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Apple's rejection of 'Readability' iOS app stirs subscription controversy

post #1 of 381
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The makers of the software service Readability have called out Apple in an open letter after their application, which declined to use the new iOS in-app subscription feature, was rejected from the App Store.

The Readability application was submitted to Apple for approval, but was rejected last Friday, according to creator Rich Ziade, for not adhering to the company's new subscription policies. Ziade revealed that the iOS software, which saves web articles in an easy-to-read view without advertisements, was rejected from the App Store due to section 11.2 of the App Store Review Guidelines.

Section 11.2 prevents iOS software from "utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or other services in an app."

Readability gives 70 percent of its service fees directly to writers and publishers of content, financed through a minimum $5-per-month subscription fee. But that fee is collected from outside the confines of the App Store, which means Apple does not get its mandated 30 percent cut of all transactions for iOS software.

"We're obviously disappointed by this decision, and surprised by the broad language," Ziade wrote. "By including 'functionality, or services,' it's clear that you intend to pursue any subscription-based apps, not merely those of services serving up content."

He argued that Readability is "unique" because it is a service that pays most of its earnings to writers and publishers. In response, Ziade said that Apple's policy -- which he said "smacks of greed" -- will force Readability to embrace the Web and bypass the App Store.

Last week, Apple unveiled subscriptions for its iOS App Store, allowing publishers of content-based applications for iOS devices to offer recurring billing. Apple's terms also prevented links to external websites to purchase content or subscriptions. In addition, fees cannot be less expensive for customers outside of the App Store.

Apple's change in policy frustrated some publishers, developers and content providers, who feel that a 30 percent cut of all transactions through iOS software is too steep. The U.S. Federal Trade Commission and Justice Department are also said to be looking into Apple's policies in a "preliminary stage."

Ziade said that while he's frustrated by Apple's change of policy, he hopes that the company will reconsider its approach and allow services like Readability to come to the iPad and iPhone in the form of a native application.

"We're always looking to give readers the best possible reading experience and a native iOS client would help us do that," he wrote. "We hope you'll change your mind. If you do, wed be happy to resubmit the Readability iOS app."
post #2 of 381
To me, the irony of a lot of this is that there is very little content that is available in the form of a native app that is any better than what's available through the web. Actually, in many cases, the app-version of content is *worse* than the website (the NY Times perhaps being the most dramatic example that I can think of).

If I were a content person, I think I'd just make an html5 web app that installs on people's home screens. From the user's perspective, that's pretty similar to a native app, and if all you're doing is looking at text, graphics, and video, why do you need a native app to begin with? Those things work just fine through html5 and can have interactive components.
post #3 of 381
Don't like Apple's choices? Try the competition.
post #4 of 381
Well, Apple certainly seems to be losing the PR war here. They do come off as greedy and more controlling than in the past. They have always had a high profit margin, but fans (like me) said "it is worth it for a great product package." Here, it doesn't seem that Apple is adding all that much with in-app subscriptions...

I don't see how they will win all these battles. Not sure where it will end...
Progress is a comfortable disease
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Progress is a comfortable disease
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post #5 of 381
Quote:
Originally Posted by Bageljoey View Post

Well, Apple certainly seems to be losing the PR war here. They do come off as greedy and more controlling than in the past. They have always had a high profit margin, but fans (like me) said "it is worth it for a great product package." Here, it doesn't seem that Apple is adding all that much with in-app subscriptions...

I don't see how they will win all these battles. Not sure where it will end...

I agree with you, whatever the rights and wrongs of this, Apple are coming across pretty badly in the news. I can imagine them backing down on this one.
post #6 of 381
I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.
post #7 of 381
I thought that the bang for the buck with itunes (music, apps, movies, etc) was to get people using apple, not to cushion apple profits.

this seems counter to that approach.

30% seems like a lot, especially when I would love to buy books through ipad kindle without going to the web. I don't think that amazon is going to take a 30% loss on every book.

This just doesn't seem fully thought out. SJ needs to start asking some questions inside as to what they were thinking.

E
post #8 of 381
Quote:
Originally Posted by Eideard View Post

Don't like Apple's choices? Try the competition.

thats great business, alienate the consumers and those you rely on to make your ecosystem desirable.
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post #9 of 381
This is only the beginning.. They keep this up, the more developers they'll turn off. As a consumer I don't care (right now) but once apps and contents start leaving iOS then I will start caring.
post #10 of 381
Quote:
Originally Posted by hface119 View Post

I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.

No one is arguing that Apple deserves a cut but 30% is just flat out ridiculous. Like the music industry, Apple is supposed to save the publishing industry not help destroy it.
post #11 of 381
Quote:
Originally Posted by hface119 View Post

I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.

