Apple's rejection of 'Readability' iOS app stirs subscription controversy - Page 10

I don't appreciate having words put in my mouth and what I've said being completely misrepresented. One of us is dishonestly fear mongering, but it's not me.

It's not a fee for service, it's revenue sharing that every developer, large and small, agreed to. What is being argued is that big companies like Amazon ought not have to abide by their contracts because they don't need Apple to sell content, it's as simple as that.

He doesn't get called a troll because his comments in this thread and historically don't suggest that he is.

What you call harsh, some call fair. Why Amazon and other large companies should be allowed to steal revenue from the App Store just because they can and leave other, smaller, developers to foot their bill is beyond my understanding.

Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.


It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).


Which developers have no choice to agree to if they want to sell apps for iOS devices.


Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.


Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees. Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.


Yes, these are all good for iOS users and therefore iOS users should be wishing that Apple make it much more appealing for content providers to use this method. Seriously, why is Apple making it so difficult for themselves? The answer is that they are being greedy: they already make massive margins on the hardware, and now they're trying to excessively milk content delivery as well. As I said in a previous post, a lower fee would make for a more attractive platform for content providers which would make for a more attractive platform for potential users which would result in Apple selling more hardware, where they make their real money.


This could easily result in prices increasing. And it's not about whether people leave iOS, it's about whether they even come to it in the first place. There are not currently that many magazines or newspapers sold by subscription as a native iOS app.


They won't "make a loss", but they will "lose money" in as much as if they don't raise prices, they will lose 30% of their revenue to Apple.


No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.

Yeah, and those wishing to sell through Amazon have no choice but to agree to Amazon's terms. There's nothing shocking or unusual about the terms of the app store. In contrast to what came before it, it's quite reasonable and fair. And it is revenue sharing. The fact is unless Apple requires that IAP use Store Kit and that all IAP are subject to the revenue sharing, it becomes trivial for "developers" to hide revenue and cheat on the developer agreement.


Isn't that exactly what they are doing here?


There simply is no reason at this point to believe this scenario is true. People are tossing around a lot of numbers to try to show it's what will happen, but the numbers are just being pulled out of hats and any and all contradictory evidence ignored.


Again, this amounts to an argument that big companies ought to be subsidized in the App Store by small developers. Hardly fair to them.


It's not going to make subscriptions any more expensive. Those publishers are already paying that much or more for subscriptions and making most of their money from ads.


They aren't going to lose 30% of their revenue, or even 30% of their revenue from iOS users. They may make less money, but the reason they were making more money in the first place is because they were cheating on their contracts.



Which is exactly why people ought to be focused on the DRM issues here. That the, albeit unlikely, possibility that a single vendor might withdraw from a platform causes wide-spread panic ought to give pause to think about exactly why. The reason is that Amazon has locked customers into proprietary DRM and now they essentially own those customers. The real issue that ought to be under discussion is just how dangerous proprietary DRM is in the eBook market.

Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.


That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.

Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore. It's a business model that worked fantastically well for Apple in the mp3-player market and I see no reason why it should not work equally well with the arguably more important tablet market (mp3 market was transient and is giving way to the smartphone and tablet markets which will be around for a lot longer).

I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.


And it would be trivial for Apple to spot this. They could require such apps to charge $.99 up front to cover the initial app distribution cost, even without this a 10% fee as I propose would still earn Apple money in the vast majority of cases.


No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.


It will if content providers wish to maintain their revenues.


So you are anti the iBooks as well?

DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?

Well, that's debatable.



Because it is not a payment processing fee.


And they do, and will continue to only make a small profit.


Certainly 10% would be more attractive to them, but how much over break even is entirely debatable. I certainly don't believe this means as much money out of Amazon's pockets as is being claimed, especially since all these claims are based on the assumption that all eBooks purchased by iOS users will be purchased via IAP, which they won't.

But, right now they are paying 0%, which is even more attractive to them.


