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Apple's App Store subscription rules spark anti-trust concerns as developers rage

post #1 of 172
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A new report claims Apple's just announced iOS App Store subscription policy may expose the company to an antitrust investigation, even as developers, publishers and distributors have responded negatively to the terms, with one company hinting at possible legal action.

After announcing App Store subscription services at a media event with News Corporation earlier this month, Apple revealed the details and terms of the new service on Tuesday. Apple's terms forbid publishers from including links to external websites to purchase content or subscriptions and require publishers to offer in-app deals equal to or better than the same deals offered outside of the app.

Apple CEO Steve Jobs explained the new subscription rules. "Our philosophy is simple when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," said Jobs. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."

Antitrust issues

According to several law professors contacted by The Wall Street Journal, Apple's new subscription service could "draw antitrust scrutiny."

Antitrust professor Shubha Ghosh told The Journal that his "inclination is to be suspect" about the new service. At stake is whether Apple has a sufficiently dominant market position to block competitors and whether it is exerting "anticompetitive pressures on price," Ghosh said.

However, proving Apple is indeed a dominant market player could be a difficult task. Publishers could claim that Apple's share of the tablet market makes its subscription service terms anticompetitive. In response, Apple could argue that the market includes all digital and print media and the disgruntled publishers are free to utilize other outlets to reach their customers.

"Millions will be spent litigating how broad the market is," said Herbert Hovenkamp, an antitrust professor at the University of Iowa College of Law, adding that the most likely definition of the market would be digital media.

Though Hovenkamp doubts Apple has enough of a dominant position in that market to prompt an antitrust investigation, he noted that if Apple reaches 60 percent or more of all digital subscriptions, "an antitrust challenge would seem feasible."

According to Ghosh, Apple could defend itself by coming up with a "business justification" for its subscription terms, as courts often look for legitimate business reasons for actions that are accused of being anticompetitive.

Developer, publisher ire

Meanwhile, initial developer, distributor and publisher response to Apple's subscription details announcement has been overwhelmingly negative, with some publishers objecting to Apple's 30 percent revenue share, while others have expressed frustration over Apple's terms that require subscriptions to be sold through Apple for the same price or less as that of third-party websites.

Digital music subscription service Rhapsody issued a statement Tuesday calling Apple's 30 percent cut of subscription revenue "economically untenable," Engadget reports.

"The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple's 30 percent monthly fee vs. a typical 2.5 percent credit card fee," the statement read.

Rhapsody also hinted at potential legal action in response to Apple's policy. "We will be collaborating with our market peers in determining an appropriate legal and business response to this latest development."

Responding to Apple's announcement, Marco Arment, creator of the popular Instapaper app, called Apple's requirement of matching subscription prices through iTunes "a huge dick move" in a post to Twitter on Tuesday.

Forbes reports that the Online Publishers Association, which includes publishers such as Time, Hearst, Conde Nast, Bloomberg and Forbes, is worried that Apple's policies don't provide sufficient flexibility for both publishers and consumers.

Apple has reportedly issued a compliance deadline of June 30 for apps already available in the iOS App Store. Earlier this month, Sony revealed that an e-reader application it had submitted to Apple's App Store had been denied, prompting speculation that Apple had changed its rules regarding in-app purchases. Apple denied the claim by saying that it was merely enforcing pre-existing guidelines.

Prior to Apple's announcement offering details of its subscription service, several consortiums of European publishers had expressed concerns over Apple's subscription service, with some publishers feeling "betrayed" by Apple's policies. Last month, Belgian economy minister Vincent Van Quickenborne requested an antitrust investigation of Apple over possible anticompetitive maneuvers in the newspaper market.
post #2 of 172
Quote:
Originally Posted by AppleInsider View Post

"Our philosophy is simple when Apple brings a new subscriber to the app, Apple earns a 30 percent share - in perpetuity on all future revenue; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,"

I have adding some omitted words into that press release.
post #3 of 172
One more time publishers:
YOU CAN STILL SELL YOUR STUFF HOW YOU ARE DOING IT. YOU JUST HAVE TO ADD THE OPTION OF SELLING IT THROUGH APPLE.
YOU DON'T HAVE TO SELL THINGS ON THE APP STORE. REALLY. IF YOU DON'T LIKE IT, DON'T SELL THERE.

