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Apple backs down on in-app purchasing rules, allows lower prices for out-of-app purchases

post #1 of 138
Thread Starter 
Apple this week revised its rules for in-app subscriptions, and no longer requires that subscriptions purchased outside of an iOS application have the same price or less.

Under the old rules, Apple required that subscriptions sold outside of the App Store umbrella, where Apple does not receive a 30 percent cut, be "at the same price or less than it is offered outside the app."

But, as noted Thursday by MacRumors, the new App Store Review Guidelines unveiled at the Worldwide Developers Conference this week have removed the need for prices to be identical out of the App Store. Apple only requires that "there is no button or external link in the app to purchase the approved content."

The change will likely mean that content providers like Amazon, which sells e-books through its online store for use in the Kindle application, will be unaffected by the previously-set June 30 deadline. Under Apple's previous rules, Amazon would have been forced to offer the option of purchasing content within the Kindle application at the same price, while paying Apple a 30 percent cut of the sale.

One the App Store rules for subscriptions and in-app purchases were unveiled, Apple announced that legacy applications approved before the changes would have until June 30 to comply with the new rules. That meant software like Amazon Kindle, Nextlix or Hulu+ originally had until the end of the month to add a "buy" button and give Apple a 30 percent cut of sales, or they could be removed from the App Store.

Apple's new rules, detailed in section 11.14 of the App Store Review Guidelines, make it clear that approved iOS software "can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app," provided there is no link to purchase that content elsewhere at a lower price. "Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app."



Apple's change of opinion comes soon after one prominent content provider, the Financial Times, decided to create an HTML5-optimized website rather than submit to Apple's in-app subscription rules and give the company a 30 percent cut. By offering its product in the Safari Web browser, the newspaper would be able to avoid paying Apple 30 percent of its revenue for subscriptions through the App Store.

The Financial Times application was highlighted in 2010 at the WWDC Apple Design Awards. The iPad application was recognized as one of the best pieces of iOS software, ranked based on design, technical excellence, innovation, quality, technology adoption and performance.
post #2 of 138
This make a lot more sense.
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post #3 of 138
Good for everyone involved.
post #4 of 138
I still think web-apps are a good way to go for news sites and should be developed first so all tablets can access them before making specific OS clients.

I wish apple would start updating their web app database again and add one to the default iOS but I guess that's never going to happen.
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post #5 of 138
Amazon will still have to remove the Kindle web link from the Kindle app, and will no doubt be hit with lots of negative reviews on iTunes for doing so.
post #6 of 138
Shouldn't the first sentence end: "no longer requires that subscriptions purchased outside of an iOS application have the same price or GREATER"?
post #7 of 138
Quote:
Originally Posted by kotatsu View Post

Amazon will still have to remove the Kindle web link from the Kindle app, and will no doubt be hit with lots of negative reviews on iTunes for doing so.

For all of us who are concerned with Apple's ridiculous behavior here, it is important to remember NOT to "upgrade" (downgrade) the Kindle app until all this settles out and Apple stops acting like a selfish child.
post #8 of 138
Quote:
Originally Posted by Jcoz View Post

Good for everyone involved.

Yeah, everyone except consumers. This new ability to jack up prices is not good for consumers.
post #9 of 138
So this should end any interest by the DoJ, FTC and EU in Apple's in-app purchase policies. I'm not really too surprised Apple found there were more negatives than positives with their previous in-app rules.
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post #10 of 138
Quote:
Originally Posted by newagemac View Post

Yeah, everyone except consumers.

How so? You now have a choice. You can go the easy route with in-app purchases and maybe have a little more privacy protection and pay a little more. Or you can save a little money, do a little more work, and maybe have a little less privacy.

Why is the choice not better for consumers than the previous plan?
post #11 of 138
For me, the native FT app is more a pleasure to use compared to the web app. I hope FT decides to continue developing their iOS app.
post #12 of 138
Quote:
Originally Posted by kotatsu View Post

Amazon will still have to remove the Kindle web link from the Kindle app, and will no doubt be hit with lots of negative reviews on iTunes for doing so.

Yeah, well, who cares.

Quote:
Originally Posted by fyngyrz View Post

For all of us who are concerned with Apple's ridiculous behavior here, it is important to remember NOT to "upgrade" (downgrade) the Kindle app until all this settles out and Apple stops acting like a selfish child.