Yet, in your scenario, Amazon, which according to claims is making piles of money off their iOS apps, which it's claimed they will now loose entirely, pays much less than a developer selling a $4.99 app, less still than a $14.99 app. Yet, who is generating more revenue? Still seems like subsidization to me.


Yes, I don't and won't buy eBooks (I read plenty of free, public domain books.) until there is an open standard for DRM (and that doesn't mean it has to be free or open source, just like H.264 is an open standard, but not free or open source.). There is absolutely no reason it has to be proprietary, and what people ought to be upset about is that vendors are allowed to lock their content up with DRM, essentially making them prisoners of a single eBook vendor, and that goes for iBooks as well.

In terms of subscriptions, that's what it amounts to because the only thing Apple does is process a payment.


So why not just make it 10% and be done with it? End this arguing, make content producers happy, increase the attractiveness of the iOS platform and gain through increased sales of high-margin hardware.


Well, there are plenty of online payment platforms out there (protx, paypal etc.) who are making money charging much less than 10% to process payments, so 10% would definitely cover Apple's costs.


Actually, there are open-source implementations of the H.264 standard (both encoders and decoders)


Yes there is. DRM is about restricting what you can do with content, and it works by encrypting the content, then giving the user the encrypted content, a "player" with an obfuscated decryption algorithm, and the decryption key. The player will only decrypt your content according to the terms of the DRM. If the decryption algorithm were not obfuscated, you could decrypt the content with your own program (using the key they have to give you otherwise the official player couldn't work), and then use the content however you want.

Having an "open" DRM system would by definition mean a non-obfuscated decryption algorithm, but it's the obfuscation of the algorithm that is required in order for DRM to function.

Whilst DRM has to be proprietary, the proprietor(s) needn't be content producers/sellers, which mitigates the risks.

Of course, no DRM is nicer as DRM tends to piss off legitimate users without stopping thieves thieving stuff.

And access to 160M potential customers.


This "non tangible" benefit is the majority of the value of the ecosystem. It costs Apple a significant amount of money and effort to develop a successful product line like the iPad. The purchase price of the hardware is just one of many ways to profit from that highly successful invention.


With it's huge user base, easy development environment and top notch ecosystem. They are free to exclusively develop for Android if this agreement is overly burdensome.


Which they are now doing so. So the problem is what? App approvals were too slow! So they opened the gates a bit until better policies and more staff can be trained to enforce those polices.


Actual content providers probably are used to less than 70% of gross.


Streaming netflix works okay most of the time. But I still have movies natively loaded because it certainly doesn't work enough of the time. For ebooks it would be stupid to rely only on HTML5 access because of all the use cases where you might want to read a book is not where wifi is and sometimes not even 3g or edge.


No, it makes KINDLE less attractive and disastrously so. Because sure as hell B&N will stay if Amazon is dumb enough to pull the app because then only the Nook ebook ecosystem will be buy once and read everywhere.

With 160M and growing users not having iOS access is a gaping hole in that buy once and read everywhere concept.

Using that logic, then when a game developer sells you new game levels through IAP, all Apple is doing is processing a payment, so why should they have to pay 30%?

The reason is that if they didn't, game developers would give away games and sell the levels for a lower, perhaps 0%, share to Apple, effectively gaming the system to hide revenue. This is absolutely no different.

On the other hand, if Apple made it 10%, there would be just as much uproar, and Apple ends up in a much weaker bargaining position with those who are currently paying 0%.


Yes, it can't be completely open, but it can be non-proprietary and not locked to a single vendor, just like SSL certificates are held "in trust" by certificate authorities, so could DRM keys. Perhaps 'open standard' and 'non-proprietary' are not the best choice of words, but the point is that buyers of digital content ought not have their ability to legitimately use that content controlled by a single company, and that the method for accessing that content ought to be a single one that is open to all reader software, just like authenticating SSL certificates is open to all browsers.

Come on, you know this isn't true. The uproar is about the level Apple want to charge, not that the charge exists.