If you want to tap into a market made by Apple, you need to give them their due.
post #4 of 172
It's not "Developers ire", but the publishers. Two different types of folks.

iPhone developers think the App Store guidelines are just fine. As a consumer, to have all financial transactions go through one player just makes it easier instead of dealing with multiple sites.
post #5 of 172
Apple being dickish while being on top. Go figure.

Hey, sflocal, Instapaper app isn't published by a "publisher", but by a developer. Go read what he thought about the move.

This only proves what I have always suspected. Had Apple dominated the nineties, it would have been ten times worse than Microsoft's domination. Not that I liked it anyway.
post #6 of 172
Everyone is flinging accusations of antitrust across the Internet. Where is the monopoly? Who is the competition that's blocked by Apple demanding 30%?

Inigo Montoya: You keep using that word. I do not think it means what you think it means.
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post #7 of 172
As a consumer I like the in-app purchase model more, than to being kicked out of the app and go to some other websites to enter my credit card credentials.
post #8 of 172
Quote:
Originally Posted by studiomusic View Post

One more time publishers:
YOU CAN STILL SELL YOUR STUFF HOW YOU ARE DOING IT. YOU JUST HAVE TO ADD THE OPTION OF SELLING IT THROUGH APPLE.
YOU DON'T HAVE TO SELL THINGS ON THE APP STORE. REALLY. IF YOU DON'T LIKE IT, DON'T SELL THERE.

If you want to tap into a market made by Apple, you need to give them their due.

Yeah, and please do not be furious about all this, since you shouldaveknown better than investing your money and time in building apps for the app store, that we would make this kind of dickish moves arbitrarily and with no pre warning.

Because ah, what are 30 percent anyways? It's not as if you lost all the margins in ...? Oh, you did? Oh poor developers/publishers... so I guess you won't make it to have your shops in our app store, now will you? Oh look, our iBook app is so lonely there, and turning such a great profit! I wonder how so suddenly apple got a 100% market share in book publishing inside iOS...
post #9 of 172
Quote:
Originally Posted by sflocal View Post

It's not "Developers ire", but the publishers. Two different types of folks.

iPhone developers think the App Store guidelines are just fine. As a consumer, to have all financial transactions go through one player just makes it easier instead of dealing with multiple sites.

Devs don't have much of a choice but like it. 70% of something is better than 100% of nothing. They need Apple to get them customers. Publishers on the other hand already have customers. Would you want to give up 30% revenue on customers you already have?
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post #10 of 172
Simply put, most large scale businesses don't have a 30% profit margin, and even fewer would be as sustainable if they just decided to give it away to Apple. And because of their rules, especially the one requiring the price on a publishes website to be the same as the one in-app will lead to one of to things: a) prices raised for everyone (even if you don't own an iDevice) or b) a huge cut in profit that will eventually lead to c) developer pulling out of the App Store.

In none of these conditions are consumers the benefit. You'll either pay higher prices to have content or not get content on your iDevice. I don't see why anyone would realistically support this.

I can understand Apple making money if you used their resources from their servers, but besides downloading the app, most stuff is handled by a publisher on their servers. If they wanted more money to support their ecosystem, they could not have free apps or increae the cost of the developer program. If they were breaking even before on their 30% cut on apps, surely they'd be making gobs of money when these rules go into effect.

And that shows you it's just a money grab for Apple and Apple alone.
post #11 of 172
Quote:
Originally Posted by LuisDias View Post

Yeah, and please do not be furious about all this, since you shouldaveknown better than investing your money and time in building apps for the app store, that we would make this kind of dickish moves arbitrarily and with no pre warning.

Because ah, what are 30 percent anyways? It's not as if you lost all the margins in ...? Oh, you did? Oh poor developers/publishers... so I guess you won't make it to have your shops in our app store, now will you? Oh look, our iBook app is so lonely there, and turning such a great profit! I wonder how so suddenly apple got a 100% market share in book publishing inside iOS...

I agree it's not generating good-will to change the rules. And 30% sounds like a lot, whether it is or not. But people need to explain WHY it's antitrust if they're going to start screaming the word. Including the quoted professor.