Quote:
Originally Posted by newagemac View Post

Yeah, everyone except consumers.

Consumers will be fine, and Apple isn't the one acting like a selfish child here. In the first case, Amazon and others aren't going to be able to pass on the cost of participating in the iOS ecosystem to consumers without generating a negative backlash against themselves, not Apple. Secondly, Apple had to tighten these rules to prevent cheating on the App Store revenue sharing that all developers agree to, which I think they've successfully done by restricting this to "approved content": so game developers aren't going to be able to give away free empty "shell games" and then sell level unlocking on their web sites, sticking Apple and other developers with the cost. This will end up costing Amazon some money, but they'll be fine, and it's only fair that they share the ecosystem costs with other, typically smaller, companies and developers.
post #13 of 138
I think it depends. The OS offers a lot of APIs that a web app cannot. I don't think APple is going to highlight web applications, not because they take away from the App Store, but because most developers developing web apps also have alternative ones for other platforms. Apple doesn't want to give the other platforms advertising.


Quote:
Originally Posted by theguycalledtom View Post

I still think web-apps are a good way to go for news sites and should be developed first so all tablets can access them before making specific OS clients.

I wish apple would start updating their web app database again and add one to the default iOS but I guess that's never going to happen.
post #14 of 138
Quote:
Originally Posted by Wiggin View Post

How so? You now have a choice. You can go the easy route with in-app purchases and maybe have a little more privacy protection and pay a little more. Or you can save a little money, do a little more work, and maybe have a little less privacy.

Why is the choice not better for consumers than the previous plan?

Because higher prices is bad for consumers. Why would a consumer prefer that publishers jack up their prices? I don't see how you can say higher prices for consumers is a good thing unless you are a publisher.
post #15 of 138
This doesn't affect the main problem that publishers have with Apple - the loss of subscriber details. They used the price issue as a smokescreen, but the FT has openly stated that it's the subscriber details issue that is the dealbreaker for them- ie. the value they get from selling on all our details.
post #16 of 138
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post #17 of 138
Quote:
Originally Posted by TBell View Post

I think it depends. The OS offers a lot of APIs that a web app cannot. I don't think APple is going to highlight web applications, not because they take away from the App Store, but because most developers developing web apps also have alternative ones for other platforms. Apple doesn't want to give the other platforms advertising.

Slightly off topic but something that isn't getting enough attention yet are the iCloud APIs Apple announced.

With delta Apple iOS and App Store updates I have to assume that the documents syncing and iCloud apps syncing user data will also be deltas. My only wish is that they will allow more transparent syncing between apps the way iMessages work. For example. If I buy Angry Birds on my iPad, iPhone and Mac I want to be able to pick up the game and have my game play history match between devices.


PS: I see no addition to the backgrounding APIs or Fast App Switcher, for which I'm mostly glad.
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post #18 of 138
Quote:
Originally Posted by newagemac View Post

Because higher prices is bad for consumers. Why would a consumer prefer that publishers jack up their prices? I don't see how you can say higher prices for consumers is a good thing unless you are a publisher.

The original policy would effectively have meant higher prices for everybody. Non idevice users would have subsidizing apples cut because the prices in and out of the Eco system would have been in lockstep to be offered within it.

So now you can get your content ex-ecosystem, or if the app offers it, an in app purchase which can be set indepedently of the price elsewhere. It's up to you how you lay for it. Believe it or not, choice is a good thing.

Obviously the original scheme was not viable, and steve blinked.
post #19 of 138
Quote:
Originally Posted by MacRulez View Post

How many times does this have to happen before Apple simply stops making such blunders in the first place?

Apple have had few missteps in recent memory. I can only really think of a handful.

1. iPod hifi lol
2. This in app policy
3. Button less shuffle
4. That app compilation things.
5. iBooks thus far

Btw, where's the chanting about 70% of something is better than 100% of nothing?
post #20 of 138
Quote:
Originally Posted by newagemac View Post

Because higher prices is bad for consumers. Why would a consumer prefer that publishers jack up their prices? I don't see how you can say higher prices for consumers is a good thing unless you are a publisher.

I can say it and I'm not a publisher or a developer.

