Apple unveils subscriptions for iOS App Store, bans links to out-of-app purchases - Page 13

But we aren't discussing the "App Store" in general, we are discussing in-app purchases within an app sold in the App Store. So we did leave the greater mall and entered a single store, in my analogy a grocery store -- maybe a Target Greatland if that makes you feel better since they are attached to malls all over.

Try to be careful and not miss the actual content of the thread.

If it's such a good deal, it doesn't have to be forced on everyone. People will willingly exercise the option to use it.

The middle men being squeezed are the same ones that have done the most for online streaming video. I want to see online streaming video succeed, and it doesn't only affect middle men. It affects any cross-platform service. If a network wanted to start streaming their channel live online for a monthly fee, and offered an app to stream to the iPhone, Apple would require them to add an in app subscription button where they'd take 30% of the subscription fee.

It's quite convenient for Apple that the companies hit hardest with this happen to be in competition with Apple's Music, Video and Print sales. If Apple has sufficient influence over the market (this is different from market share) I still think there could be some valid anti trust claims in there.

There is a way out though. It's HTML5 (I guess it's just HTML now) and DRM free sales. Online video can be served through HTML5 sites and eBooks and other media sold DRM free could be read by any app that could read the file type and apps not associated with the online store couldn't feature in-app purchasing. I guess standardized DRM, like what Adobe is trying to do for eBooks could also work but DRM free would be better. If Apple does drive companies to do this, I'll be happy with the end result, but I doubt that is Apples intention.

Don't be not-sure. be very sure that an incredible number of posters have no clue about the terms they use on this board. They just spout self-serving pseudo-logic built on personal definitions of terms, not reasoned use of carefully, precisely, legally defined terminology.

Mel, I think he's saying the opposite, the Apple is a monopoly folks are out to lunch.

This is bandied about in several places, yet I fail to see any way that this alarming possibility is the least bit likely. Easy to state hard to justify.

Your statement about preventing other devices from working with iTunes is blatantly false. Many devices over the years have worked with iTunes, leveraging off the iTunes XML metadata and processing that in a third party application. What Apple didn't allow was Palm faking a Pre-as-an-iPod over the USB bus so Palm wouldn't have to write any of their own iTunes sync software. A move the USB consortium threatened Palm with expulsion over if they did not cease the illicit ID faking because it broke consortium contracts.

Yes, they are. Via the appearance of those entities in the App Store. How narrow minded you are to not see that.

While I agree with a significant chunk of your post, the "After Apple's cut of 30%, Amazon will not be left with anything!" is bogus and based on overly naive arithmetic.

Amazon's pass thru to the supplier is 70%. If Apple gets 30% of the retail cost, Amazon's wholesale cut is 70% of which the pass-thru is 70% of that (~49% overall which is pretty close to the retail norm). If Amazon has any contracts that preclude that those items would rightfully be excluded from iOS in-app purchases by Amazon just not displaying them at all in-App. There is no scenario where Amazon will be forced to sell something and never get anything for the trouble. That's just a sloppily constructed, quite broken, bad example.

Yeah, but you conveniently miss the mention of the quoted professor that outlined several ways that this likely isn't an anti-trust problem.

The accurate way to summarize the article is -- WSJ examined the anti-trust issues and the expert professor outlined both sides of the issue with compelling reasons why it probably isn't an actual anti-trust problem.

You're right you are a outright troll. Any idiot which cones into a conversation and says ~ If you don't agree with me you are a ____________~ is a worthless troll.

The rest of your post is poorly crafted bashing that ignores the totality of business reality. I won't even dignify it with quoting it.

Because maybe they sell $90Million with an App too.

Shhh! Don't rock the trolls with their own logic!

The analogy breaks when you try to go two levels down and past the target of the real world. The discussion is on in-App purchases of subscriptions. The broken second step is that I have yet to see anything that actually states Apple is asking for 30% of every other transaction Amazon or any other online retailer makes. Your statement makes for a nice alarming sound-bite, but it's not what is going on.

This is just a rehash of earlier naive reasoning, the rebuttal is: post 258 this thread

It's a long thread so I won't harangue you for missing it. Your missing dollar is essentially an advertising cost for a wider market exposure.

Apple have always promoted Web apps as the simple free un-curated way to get onto iDevices.

But publishers who *want* to monetize their content will benefit from going through the app store.

70% of a lot is often a lot more than 100% of nothing.

C.

Because there is no argument against utterly broken logic. His post failed of its own weight and attempted narrow definitions that ignore how business really works. When you cherry-pick the assumptions you can say all kind of crazy and stupid things.

I love how anyone who disagrees with a move Apple makes is a troll. I have some different metrics to determine who's trolling. One of them is more than 3 consecutive posts and yet you've done TEN (10!) consecutive posts?!?!

