Apple unveils subscriptions for iOS App Store, bans links to out-of-app purchases - Page 12

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.

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.

Originally Posted by Carniphage

Imagine that Amazon is making $100M selling content through the iPad.
Why would they stop doing so?

C.

Originally Posted by noirdesir

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

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.

Originally Posted by cmf2

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.

Originally Posted by apple-ecosystems

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

Originally Posted by NasserAE

You forget this:

If the subscription is initiated outside the app (like your website) then Apple gets nothing.

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.

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.

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.

Originally Posted by Voight-Kampff

Thank you. I'm glad someone understands and appreciates the undebatable truth behind my words. <3 <3 <3

Originally Posted by melgross

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.

Originally Posted by NasserAE

If I were Amazon I would make IAP painfully tedious so that people would find it less tedious to do it on the website

Originally Posted by nikon133

From my personal experience with iTunes and Apps Store, I can't see a value in what Apple does (in order to promote apps and media) as worth 30% of the price.

I will say again that it is my personal opinion only... but as it is, I will be surprised if all those electronic publishers remain with Apple after all this.

Originally Posted by nikon133

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.

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.

Originally Posted by nikon133

From my personal experience with iTunes and Apps Store, I can't see a value in what Apple does (in order to promote apps and media) as worth 30% of the price.

I will say again that it is my personal opinion only... but as it is, I will be surprised if all those electronic publishers remain with Apple after all this.

Originally Posted by mjtomlin

It's called exposure. Exposure to a group of users that are willing to spend money. A group of users that accounted for 80%+ of all app revenue made by all mobile devices last year. If any publisher or developer would be willing to pass up that demographic for a mere 30% fee (which is peanuts to a publisher compared to all the other revenue brought in from advertising), then more luck to them.

It amazes me that no one sees any VALUE in something like that!?


The only apps that may disappear are the content resellers, who are hawking other people's content through their stores.

Originally Posted by AdonisSMU

did some more thinking on this and....This is Apple going after distributors without a doubt. It's trying to cut out the middle man and get publishers to work directly with Apple.

Originally Posted by mjtomlin

It's called exposure. Exposure to a group of users that are willing to spend money. A group of users that accounted for 80%+ of all app revenue made by all mobile devices last year. If any publisher or developer would be willing to pass up that demographic for a mere 30% fee (which is peanuts to a publisher compared to all the other revenue brought in from advertising), then more luck to them.

It amazes me that no one sees any VALUE in something like that!?


The only apps that may disappear are the content resellers, who are hawking other people's content through their stores.

Originally Posted by penchanted

I feel that this situation with subscription content and third-party retailers/distributors feels like it could blow up and wok against Apple's long-term interest.

Originally Posted by nht

It could. But so could letting Kindle become completely dominant because it runs on the iPad as well as the Kindle and the Nook Color with jailbreak. That's probably pissing of B&N to some degree.

Here's a couple of questions: if Apple execs didn't run the new requirements past big media companies, can Apple be sure how they will respond? What if Apple succeeds only in pushing them into the arms of Amazon or another competitor?

Some newspaper publishers suspect Apple is trying to lock them into the App Store and is "setting itself up as a toll taker," according to Joshua Benton, director of Harvard's Nieman Journalism Lab who formerly worked for the Dallas Morning News.
"It's disappointing to learn that in exchange for the convenience of a 'Buy' button in their iPad app," Benton wrote, "[publishers will] have to give up 30 percent of the revenue."

Originally Posted by nikon133

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.

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.

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.

Originally Posted by penchanted

Don't get me wrong - these companies should definitely be paying for access to Apple's customers (plus the payment processing fees), but thirty percent just seems too much.

My major concern is for the long-term relationships that Apple establishes with publishers and other content providers. It appears, based on the information we have, that Apple has run a bit roughshod over them.

Here's a pretty good article that covers some of the issues:
http://news.cnet.com/8301-31001_3-20032143-261.html

From the article:


and

Originally Posted by nikon133

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.

Originally Posted by nikon133

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?

Originally Posted by nikon133

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?

Originally Posted by Carniphage

Doesn't the Amazon book store have an unfair advantage on the Kindle reader?

C.

Originally Posted by hatunike

How about you walk into a wal-mart and try to open a minishop aisle and not pay anything to wal-mart. GADZOOKS! Why has NOONE thought of this!?!?! Think about it, its a great location, people are there to shop! You bought something there, you can just open your own shop up there too. Heck, maybe you even sold some stuff through wal-mart before. Maybe you are the owner of a company that sells through Wal-mart. Of course without people like you wal-mart would NEVER have sold a single item....so of course, it's your right to walk into wal-mart and use wal-mart to open up your own store with your own rules....hmm forget wal-mart....what did they ever do anyways?

Originally Posted by Swift

You win! You are a troll!

Originally Posted by kotatsu

Nope, he's just telling the truth.

Apple are a millions miles away from being reasonable here, and when Amazon and every other premium content supplier ditches iOS for Android, you can be Apple will, long after everyone else, realise how terribly wrong they were.

Originally Posted by joindup

Hypothetical Situation:

I create a free iOS App to read e-magazines sold on my website.

3 questions:

QUESTION 1:
Can I replace my "Buy on website" button with a big message, saying "Buy magazines from our website URL"?

QUESTION 2:
We decide to fall into line and introduce IAPs. If the economics of the sale of an issue of a magazine were this:

Bought-on-website issue sells for $10.
Costs are $2.
We give 75% of margin to the author and publisher = $6.
We keep 25% of margin = $2.

Under the new rules, if we added IAP and absorbed the IAP fees equally between us, this would result in:

IAP issue sells for $10.
Costs are $2.
We give $3 to Apple.
We give 75% of margin to the author and publisher = $3.75.
We keep 25% of margin = $1.25.

If we also wanted to sell the same magazine on our website slightly cheaper like this, spending more on marketing to support that effort:

Bought-on-website issue sells for $9.
Costs rise 50% to $3 (to accommodate additional web marketing).
We give 75% of margin to the author and publisher = $4.50.
We keep 25% of margin = $1.50.

Both we and the publishers make more money - even if the additional web costs rise 50%.

QUESTION 3:

Would Apple insist we must charge $10 for it to match the IAP price?
If so, how is it in the customers' interests to force a price rise?
.

Originally Posted by tipt

If you are so confident in your opinion why tell people they can't respond? I really don't think you have any basis to label someone else. Everyone has their opinions. You make statements without much basis.

Originally Posted by Carniphage

The revenue split is a great deal for publisher. They get to keep more money than publishing through other channels. And the iPad delivers a large number of active consumers.

It's good for consumer too. The one-click in-app purchasing is more convenient and they don't have to face the prospect of their personal details being re-sold.

This is a not a great deal for middle-men. Those companies who take content from publishers, and then want to re-publish it are going to find themselves squeezed.

If a publisher wants their content on an iPad, why would they want to share revenue with a middle man? They can do better publishing it directly.

It's possible the move could alienate some vendors. But it's going to attract more content.

C.

Originally Posted by Carniphage

The revenue split is a great deal for publisher. They get to keep more money than publishing through other channels. And the iPad delivers a large number of active consumers.

It's good for consumer too. The one-click in-app purchasing is more convenient and they don't have to face the prospect of their personal details being re-sold.

This is a not a great deal for middle-men. Those companies who take content from publishers, and then want to re-publish it are going to find themselves squeezed.

If a publisher wants their content on an iPad, why would they want to share revenue with a middle man? They can do better publishing it directly.

It's possible the move could alienate some vendors. But it's going to attract more content.

C.