You see, I happen to believe that people should pay for what they use - and that is ultimately what's best for the market and the consumer.

People like Amazon are asking for access to the iOS ecosystem but don't want to pay for it. In the end, that could end up hurting consumers.
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post #21 of 138
Quote:
Originally Posted by MacRulez View Post

The market will decide the price.

If publishers attempt to recoup Apple's 30% with a higher price, customers will either accept it or not. But at least normal free-market pricing is now possible on the platform. Those who prefer capitalism applaud this move.


More interesting is that this is not the first time that Apple has instigated a counter-productive policy and later woken up:

Apple Blinks. Flash Tools Now Allowed
http://whydoeseverythingsuck.com/201...w-allowed.html

How many times does this have to happen before Apple simply stops making such blunders in the first place?

So they are supposed to be perfect? No one else has ever done anytHing like the App store before. Every move Amazonor Google makes in this area only occurs after Apple does. When you are a pioneer, you will make mistakes. Apple listens to customers, content providers, and developers and fixes their mistakes when they are wrong. That is a good thing. Not ever making another mistake is impossible.
post #22 of 138
Quote:
Originally Posted by anonymouse View Post

This will end up costing Amazon some money, but they'll be fine, and it's only fair that they share the ecosystem costs with other, typically smaller, companies and developers.

Which costs has Amazon to pay when selling their books?
post #23 of 138
Quote:
Originally Posted by jragosta View Post

People like Amazon are asking for access to the iOS ecosystem but don't want to pay for it. In the end, that could end up hurting consumers.

What are not paying?
post #24 of 138
Bitch slapped by the Financial Times.

Can anyone spell climbdown?
post #25 of 138
Ah, so the Great Subscription Scandal is over? And right after Financial Times made a big deal about their web app.
post #26 of 138
Quote:
Originally Posted by Scaramanga89 View Post

Bitch slapped by the Financial Times.

Can anyone spell climbdown?

FT issue was really about subscription data which Apple does not allow by default.
post #27 of 138
Quote:
Originally Posted by Gwydion View Post

Which costs has Amazon to pay when selling their books?

Quote:
Originally Posted by Gwydion View Post

What are not paying?

Amazon will enable in-app purchasing through the app store in their Kindle app at some point, eventually, if not immediately, simply because the disadvantage of doing so will be greater than any perceived advantages of not doing so. They will not, in the end, charge more for these books than through other avenues because it will alienate customers to do so. So they will eventually end up contributing their fair share to the costs of running the app store, where they are essentially a leach developer now, offering a free shell app and selling content out in the street to hide their revenue, and saddling other developers and Apple with picking up the costs of distributing their Kindle app.
post #28 of 138
Quote:
Originally Posted by anonymouse View Post

So they will eventually end up contributing their fair share to the costs of running the app store, where they are essentially a leach developer now, offering a free shell app and selling content out in the street to hide their revenue, and saddling other developers and Apple with picking up the costs of distributing their Kindle app.

Which costs? They pay the costs with their anual developer license.
post #29 of 138
Quote:
Originally Posted by MacRulez View Post

The market will decide the price.

If publishers attempt to recoup Apple's 30% with a higher price, customers will either accept it or not. But at least normal free-market pricing is now possible on the platform. Those who prefer capitalism applaud this move.


More interesting is that this is not the first time that Apple has instigated a counter-productive policy and later woken up:

Apple Blinks. Flash Tools Now Allowed
http://whydoeseverythingsuck.com/201...w-allowed.html

How many times does this have to happen before Apple simply stops making such blunders in the first place?

In a normal world I would agree with you. But for some reason publishers of content have often made poor decisions when it comes to pricing content in the new digital age. Instead of seeing it as a way to reduce costs and increase volume by being more accessible, they see often see as a way to get more revenue per sale. This has been true for music (cassettes to CDs to digital downloads), movies and tv shows, magazines, and newspapers over the years. It makes absolutely no sense that most of the major magazines and newspapers cost less in print than they did on the iPad when this change started.

It's like they see whatever is the hottest new way of experiencing content and they always attempt to set a premium price on it just because the delivery method itself is in demand. It never has to do with actual cost of delivery or take into consideration the ability to increase volume.
post #30 of 138
Quote:
Originally Posted by Scaramanga89 View Post

Bitch slapped by the Financial Times.