That said, the app store is new territory for the tech industry. As are subscriptions. Like it or not the rules are going to change. Would they expect Apple to operate at a loss so they didn't have to change the rules?
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post #12 of 172
Quote:
Originally Posted by walshbj View Post

Everyone is flinging accusations of antitrust across the Internet. Where is the monopoly? Who is the competition that's blocked by Apple demanding 30%?

Inigo Montoya: You keep using that word. I do not think it means what you think it means.

Well put.


Everything Apple brings out emotions...

Time will tell.
post #13 of 172
This is the problem as I see it. Say Apple thinks that taking a smaller cut would be reasonable in subscriptions. I don't know that they do. But say they did.

Say it was 15%. Within five minutes, 90% of developers would retool their app to say they were a subscription. How would you define 'subscription' so clearly that you could keep that from becoming the biggest fiasco in Apple's history? I suspect they've decided that uniformity is the way they have to go.
post #14 of 172
Quote:
Originally Posted by dagamer34 View Post

Simply put, most large scale businesses don't have a 30% profit margin, and even fewer would be as sustainable if they just decided to give it away to Apple.

I hate to tell you, but the margins in the real world are easily 50% at the retail level. You pay a LOT when you buy something at a retail store. This covers the rental space, staff, inventory costs, etc.

Publishers pay quite a bit to those who sell subscriptions. I dare say that it is more like 60% of a subscription is paid to the company getting the subscription, not the magazine. Just think about how you can get reasonable pricing for subscriptions through fund raisers for schools, and the school still gets a great profit.

Apple is following the market trend that bringing a customer to the table is worth 30%-50% of the sale. Seems quite reasonable if you actually understand what value they are bringing: paying customers.

The cost to get those customers with advertising, etc, is a substantial cost for businesses. With iOS apps, that cost is dramatically reduced (but you still need to advertise your app to get good penetration in the market).
post #15 of 172
So somebody correct me here:

What's wrong with devs/publishers upcharging an app/subscription by 30% in the App Store, but offering a coupon code on their own individual websites that discounts the purchase price (but only through them?) Then technically they would be offering the same good at the same price in the App Store, but not be taking a hit.

It doesn't have to work exactly this way, but do you see my point? And if consumers found out about this (which they certainly would), the devs/publishers wouldn't even have to have a hyperlink in their own app-- we'd find it ourselves.

Just a thought.
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post #16 of 172
Quote:
Originally Posted by walshbj View Post

I agree it's not generating good-will to change the rules. And 30% sounds like a lot, whether it is or not. But people need to explain WHY it's antitrust if they're going to start screaming the word. Including the quoted professor.

That said, the app store is new territory for the tech industry. As are subscriptions. Like it or not the rules are going to change. Would they expect Apple to operate at a loss so they didn't have to change the rules?

How is Apple operating at a loss? They didn't develop the app nor the content. Android tablets could have substantial gains against the iPad if publishers put there weight behind it.
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post #17 of 172
Quote:
Originally Posted by evolvingmunki View Post

So somebody correct me here:

What's wrong with devs/publishers upcharging an app/subscription by 30% in the App Store, but offering a coupon code on their own individual websites that discounts the purchase price (but only through them?) Then technically they would be offering the same good at the same price in the App Store, but not be taking a hit.

It doesn't have to work exactly this way, but do you see my point? And if consumers found out about this (which they certainly would), the devs/publishers wouldn't even have to have a hyperlink in their own app-- we'd find it ourselves.

Just a thought.

Same or better offer for th app. It doesn' matter how you get to the lower price, if it is available on the outside site, the app price can't be higher.

These folks need to get over it. When you join the program you agree to give Apple 30%. The in app rule has been around for a while so they should have been expecting enforcement. And they also agreed that Apple can change the rules whenever they want. If they don't like the rules, get out.

Apple has tons of lawyers. If there was a real chance for anti-trust they will have already dealt with it. After all this is not the first time this has been tried since the whole store started (or even the phone for that matter)
post #18 of 172
Quote:
Originally Posted by dasanman69 View Post

How is Apple operating at a loss? They didn't develop the app nor the content. Android tablets could have substantial gains against the iPad if publishers put there weight behind it.

I didn't say they were operating at a loss. Just asking what if the tables were turned.