Lets say Apple has developed an ecosystem, not just iPhone/iPad hardware, right ? Then one might also look at the number of native Apps that Apple built. How many are they? Not many. Thousands of developers developed Apps using their brains/resources and Apple started gaining and touting that there are hundreds of new apps coming to App store available to users. Sort of, Apple and developers have some degree of interdependence. Apple needs developers' software and developers need Apple hardware.

Now are those developers asking for a bite in hardware sale revenue ? Plain NO. Is Apple asking a bite (not a chunk)? Yes. What's fair?
post #12 of 381
Apple is completely & totally 100% out of control here.

Apple's greed is simply unfathomable.

Their new subscription policies are the equivalent of Microsoft charging Apple a 30% fee every time Apple sold a song through iTunes for Windows, simply because Apple is using Microsoft's platform.

This is completely unfair, and I'm hoping that it's illegal as well so that somebody will put a stop to Apple's corrupt practices here.

Shame on Apple.

And for my next phone, I will be looking at Android.
post #13 of 381
I wonder if many more apps get rejected/ leave the App store. Readability is nice, but not that well known so won't have too much impact. While Apple does have all these rights, it's a wonder they didn't announce this from the store's inception. Their policies haven't been the best, although I guess it's difficult not to make mistakes when you're the first to do it.
post #14 of 381
Quote:
Originally Posted by scotty321 View Post

Apple is completely & totally 100% out of control here.

...
And for my next phone, I will be looking at Android.

I wouldn't go that far. That is like whipping yourself because the price of milk went up.

Let's just hope that this is sorted out so that Apple's operational costs are covered and apps all go in-app with purchases.

But don't punish yourself by using an Android phone. You did nothing wrong here.

E
post #15 of 381
at the very least, for the consumer, it's a bait and switch on Apple's part if a significant amount of content leaves the store that had been available.
post #16 of 381
Quote:
Originally Posted by Wurm5150 View Post

No one is arguing that Apple deserves a cut but 30% is just flat out ridiculous. Like the music industry, Apple is supposed to save the publishing industry not help destroy it.

I'm in the publishing industry, and while I can not speak for the whole industry, I can safely say for myself that I have never looked to Apple (or Google, or Microsoft) to "save the publishing industry".

As for this app, this seems to be another issue of a developer thinking they are too important to play by the rules Apple has created. They charge $5 a month for the a subscription, of which 70% goes to publishers. Great. But why can't they simply do the same through the app store?

If they are in the app store the amount they would get after Apple's commission would be $3.50, of which $2.45 will go to publishers. By crying foul, they will not be in the app store and publishers will get what? Zero.

The other option is to make their app a "reader" app where only those who already subscribe to the service can use it. By taking out the out-of-app purchasing option they will not be in conflict with the app store rules.

(For instance, the Xfinity app can only be used if you are an Xfinity subscriber -- you can not subscribe to Comcast services through the app, therefore there is no conflict.)
post #17 of 381
Quote:
Originally Posted by hface119 View Post

I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.

Should they also be able to control the price outside of the store on your website too?
post #18 of 381
Quote:
Originally Posted by scotty321 View Post

Apple is completely & totally 100% out of control here.

Apple's greed is simply unfathomable.

Their new subscription policies are the equivalent of Microsoft charging Apple a 30% fee every time Apple sold a song through iTunes for Windows, simply because Apple is using Microsoft's platform.

This is completely unfair, and I'm hoping that it's illegal as well so that somebody will put a stop to Apple's corrupt practices here.

Shame on Apple.

And for my next phone, I will be looking at Android.

While I'm defending Apple, I've seen the analogy of Microsoft charging Apple for iTunes purchases on Windows a couple times, and it's beyond stupid. Microsoft doesn't host, advertise, or do quality control for iTunes. Apple does do all three for app developers. If Apple were charging people for downloading the iOS SDK, then it would be similar to Microsoft charging Apple for iTunes (though of note, Microsoft does actually charge for it's development software, whilst Xcode is free).
post #19 of 381
I understood that 30% mainly covers the cost of the distribution and purchase. I disagree that an app should be able to be free on the store and then in some way charge the user for it's use outside of the Apple structure. I get all the greed talk, but at the same time, Apple deserves revenue from both their investment in the store and to cover any costs.
post #20 of 381
Quote:
Originally Posted by Eideard View Post

Don't like Apple's choices? Try the competition.

It's amazing how consistently I see this mindset. The thing is, that's exactly what's going to happen.