Can anyone spell climbdown?

Some people really can't win can they. Apple accused of not listening, they listen and respond and now you're criticising them for doing so?
post #31 of 138
Quote:
Originally Posted by nkhm View Post

Some people really can't win can they. Apple accused of not listening, they listen and respond and now you're criticising them for doing so?


They didn't listen and respond, they tried to bully them into it and had their bluff called. It's a climbdown, however you want to slice it. Apple took a stance and had to back off it. They don't have to do it often, but even the apologists on here must recognize a climbdown when they see one.

Listen and respond. Nice one.
post #32 of 138
Quote:
Originally Posted by Scaramanga89 View Post

Bitch slapped by the Financial Times.

Can anyone spell climbdown?

Can anyone spell "I see the world through the eyes of an abused 13 year old?"
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post #33 of 138
Quote:
Originally Posted by MacRulez View Post

The market will decide the price.

If publishers attempt to recoup Apple's 30% with a higher price, customers will either accept it or not. But at least normal free-market pricing is now possible on the platform. Those who prefer capitalism applaud this move.


More interesting is that this is not the first time that Apple has instigated a counter-productive policy and later woken up:

Apple Blinks. Flash Tools Now Allowed
http://whydoeseverythingsuck.com/201...w-allowed.html

How many times does this have to happen before Apple simply stops making such blunders in the first place?

Yeah! Why isn't apple perfect? It's ridiculous how they test out an idea, take some time to let it play out, and then adjust their position rather than being hardheaded and stubborn. They're such screw ups
post #34 of 138
Quote:
Originally Posted by Gwydion View Post

Which costs? They pay the costs with their anual developer license.

There is really no talking to that guy. He thinks that being on the platform and hosting your own content means you owe Apple money when you allow people to purchase from your servers. Even Apple dont believe that any more.


Heres a trick - the app can now show its website internally. Of course that is not what they want.
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post #35 of 138
Quote:
Originally Posted by halfyearsun View Post

Yeah! Why isn't apple perfect? It's ridiculous how they test out an idea, take some time to let it play out, and then adjust their position rather than being hardheaded and stubborn. They're such screw ups

I like that they do change when the decisions are not well thought out. Kudos.
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post #36 of 138
Quote:
For example. If I buy Angry Birds on my iPad, iPhone and Mac I want to be able to pick up the game and have my game play history match between devices.

Yeah, thats possible now using Apple's API. It always was possible using bespoke API.
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post #37 of 138
I recall being slammed for being concerned about this policy. Good to see that I was right. And good to see that Apple backed down.

Now the interesting fight will be over subscriber data. That's gold for magazines. And they really need that data to deal with advertisers. While I agree with Apple on its stance, it's going to be quite difficult to keep publishers from following the Financial Times out the door if the lack of subscriber data hurts their business case for being on iOS.
post #38 of 138
Quote:
Originally Posted by newagemac View Post

Because higher prices is bad for consumers. Why would a consumer prefer that publishers jack up their prices? I don't see how you can say higher prices for consumers is a good thing unless you are a publisher.

You obviously are completely unaware of what the old policy was and didn't catch error in AI's article. It was the OLD policy that would lead to higher prices because publishers would have to increase the price they charge to make up for the 30% Apple was taking, and the it was Apple who was preventing the publisher from setting a lower price on their own web site. There was no restriction on the publisher setting a higher price on their website.

The only thing the new policy changes is it allows the publisher to set a lower price on their own web site. Everything else is the same. Therefore, good for the consumer.
post #39 of 138
Quote:
Originally Posted by addabox View Post

Can anyone spell "I see the world through the eyes of an abused 13 year old?"

That's a well reasoned and mature comeback.

p.s. Climbdown.
post #40 of 138
Quote:
Originally Posted by Gwydion View Post

Which costs? They pay the costs with their anual developer license.

You're deluded if you think $99/year covers the costs of distributing even one app on the App Store. The App Store runs on, and pays for itself, with a very simple revenue sharing system: if you generate revenue from your app, you share 30% of that revenue with Apple to cover the costs of running the store. The App Store is not a profit generator for Apple, the revenue sharing system is there to cover the costs of running it, and developers/companies whose business model is to give away free apps and sell the content outside the App Store are freeloading on the backs of honest developers.
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