And you're right, everyone is free to go to Android and their very significant market share. Making all this antitrust talk even more senseless.
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post #19 of 172
Quote:
Originally Posted by Ronbo View Post

This is the problem as I see it. Say Apple thinks that taking a smaller cut would be reasonable in subscriptions. I don't know that they do. But say they did.

Say it was 15%. Within five minutes, 90% of developers would retool their app to say they were a subscription. How would you define 'subscription' so clearly that you could keep that from becoming the biggest fiasco in Apple's history? I suspect they've decided that uniformity is the way they have to go.

Highly unlikely. Their sales would be hurt significantly by a subscription model. It's easy to get someone to pay $.99 for a app but $.99 a month would be a deal breaker for most so any retooling would just be them shooting themselves in the foot.
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post #20 of 172
Apple works hard to create and maintain the ecosystem.

Publishers are much better positioned to make money within the ecosystem.

Any good publication will be better off with 70% within the ecosystem than with 100% outside of the ecosystem.

The early adopters will make a killing. (Just ask News Corp)

In any case, the publishers have a choice to be in or out.

Time will tell.
post #21 of 172
I understand Apple's desire to have a cut of all commerce that takes place via iOS, but I disagree with this move on many levels. Ironically I think iOS app store just needs to be made identical to the OS X App Store.

First developers ought to be able to sell apps AND price them however they like both inside and outside the app store for iOS the same os OS X. I think it just ridiculous for Apple to try to control pricing in either spot. I do however think it's fair for Apple to charge whatever commission they like for sales that occur through the app stores.

Second, publishers ought to be able to sell subscriptions both inside and outside the app at whatever price they see fit. Again, I think it's fair for them to charge whatever commission they like for purchases made through the app store, although I think 30% is excessive for on ongoing model.
post #22 of 172
People need to recognize that there are three different constituencies: developers, publishers and distributors. It is important that these groups not be conflated since their interests are different with the exception that they would all, of course, like to take 100% of their products' selling price.

Most developers have little problem with the current 30% revenue share given to Apple. Apple has delivered more customers and in many cases (e.g., Pixelmator) eliminated the need for them to maintain a e-commerce site.

Publishers will have a range of reactions. The truth is that many publishers can afford the 30% revenue share if their selling price has not been lowered to reflect the elimination of all physical distribution cost. However, I am still not convinced that Apple deserves a 30% share, even allowing for the platform argument. IMO, Apple should lower their share to reflect that their primary service is providing payment processing plus some remuneration for "merchandising" (basically hosting the app). Again, IMO, 5-10 percent is more than generous and Apple would be generating a steady on-going revenue stream. I doubt most publishers would have a problem with paying this amount. Apple could offer other merchandising programs to highlight content from specific publishers and be paid accordingly for that service.

The final group is distributors like Amazon, Hulu Plus, Netflix, B&N, Rhapsody and others. Many of these will only be receiving a 30% (maybe less) revenue share from the publishers they represent. That means that they would be handing Apple their full profit (or maybe generating a loss). Significantly, these are the very same companies that are in direct competition with Apple's services (iTunes Store, iBookstore). I really have no suggestion of how to fairly address these other then allowing them to operate exclusively outside the App Store but that may not be good for the iOS platform (especially as these products are made available on competing platforms.).

The cynical side of me thinks that Apple is trying to force these apps out of its ecosystem. I bet Apple would love to go to Random House and say "your products are not available to the huge number of iOS users because no one is selling them in the App Store. Why don't we talk some more about the iBookstore." This upsets me becauseI am not, by nature, a cynical person yet here I am contemplating this possibility.

I really think that the subscription model and dealing with other distributors/retailers has not been thought out well. I think Apple needs to be more reasonable - willing to take a small portion of a much larger number of transactions.
post #23 of 172
Quote:
Originally Posted by AppleInsider View Post

Responding to Apple's announcement, Marco Arment, creator of the popular Instapaper app, called Apple's requirement of matching subscription prices through iTunes "a huge dick move" in a post to Twitter on Tuesday.