But even beyond that, it's such an unintelligent attitude. See, a lot of people fail to realize that it wasn't Apple who built the app store, but it was the app developers. It's like a nation; it's the people who build the country, not its government.

Apple and the app developers once existed in a mutually beneficial relationship. Like a shark with the sucker fish that attach to itself and clean it. But Apple has basically become the shark who lacks foresight, and thinks "Hey wait a minute, I can eat the sucker fish!"

And of course, the sucker fish will learn that they cannot trust the shark. So they'll move onto a marine animal that they know they can trust. One such as the intelligent, elegant Dolphin, which would be the equivalent of Android in this perfect and irrefutable analogy.

post #21 of 381
Quote:
Originally Posted by scotty321 View Post

Apple is completely & totally 100% out of control here.

Apple's greed is simply unfathomable.

Their new subscription policies are the equivalent of Microsoft charging Apple a 30% fee every time Apple sold a song through iTunes for Windows, simply because Apple is using Microsoft's platform.

This is completely unfair, and I'm hoping that it's illegal as well so that somebody will put a stop to Apple's corrupt practices here.

Shame on Apple.

And for my next phone, I will be looking at Android.


To make an argument, it helps if you make the right analogy.

Windows is an operating system, not a trading platform. The correct analogy to Windows is the iOS. Now if MS designed iTune, and Apple is using it to sell music it had sourced from other suppliers, your analogy would be correct.

A real world relevant analogy would be the Amazon market, where 3rd party vendors sell their items in Amazon's marketplace to customers attracted to Amazon's marketplace by Amazon. Of course, this analogy doesn't help your argument as Amazon does charge a not so insignificant percentage of item price to the 3rd party vendors.
post #22 of 381
Why do developers spend hundreds or thousands of dollars on apps that they KNOW do not follow the rules? It amazes me to read stories like this where a app developer is upset because his/her app was rejected.
And I thought that Apple offers you to get subscriptions from outside the app store if you offer the same service from within.
Give the customer a choice and see what they choose.
post #23 of 381
Quote:
Originally Posted by hface119 View Post

I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.

This is nearly the equivalent as saying that Apple deserves 30% of all revenue from any ad on any web page that anybody views with Safari. After all, you say it's Apple's phone, and Safari is Apple's application. Therefore Apple is adding value to the web page ads by allowing people to view it on their iOS device. Is that really your stance?

And the argument that Apple is entitled to 30% because of the costs they have maintaining the App Store are pretty weak, too. Apple created the App Store, according to them, in order to ensure a high quality experience for iOS users. That was entirely Apple's choice, their doing. And in the case of subscriptions, Apple is nothing more than a transaction processor. You don't go through the iTunes storefront to order your apps. You do it in-app, via the programming the creator of the app created.

As others have said, the developers and publishers add value to iOS and enable Apple sell millions and millions of them based on the fact of all the applications which are available. Why is Apple not compensating those folks for adding value to the iOS eco system? The purpose of the App Store, according to Apple, is to ensure a good experience, which ads value to iOS and helps Apple sell more iOS devices. So again they benefit. Why do they need additional compensation?

Bottom line: the true purpose of the App Store has been revealed. It's not to secure iOS or ensure a good experience. It's to allow Apple to charge excessive fees for doing little to earn it. And guess what? YOU are the one paying the price in higher cost subscriptions.

And by the way, it's NOT Apple's phone. It's yours. Apple doesn't license the phone to you. It's yours. By your reasoning, Apple owns my Mac, too?
post #24 of 381
Quote:
Originally Posted by hface119 View Post

I don't see what all the hub-ub is about. This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device? It's the same way when royalites are paid to creators of films or television shows that are later remade, or when actors are paid for DVDs and such that are sold of their films.

True, it's Apple's product, their rules, and their business to make succeed or fail. It wouldn't be as much of and issue if Apple wasn't running competing services. When someone subscribes to something from Apple, Apple doesn't have to pay anyone else a 30% revenue, but they force their competition to do so (directly to Apple) effectively breaking the business model for others while keepin it intact for Apple. It's anti-competitive. Apple is entitled to no more than a reasonable bounty and operational cost recovery for bringing customers to the subscriber through their product. 30% of total revenue is way beyond reasonable.
They can do why they want, but it's going to repel developers, make their offering less attractive as developers go to other platforms and ultimately lose market share.
I for one will move on to Windows phone or Android if this doesn't change because it means services I want will no longer be available on iPhone (eg:Rhapsody.)

Apple is not treating these devs/services as partners, and that's their problem.
post #25 of 381
Quote:
Originally Posted by Wurm5150 View Post

No one is arguing that Apple deserves a cut but 30% is just flat out ridiculous.