Seriously, that's more than I've ever seen tekstud (or any of his subsequent user names) use. Use multi-quote next time.

As an aside, the Kindle example hardly applies. Apple still only allows one music store on iOS and that's iTunes and just like iTunes will accept any DRM free mp3, the kindle will accept any DRM free eBook it can read as well. We're discussing a much broader topic than one content store. We're talking about an entire development platform, something that Amazon is just getting into with the Kindle.

How about this one?

IAP issue sells for $10.
Apple gets $3
Publisher gets $7.

That seems to be the best deal for the publisher!

C.

Not if your other costs are greater than 70% of the sale.

It may be a good deal for publishers who want to get in on iOS sales without developing a cross platform service, but it's a bad deal for cross-platform services who already have to operate their own payment and subscription infrastructure for purchases outside iOS.

It really does.

Apple have created a general purpose device which is capable of all sorts of content.
Amazon have created a less flexible device - which is essentially locked to their bookstore.

Amazon have not opened their device to rival vendors at all. Why should they? They have designed built and executed a platform for their content - and their business model.

They know exactly how hard it is to do this.
It's kind of odd to suggest that they should be able to sit on Apple's coat-tails and suddenly get a free ride.

C.

Could you describe a scenario like this?

C.

The oft mentioned Amazon comes to mind.

70% to publishers, 30% to Apple, Amazon left footing the bill for hosting the content. Then there's Rhapsody who's already stated that they would lose money in this scenario. Coming up with other examples would require more digging than I'm willing to do.

You're right that a lot probably still would make money, but 30% is way too much for the service they're providing. Google will do it for 10% and still give them some subscriber information. Why can't Apple also do it for 10%, but side with the consumer and keep subscriber information? If it was 10%, I still wouldn't like the idea that it is forced, but at least the terms would be reasonable.

Lastly, if Apple really wants to provide an appealing service they have to bring the iTunes payment system outside of iTunes and iOS. With Apple forcing app developers to use the iTunes payment system, any cross platform service has to use at least two different payment systems which is hardly convenient or cost effective. It would be pretty damn convenient for the customer too.

If a publisher with an e-book goes to Amazon they'll gain access to all of Amazon's Kindle readers - and that's great.

But when Amazon re-pushes the content to the iPad, they are not really adding much value. If I were a publisher, I'd be much more tempted to take my content to the iPad directly. Why share revenue with Amazon?

Whatever Amazon chooses as a business model, it's really not Apple's job to support it.


Prices are never really based on costs. They are based on market value. The value of the App store is not hosting, or payment services. The value derives from the massive and eager customer base. As I said before, 70% of a lot is often more than 100% of not very much.


It's this part, I don't think I fully understand. If one leg of your cross platform is web delivery, surely you can avoid apps altogether and deliver it to the iPad via a web interface?

If you absolutely and definitely must use the app store for your paid content, then surely you should pay for that?

C.

So we are back to the model of buying a book for every device we own? Great, I thought everyone said Apple was there for the consumer. Amazon does has a web app in the works though, so all is not lost. I doubt we'll see the app remain in the app store, which sucks since it won't allow for offline reading, but at least I won't need to consider an iBooks version too.

The Kindle App sold a lot of iPads. You say it's not Apples job to support it, but not providing reasonable terms to Amazon could have a much greater impact on their bottom line. I don't think the web app will be as successful for selling iPads, but Amazon has no reason to take a loss just to have a native app on the iPad.


Google says the market value of such a service is 10% and their service is even better because it is cross-platform (I do wish they kept subscriber information private though).



Native apps can offer a superior experience to web apps. Yes, they could offer content on the web and I suspect many will because of these changes. I'm not sure why I should be looking forward to an inferior experience just because Apple got greedy.


But should they pay 30% though? Every iOS developer already pays $99 a year for access to iOS and in turn Apple gets a bunch of free apps that sell their iOS products for them. Apple doesn't get a commission on every piece of Mac OS software sold and every subscription sold within it, why should they get it for iOS?

Now they do get 30% for products downloaded through the Mac App Store and the iOS App Store (and the App Store happens to be the only way to install a program on iOS) but that's fair because they are providing the apps and updates to customers as well as processing payments. With subscriptions they are not doing that, they are merely processing the payments, yet they are telling developers that they have to enable in-app payments and subscriptions if they want to remain in the iOS App Store. Would that fly in the Mac App Store? Absolutely not. The big players would leave. Even with the limitations that web apps bring, I'd expect many to leave the iOS App Store.