That's an understatement. So what happens when Google and Microsoft/Nokia get their crap together and developers tell Apple to go fuck themselves? Just when you think Apple has learned the lesson of the last platform war they lost, they pull this crap. Does Apple want to sell iPhones and iPods or do they want to get 30% cuts on Kindle books? Cause they can't have both. Amazon can't make enough money and still compete with iBooks with the 30% cut. So the Kindle app goes, and small outfits like Instapaper go, and pretty soon its 1997 all over again.
post #24 of 172
Wasn't it just a few months ago that Apple said they would be relaxing App Store rules? Can they not make up their minds?
post #25 of 172
I can see why publishers are reluctant to do things Apple's way. Has iTunes been the saviour to the music industry? No. Sales were at a all time low last year despite millions of iPhones, iPods and iPads being sold.
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post #26 of 172
I've been following Apple since before the iPhone. One thing I have discovered is they do nothing that hasn't been calculated in advance. That means that they have had their legal team review this to the point of bulletproof. They have also run models that show that 30% is the "sweet spot" for profitability. They also invest billions into new products and marketing the app store. I think that publishers will be foolish to avoid the App Store. New media businesses will emerge and the old newspapers will wonder what happened. They failed to act. This won't be too surprising given their track record.
post #27 of 172
Quote:
Originally Posted by cwoloszynski View Post

I hate to tell you, but the margins in the real world are easily 50% at the retail level. You pay a LOT when you buy something at a retail store. This covers the rental space, staff, inventory costs, etc.

Publishers pay quite a bit to those who sell subscriptions. I dare say that it is more like 60% of a subscription is paid to the company getting the subscription, not the magazine. Just think about how you can get reasonable pricing for subscriptions through fund raisers for schools, and the school still gets a great profit.

Apple is following the market trend that bringing a customer to the table is worth 30%-50% of the sale. Seems quite reasonable if you actually understand what value they are bringing: paying customers.

The cost to get those customers with advertising, etc, is a substantial cost for businesses. With iOS apps, that cost is dramatically reduced (but you still need to advertise your app to get good penetration in the market).

While I agree, there is a problem if the publisher has lowered the cost of his digital product to reflect the lower costs of digital distribution. In this case, the publisher may already be operation at the same margin he was receiving in the physical distribution channel.
post #28 of 172
Most magazine apps are free for the first issue or have a 'reader' App that is free. Where do publishers expect Apple to make money if they are only providing free hosting and bandwidth for each and every issue while the company is taking all the money via their credit card billing/website?

The publishing companies better get with the program or they will be where the record companies where when music went digital.

Personally I hope they all cling to the outdated model and content they have and we get some new and original players in the market!

Also people who are complaining that most companies don't have a 30% profit margin have got it all wrong... the 30% Apple takes will be replacing existing distribution/printing costs.
post #29 of 172
Quote:
Originally Posted by penchanted View Post

People need to recognize that there are three different constituencies: developers, publishers and distributors. It is important that these groups not be conflated since their interests are different with the exception that they would all, of course, like to take 100% of their products selling price.

Most developers have little problem with the current 30% revenue share given to Apple. Apple has delivered more customers and in some cases (e.g., Pixelmator) eliminated the need for them to maintain a e-commerce sight.

Publishers will have a range of reactions. The truth is that many publishers can afford the 30% revenue share if their selling price has not been lowered to reflect the elimination of all physical distribution cost. However, I am still not convinced that Apple deserves a 30% share, even allowing for the platform argument. IMO, Apple should lower their share to reflect that their primary service is providing payment processing plus some remuneration for "merchandising" (basically hosting the app). Again, IMO, 5-10 percent is more than generous and Apple would be generating a steady on-going revenue stream. I doubt most publishers would have a problem with paying this amount. Apple could offer other merchandising programs to highlight content from specific publishers and be paid accordingly for that service.

The final group is distributors like Amazon, Hulu Plus, Netflix, B&N, Rhapsody and others. Many of these will only be receiving a 30% (maybe less) revenue share from the publishers they represent. That means that they would be handing Apple their full profit (or maybe generating a loss). Significantly, these are the very same companies that are in direct competition with Apple's services (iTunes Store, iBookstore). I really have no suggestion of how to fairly address these other then allowing them operate exclusively outside the App Store but that may not be good for the iOS platform (especially as these products are made available on competing platforms.).