But Amazon's 70% is not?
post #26 of 381
Quote:
Originally Posted by rbonner View Post

I understood that 30% mainly covers the cost of the distribution and purchase. I disagree that an app should be able to be free on the store and then in some way charge the user for it's use outside of the Apple structure.

But In-App-Purchases (IAP) are not served from Apple's servers, the only cost Apple has for this is the payment processing (and PayPal has shown that the costs for this are at most in the 3 to 5% range even for small sums).
If Apple wants to cover its cost for the free app, charge the app developer for the downloads of the apps.
post #27 of 381
Quote:
Originally Posted by Jeff12345 View Post

Why do developers spend hundreds or thousands of dollars on apps that they KNOW do not follow the rules?

Apple recently changed their policies, most likely the app was already in development for some time.
post #28 of 381
Quote:
Originally Posted by Eideard View Post

Don't like Apple's choices? Try the competition.

I don't care what margin apple decides it wants to charge.
BUT when it says suscriptions outside their ecosystem cannot be cheaper THAT is called price fixing. They are using their market share to bully developers and screw customers.
post #29 of 381
Quote:
Originally Posted by TalkingNewMedia View Post

... As for this app, this seems to be another issue of a developer thinking they are too important to play by the rules Apple has created. ...

That's exactly what this is. This is no different than the people who make a big stink that Apple rejected their app because it was using private APIs. In both cases developers are looking to cheat on their developer agreement, then go whining to the public when the get rejected for cheating. What a great business plan, give the app away for free and generate all the revenue outside the App Store, that way they pay 0% of the costs and get 100% of the revenue. (Yes, I know they say their plan is to share it with the content creators.) I mean, they're "unique", after all. And people wonder why Apple feels it's necessary to crack down on this loophole when everyone is looking for ways to hide their revenue.
post #30 of 381
Quote:
Originally Posted by Chris_CA View Post

But Amazon's 70% is not?

For an ebook, Amazon's cut is 30%, the publisher receives 70%
post #31 of 381
Quote:
Originally Posted by mbarriault View Post

While I'm defending Apple, I've seen the analogy of Microsoft charging Apple for iTunes purchases on Windows a couple times, and it's beyond stupid. Microsoft doesn't host, advertise, or do quality control for iTunes. Apple does do all three for app developers. If Apple were charging people for downloading the iOS SDK, then it would be similar to Microsoft charging Apple for iTunes (though of note, Microsoft does actually charge for it's development software, whilst Xcode is free).

Apple doesn't host, QC, or advertise for subscription content either. They provide a valuable service in hosting the actual app itself, and it makes sense that they charge 30% cut for the transaction of selling apps. As far as forcing in-app subscriptions for content that's hosted, delivered, QC'd elsewhere, they aren't providing any additional value to the developer. They are just being greedy. Do you think Apple is gonna be hosting Netflix content on the app store? They just want a cut out of their business just because they wanted their customers to be able to watch content on the phone in an App.

As for the other argument that someone made about MS Windows being an OS, and not an App Store, therefore the analogy is wrong. You should understand that the only legit way to get an App on the iPhone is through the App Store. So, the App Store is an integral part of the OS.
post #32 of 381
Quote:
Originally Posted by Eideard View Post

Don't like Apple's choices? Try the competition.



I'm glad you are not in charge.

This isn't about Apple having them by the short and curlies. If it isn't a worthwhile partnership, they WILL try the competition when it becomes viable. And it will actually help the competition become viable.
post #33 of 381
Quote:
Originally Posted by MinnLee View Post

For an ebook, Amazon's cut is 30%, the publisher receives 70%

Plus, Amazon hosts the content for those publishers. Apple doesn't in this case besides the initial app.
post #34 of 381
Quote:
Originally Posted by Jeff12345 View Post

Why do developers spend hundreds or thousands of dollars on apps that they KNOW do not follow the rules? It amazes me to read stories like this where a app developer is upset because his/her app was rejected.

The press release is exactly five days old. Until this press release, Apple had no objections against apps offering commercial services without IAP.
These app developers spend hundreds of thousands of dollars based on what was standard practice for more than two years, then bam a press release is issued and what was fine for two years is no longer fine.
post #35 of 381
Quote:
Originally Posted by noirdesir View Post

But In-App-Purchases (IAP) are not served from Apple's servers, the only cost Apple has for this is the payment processing (and PayPal has shown that the costs for this are at most in the 3 to 5% range even for small sums).
If Apple wants to cover its cost for the free app, charge the app developer for the downloads of the apps.