The problem is not one of distributing keys, it's one of the algorithm used to decrypt content using the key. You have to give the user the key, otherwise even the "restricted" player can't decode the content. But if the decryption algorithm is not obfuscated (as it wouldn't be, by definition, if it were an open standard) you could use the key and the known decryption algorithm to decrypt the content and circumvent the DRM.

You could of course have an open standard whose specification document is very expensive for the average consumer, say $100,000, and has strict NDAs attached. But the risk of the spec. being leaked is high, and as soon as it is leaked, it would have to be fundamentally changed at massive cost to all those who are legitimately implementing the standard.

Tablet platform is off the ground. In a decisive way.

If anything the Kindle ecosystem is less off the ground and needs iOS far more than iOS needs Kindle.


Again, that 30% of revenue sharing is for the strategic advantage of access to 160M+ iOS users.

This is exactly what you pay middlemen for. A high concentration of potential customers. Otherwise everyone would be selling direct and not taking 70% of the revenue stream but 100% of the revenue stream.


And that is all they are doing according to the conference call. The 30% revenue sharing should have very limited impact to the bottom line. It DOES, however, make sure that those folks with competing hardware ecosystems (Kindle, Nook, etc) pays a fair market price for access to the iOS market.


These aren't content producers but content resellers. And no, it wouldn't be "over breakeven" for Apple from a strategic point of view.

Apple does not want to be a commodity hardware provider that hosts other ecosystems. They want to insure that the NATIVE ecosystem remain the competitive advantage that they have labored long and hard to develop.

Folks that want a commodity hardware/software platform should look to Android. You get what you pay for.



Tremendous subsidizing here. This is like Amtrak saying "Hey, Southwest, carry these passengers for me and I'll pay the gas, that's like no subsidies, mkay?" It completely ignores the cost of developing and running a successful airline. Carry those passengers on your own trains buddy.


No, DRM does not have to be proprietary to function. There are (mostly unused) open source DRM solution. And no, DRM algorithms do not have be hidden to work. They need to be secure from tampering and the keys also need to be secure. Typically this requires a trusted platform (cell phone, etc) that restrict access to the keys except from signed and approved apps.

The actual algorithms can be well known. For example the OMA DRM is a public spec and has an open source implementation. http://sourceforge.net/projects/openipmp/

AND, there are also other industry standard DRM solutions that allow for interoperability. For ebooks the I would have gone ePub with Adobe DRM as a potential defacto standard...it's missing Kindle and iBooks so it's really nascent but interoperability between the latest Nooks and Sony ebook readers is nice (the older Sonys don't do epub/adobe).

And yes, iBooks isn't compliant since they use ePub w/Fairplay. I probably wouldn't buy from the iBookStore except for non-DRM titles. This is one area where Apple might decide to switch from Airplay for strategic reasons. By adopting the Adobe DRM spec then iBooks can sideload from other 3rd party book stores...then all books are iBooks...

I disagree. The uproar is, wrongly, about the fact that Apple is asking for what is perceived as a hefty "payment processing" fee, when in fact all they are doing is enforcing revenue sharing provisions of the developer agreement.

Except of course for Kindle books.

But, yes, these single company DRMs are the biggest problem with eBook publishing and the only way to end this is to vote with our dollars, which means not buying DRMed eBooks until this changes. I'd not be keen on Adobe DRM, either, since, again, the whole thing is controlled by a single entity, but it might be better than the current situation.

In other words, if the eBook DRM situation weren't already fubar for consumers, no one would even care about this issue.

90% of my paid ebooks are from Baen books and aren't DRM'd. The free ebooks from Baen and other folks still dominate the collection since I've started borrowing ebooks from the library.

They typically use ePub + Adobe or Overdrive.

I would buy a Nook...and am still tempted to get a Nook Color. Kindle, not so much.

Exactly.

You have two arguments here, one: Apple are charging too much. Two: the developers are taking the piss and bee taking Apple for a free ride.

At the end of the day, if you are making money on apps in the iTunes store you got to pay Apple. If you don't like that then stop publishing in iTunes. If enough devs move to Android then maybe Apple will revise its pricing.