The cynical side of me thinks that Apple is trying to force these apps out of its ecosystem. I bet Apple would love to go to Random House and say "your products are not available to the huge number of iOS users because no one is selling them in the App Store. Why don't we talk some more about the iBookstore." This upsets me becauseI am not, by nature, a cynical person yet here I am contemplating this possibility.

I really think that the subscription model and dealing with other distributors/retailers has not been thought out well. I think Apple needs to be more reasonable - willing to take a small portion of a much larger number of transactions.

Well written and Apple will sell lots of devices in the process.
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post #30 of 172
Quote:
Originally Posted by charlituna View Post

Same or better offer for th app. It doesn' matter how you get to the lower price, if it is available on the outside site, the app price can't be higher.

These folks need to get over it. When you join the program you agree to give Apple 30%. The in app rule has been around for a while so they should have been expecting enforcement. And they also agreed that Apple can change the rules whenever they want. If they don't like the rules, get out.

Apple has tons of lawyers. If there was a real chance for anti-trust they will have already dealt with it. After all this is not the first time this has been tried since the whole store started (or even the phone for that matter)

The real issue here is whether Apple's actions will chase partners out of the App Store (and into competing ecosystems). Thinking that Apple is invincible will be a real mistake. IMO, all sides can agree on a more equitable solution.
post #31 of 172
Quote:
Originally Posted by studiomusic View Post

One more time publishers:
YOU CAN STILL SELL YOUR STUFF HOW YOU ARE DOING IT. YOU JUST HAVE TO ADD THE OPTION OF SELLING IT THROUGH APPLE.
YOU DON'T HAVE TO SELL THINGS ON THE APP STORE. REALLY. IF YOU DON'T LIKE IT, DON'T SELL THERE.

If you want to tap into a market made by Apple, you need to give them their due.

I think it's more about the percent than anything. If you look at book, movie and music providers and sellers, they have other fees to pay for the rights to the content.

Let's say the fee is 5% (which is high), that's equivalent to about 6 people that have to brought the traditional way vs through an app. (for 2.5%, it's about 12 people) Think about it, Visa or MasterCard can't charge 30% for a single transaction, so why should Apple be able to? Yes, Apple should get a fee, but why not be nicer to content providers that have to pay for their content?

Apple why not try at 95/5 format, it's a lot more reasonable!

It might not be a problem if Apple wasn't in the music, movie, tv show and book business, the companies who are mostly affected by this fee. If this isn't anti-trust then what is?

Right now, it's a little to soon to tell, but give it time and Apple could dominant the market, especially with all the rumors about new devices coming out. Most of these content providers (if not all) provide service to the Mac App Store, so if Apple's not stopped, it's only a matter of time before they add it to the Mac App Store or tell cell phone providers they want more.

You see where I'm going? If we allow Apple to do this to the iOS app store, it's only a matter of time before other companies start want to do the same thing and we pay more for the services we currently get.

It's time to tell Apple and others who may follow, they cannot charge unreasonable rates for providing the transaction! It's fair to charge a fee, but a more reasonable fee.

The results will set a precedent and we don't want the wrong one set!
post #32 of 172
Quote:
Originally Posted by shadash View Post

That's an understatement. So what happens when Google and Microsoft/Nokia get their crap together and developers tell Apple to go fuck themselves? Just when you think Apple has learned the lesson of the last platform war they lost, they pull this crap. Does Apple want to sell iPhones and iPods or do they want to get 30% cuts on Kindle books? Cause they can't have both. Amazon can't make enough money and still compete with iBooks with the 30% cut. So the Kindle app goes, and small outfits like Instapaper go, and pretty soon its 1997 all over again.

I'm a developer who's making both iOS and Android apps. It's not the developer who makes the decisions. It's the end-user. As long as Apple holds the mind share of the public, they are going to have a lot of users. If Amazon, Instapaper and the like leave, they are shooting themselves in the foot. I think they understand this. It's going to take at least a year for the MS/Nokia deal to produce anything and by then Apple will be further ahead.
post #33 of 172
Quote:
Originally Posted by matrixskp View Post

Also people who are complaining that most companies don't have a 30% profit margin have got it all wrong... the 30% Apple takes will be replacing existing distribution/printing costs.

And how do you know that 30% of these companies costs go into distribution/printing?
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post #34 of 172
Quote:
Originally Posted by AppleSauce007 View Post

Apple works hard to create and maintain the ecosystem.