I don't realize why so many people have so much trouble comprehending the simple fact that the App Store is not a fee for services system; it's a revenue sharing system. And the revenue sharing goes mostly to supporting the costs of operating the App Store. Developers trying to hide revenue so they don't have to share it according to the terms of the contract they signed with Apple are trying to avoid their share of these costs and stick other developers with them.
post #36 of 381
Quote:
Originally Posted by Jeff12345 View Post

Why do developers spend hundreds or thousands of dollars on apps that they KNOW do not follow the rules? It amazes me to read stories like this where a app developer is upset because his/her app was rejected.
And I thought that Apple offers you to get subscriptions from outside the app store if you offer the same service from within.
Give the customer a choice and see what they choose.

Why? Because Apple keeps changing the rules and writes them so incredibly vague that you can't really know what they mean all the time. And because you have to write an app and then submit it according to the rules at that time, and only then find out if you violate the newest rules, it's a moving target. Who's to say that these developers didn't start writing their app months ago, before Apple changed the rules (again)? Or do you think these apps are written in a day?

As for subscriptions outside of the store, sure, but Apple forces them to sell them at the same price as Apple's 43% markup on the App Store requires (yes, that's 43%, it's how much more you pay for you subscription because of Apple's policy). If the price is artificially set to match the App Store, and the App Store is easier, then yes, the market will drive people to use the App Store.

If you want customer choice, as you say, then let the provider set the prices. Not Apple dictating them. If you have content that cost you $6 to create, and you want to make $1 profit, you want your revenue to be $7 for the content. But then the App Store price is $10. A 43% market-up for Apple doing almost nothing.

I say let Apple sell it for $10, and the content provider sell it for $7 (or maybe $8 to pay to process the transaction on the provider's web site), then see what the customer chooses. Would you be willing to go through a couple extra clicks on the provider's web site to avoid that 43% Apple tax? I bet a lot of people would. And then Apple can lower their percentage to find what it takes to sway customers. I'm thinking it would be around 10%, nowhere near 30%

THAT is customer choice.
post #37 of 381
SO much disinformation and confusion on this issue! Look, these guys are publishers. If they want to distribute, say, through Amazon, they'd be paying 60%. But they can publish through Apple for 30%. What's their beef?!

post #38 of 381
Quote:
Originally Posted by mbarriault View Post

While I'm defending Apple, I've seen the analogy of Microsoft charging Apple for iTunes purchases on Windows a couple times, and it's beyond stupid. Microsoft doesn't host, advertise, or do quality control for iTunes. Apple does do all three for app developers. If Apple were charging people for downloading the iOS SDK, then it would be similar to Microsoft charging Apple for iTunes (though of note, Microsoft does actually charge for it's development software, whilst Xcode is free).

Apple hosts, advertises and does QA for the APPS, not for the subscription data. That comes from outside the walled garden and never touches an Apple server or passes before Apple eyes.

And it's the content that has value, not the app used to view it. Apple should be encouraging data coming to their devices not putting up walls that will make content creators and ultimately Apple hardware customers think twice.
post #39 of 381
Quote:
Originally Posted by TalkingNewMedia View Post


The other option is to make their app a "reader" app where only those who already subscribe to the service can use it. By taking out the out-of-app purchasing option they will not be in conflict with the app store rules.

The rule 11.2 at its current form leaves too much for interpretition. It could mean that Apple will not approve a "reader" app with ANY kind of out-of-app subscription service.
post #40 of 381
Quote:
Originally Posted by MinnLee View Post

Apple recently changed their policies, most likely the app was already in development for some time.

I don't think the policy changed at all, despite what the jilted developer said. They are just enforcing what was out there all along.

If these developers don't like it, they can take their business elsewhere. I don't see why they would, though. They can up the price to $6 and still get close to what they did when they were flaunting the rules.

Apple built the playground, and they can charge to play there. It's business, which has a a bit of greed in it, but this is not pure greed. They deserve to be compensated for putting together a system that can make people very wealthy and bring them a lot of customers overnight.

If a ton of big developers decided to jump ship, or a whole bunch of users decided that the only way they could subscribe to the content they need would be to jailbreak their iPhones, Apple might reduce the rate to 20% to prevent disaster, but I don't even think they will need to do that. Those things aren't happening! It's a tempest in a teapot at this point.

They will wait and see. The question is: What will Amazon do with their Kindle app between now and June?
Journalism is publishing what someone doesn't want us to know; the rest is propaganda.
-Horacio Verbitsky (el perro), journalist (b. 1942)
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Journalism is publishing what someone doesn't want us to know; the rest is propaganda.
-Horacio Verbitsky (el perro), journalist (b. 1942)
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