This isn't about whether or not Apple deserves to be paid. Clearly they do, and they are being paid already. It's about whether or not they deserve to be paid what they are asking for and whether or not the tactics used to acquire these payments are appropriate? My answer to the last two questions would be no.

There's been no shouting about trolls. But he's trolling. There's no doubt about that. He may even be correct about a point or two, but that doesn't change the way he went about it.

It was difficult to tell where he was going with that post which is why I asked him to define it, which he did properly, and tell us how this related to our discussion here. It did look to me as though he was stating that Apple was a monopoly, and abusing it.

He didn't get to the second part.

Consecutive posting has nothing to do with trolling. There are some who like to read ALL the posts in a thread. I often do that as well. But if you can't get to the thread more than once or twice a day, and it's a very active thread, as this one is, you might be posting responses to a lot of others when other posters are not as active, and so your posts pile up, one after the other.

A troll is someone who starts a post by accusing others of being fanboys if they don't agree with his "obvious" correctness. Often the troll doesn't bother to respond to posts disagreeing, but sits back at the computer screen basking in the light of the annoyance he's caused.

About the Kindle remake you've made; of course it matters! If Apple didn't allow any other book sellers in the App Store, this issue wouldn't have come up in the first place.

I don't own a Kindle reader, but like most people, I prefer the Kindle app, because it actually has books in it. I don't think the Kindle app will leave the iPad. But I can see Amazon having to rethink it's revenue sharing model.

And in the longer term, I can see more publishers placing their content in the iBooks store, because it's a better deal for them.


The Kindle device is a lot cheaper than an iPad. A lot. So if people *did* buy the iPad just to read books, they probably are not very cost-conscious.
It'll be interesting to see what Amazon do. They already know how much money they are making from the iPad.


iOS developers find that Android apps generate about 1/5 the revenue of iOS apps. They have to have lower rates, because they are delivering less revenue.



I think the word "greedy" in any business context is pretty unhelpful.
Are Microsoft greedy for wanting a 70% share of XBLA revenues? Are Sony greedy? Are Amazon greedy for keeping their Kindle reader to themselves?

That superior experience is a direct consequence of Apple's investment in this platform. If you want to take advantage of it, you pay. If you don't want to, no charge. Every business looks to monetize its investments. You can call that greed if you want, but it's pretty universal.


That $99 doesn't cover the processing cost for a submission of a single version of a single app. App submissions are free with Apple. Submit a game to Sony, and each submission will cost $1000s.

The iPad is a curated platform and them's are the rules. If it's a bad idea, it won't work. If it's a good idea, then developers, Apple and consumers all benefit. Market forces are quite Darwinian in how they weed out the weak and unfair ideas.


It'll be interesting to see what happens.

Like I said earlier, I think this will be an improvement for consumers and for publishers. The only losers are middle men, who want to exploit the platform for free. They may go, but I am not sure they'll be missed.

C.

Hulu won't be missed? Netflix won't be missed? Amazon outsells iBooks by a ridiculous margin, they won't be missed? I'm not saying all these services are leaving, but they definitly would be missed if they did.

This isn't just about "middle men" either. If Fox decides to stream their channels online for a fee, are they a middle man? This affects everyone who wants to sell video, text, music, or any other content across multiple platforms using services other than Apples regardless of whether or not they are distributing it on behalf of themselves are a third party.

Publishers of content are used to paying far more than 30% to get access to market. For publishers its a no-brainer.

The accountants look at the spreadsheet.

Accountant 1: How much money will we make on the iPad using the app store?
Accountant 2: Amazingly it will be 100Million dollars, minus Apple's cut, that's $70M.

Accountant 1: Really? And how much will we make if we withdraw from the stupid platform.
Accountant 2: (punches buttons) errmmm...hold on. (more taps)... Zero dollars!

Accountant 1: Interesting! I reckon we go on the App store.

C

We don't know if that would happen. People keep forgetting that this entire business model is just beginning. In the beginning, we couldn't lend books at all, now we can, to a limited extent. But we can move it from one of our own devices to another, if we buy from iBooks, for example. It's all still evolving, so we can't say what you did and know that it would be the case.


I'm reading that here as well, and I don't see anyone proving it's true. Book reading on the iPad is an important activity for some, but I haven't yet seen figures quantifying how much the Kindle or Nook apps affect sales. Until we do, it's just a guess, nothing more, and can't be stated as fact.

You also don't know Amazon's numbers, so that's all a guess as well.


First of all, I haven't seen conformation that Google will charge anything. So we can get that out of the way for now. That was just something said by someone who claimed to know.

But either way, it says little. Google is obviously doing this as a reaction to what Apple is doing. They need to offer much better terms, because as is well known, Android users are very adverse to paying for anything. That includes apps, games, content, etc. How will publishers make money on Android users who don't want to pay for it? Will advertising cover all their costs? Doubtful.