Publishers are much better positioned to make money within the ecosystem.

Any good publication will be better off with 70% within the ecosystem than with 100% outside of the ecosystem.

The early adopters will make a killing. (Just ask News Corp)

In any case, the publishers have a choice to be in or out.

Time will tell.

Apple is foremost in creating and maintaining the iOS ecosystem, but they are not alone. The iOS ecosystem's success is also largely contributed to by the positive feedback cycle between increasing developer/publisher support and increasing customer user base. The question is how long can this be maintained as Apple increasingly takes steps to antagonize developers/publishers? Yes for developers/publishers that are also involved in selling physical media the savings in digital distribution will probably cover Apple's 30% cut. But those digital savings don't apply to developers/publishers which are already digital only and are already pricing their content lower as a selling point. Giving an additional 30% cut to Apple when digital distribution savings have already become incorporated into the business model may be untenable as Rhapsody claims.

Yes, Apple may well be within their rights to say tough-luck, you're living in our house, but is this really conducive to long-term developer/publisher relations? I'd rather developers/publishers who are positive in evangelizing the iOS ecosystem rather than just grudgingly supporting it as long as they still make money. Steve Jobs famously told Motorola that "I can't wait until we don't need you anymore" for CPUs. Does Apple want developers/publishers to have the same attitude towards them?

EDIT: In terms of a compromise, I think Apple should keep the 30% cut requirement for subscriptions in order to prevent large numbers of apps converting to subscriptions if the cut was smaller there. They should also keep the ban on direct linking to external websites for those looking to avoid the 30% cut since it's messy from a user interface perspective and I can understand Apple's push for one-click convenience. However, Apple should remove the requirement that in-app subscriptions be priced the same or lower than external sources. Developers should be allowed to charge more for in-app subscriptions to make up for the 30% cut if they want to. It'll be up to customer feedback to developers to determine how popular this is and whether they'll push for price parity, allowing the pricing scheme to evolve to consumer demand.
post #35 of 172
The article is full of speculative views expressed by 'experts' just hedging their opinion bets. It's no more than the print equivalent of click-bait.

Not too different from the various 'governance experts' that were trotted out by the likes of WSJ over the shareholders' supposed right to probe Steve Jobs's pipes because he took leave for health reasons.
post #36 of 172
Quote:
Originally Posted by jkichline View Post

I'm a developer who's making both iOS and Android apps. It's not the developer who makes the decisions. It's the end-user. As long as Apple holds the mind share of the public, they are going to have a lot of users. If Amazon, Instapaper and the like leave, they are shooting themselves in the foot. I think they understand this. It's going to take at least a year for the MS/Nokia deal to produce anything and by then Apple will be further ahead.

Kindle, Hulu and Netflix already have plenty of mindshare without being in the App Store. They will nor be hurt in any significant way. For smaller developers, the App STore is a good deal - they have to fight for even the small amount of mindshare that they hold.
post #37 of 172
Here's a question for you. How much do you think Apple charges Netflix to be on AppleTV or any other device? I highly doubt its 30%.
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"I got the answer by talking in my brain and I agreed of the answer my brain got" a 7 yr old explaining his math HW
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #38 of 172
Quote:
Originally Posted by dasanman69 View Post

Here's a question for you. How much do you think Apple charges Netflix to be on AppleTV?
I highly doubt its 30%.

Exactly. Apple realized that Netflix was required in order for the AppleTV to gain more traction. They need to hold that same understanding with regard to content providers in the App Store.
post #39 of 172
Quote:
Originally Posted by dasanman69 View Post

I can see why publishers are reluctant to do things Apple's way. Has iTunes been the saviour to the music industry? No. Sales were at a all time low last year despite millions of iPhones, iPods and iPads being sold.

Has nothing to do with the quality of content....
post #40 of 172
Quote:
Originally Posted by penchanted View Post

While I agree, there is a problem if the publisher has lowered the cost of his digital product to reflect the lower costs of digital distribution. In this case, the publisher may already be operation at the same margin he was receiving in the physical distribution channel.

How many have, though? I bet, oh, not many. I mean look at digital copies of movies and music offered in iTunes. Shouldn't that all be less? Nope.
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