apple providing these people that justifies a 30% cut? I sincerely hope that Audible and Amazon cut ties with Apple over this. I'll keep my seamless experience on non-Apple devices, and if I do choose to get an iPad/iPhone, I'll just have to use iTunes to sync them and lose the great Audible App experience over the mediocre iPod player (mediocre for audiobook listening, that is). Hopefully Apple is mere weeks away from unveiling wireless iTunes syncing because that will somewhat blunt the effects of this decision, though it still won't be as seamless as the current Audible app is.

I agree 100%. (Was writing a similar post apparently at the same time as yours).

Well said.