Even as far as Ad dollars are concerned, a new report says that iOS users are more valuable than Android users. What a surprise!


I agree with what you've said except the part about greed. We know that Apple makes very little profit on the 30% they charge. That's not greed. That's wanting to cover their expenses, and insure that they do by running slightly in the black. Every company should be doing this. You may be unhappy about what Apple is doing, but don't try to characterize it that way, because you know it's not true.


One thing has nothing to do with the other. It costs Apple a lot of dough to run the developer program, and so they charge for that. It costs Apple a lot more to run iTunes and the App Store within, so they charge all those who are charging within it. I don''t see a problem with that.

And as Apple only gets paid for about 20% of what they host, a 30% fee to those who are making money must cover ALL the apps, free or not, which makes the percentage overall, very small. If companies think they can make money in Apple's stores, they will be there. If they don't think so, then they won't. If Apple can work it out so that lesser fees are charged, then fine, if not, then fine.

I'm not in favor of the new rules about the requirements for in app purchasing for books and such, and I've stated that in an earlier thread about this. But I understand why Apple is doing it, and it benefits their customers, and Apple is all about that. Not all developers are against these new rules either. It's not a unanimous thing.


That's not likely correct either! If the subs are in the app store, and you download an update, where do you think that comes from? The app store! It doesn't come directly from the publisher. The update notifications come through the app store, and that's where the download is also coming from. Just think about it.


it seems as though you are questioning whether they should be paid. The amount is because they are a business and not a charity. If a company offers a newspaper Ot magazine, as a number have been doing, that is free, than Apple takes nothing, even though it's costing them. Why should those demanding money not have to pay what everyone else is getting?

As far as books go, it's more ticklish, but Apple want the consumer to have an equal experience across all buying apps. The amount of profit they're going to make here is trivial.

I love your logic. "They still make money, so it's alright"

In my example, Fox would probably go with a web app, but that's neither here nor there. They would not find Apple's terms reasonable.

The greed part applied to the new subscription charge. That is almost pure profit relative to their income from apps now. EDIT: Perhaps the greed is really just a desire for consistency (30% across the board) and cooler heads will prevail. The service they are providing is not worth 30% from my perspective.


This is a "problem" associated with all free apps. No need to single out subscriptions. A lot of free apps use AdMob ads to generate revenue. Does Apple deserve 30% of that too?

The only reason that publishers recognise is the figure at the bottom of the sheet.
70% of a lot will always win over 100% of not very much.

C.

It's not about whether they would be missed. Of course they would. But what would the actual impact be? I think it would be small, not large. It would be disconcerting though.

But I think they will work with it. It's interesting that neither Amazon nor B&N has yet commented. So they must be evaluating it, working with the numbers, and even possibly talking to Apple.

I also suspect that the 30% figure is not actually carved on a tablet of stone and carried down from the summit of Mount Cupertino by the Lord Jobs himself.

C.

I wouldn't miss Netflix (or Hulu). Watching video on the tiny screen just isn't something I really care much about. I rather lose the Netflix rather than have them raise the price on me to cover the 30%. Netflix has already raised their prices since they started added titles to streaming.

Companies have a long time before they have to do anything. June 30 is months away,

I'm hoping they're planning a joint press conference to announce their removal from the app store on June 30th. It's unlikely, but that's what I'd like to see at this point (not that I want to see them go, I just want to to see Apple pressured into revising their terms into something more fair).

This is where it gets annoying. You know nothing about the numbers at all. That's pretty obvious, as Apple and financial people have all said that Apple runs the store at a very small profit. Apple will be hosting this software, and will be using bandwidth to send it, all of which they pay for. If a magazine or book is ordered sighing Apple's system, that will happen, you are simply making this up to suit your argument, but it's wrong.

I don't even mind if you say that "you think" Apple is greedy for doing this. Then it's pretty clear that it's just your opinion. But when you state it as fact, it's something else. It's not a fact. It's even wrong.


Yes, I said it applies to all apps. And Apple is acting as an Ad agency. In fact, it owns an Ad agency. I worked for a big one a long time ago. And so yes there as well. Ad agencies always get paid for their work. Apple is very involved in all the Ads placed from within iADs. You think Google isn't getting paid for all the Ads on Android? They make, according to a report recently, 97% of their money from Ads. Do you object to that as well? If not, why?

Communism is a political system too .... try "earning your fortune" under it.

Well, that's just silly! You don't like what Apple is doing, so you hope that everyone else agrees with you as well. Fine. But what if Amazon and B&N have it worked out to their satisfaction? You want them to leave anyway just so you can be proved right? That's a numbskull idea!