What I'm hearing here is that investors are very worried, as they should be.
There is no way this model is going to survive anti-trust laws.
Apple is starting with 30% knowing full well it's just a number to begin negotiations with.
The anti-competitive policies of not allowing people to have a link to their website etc... are also just there as bargaining chips for the inevitable class action law suit.
The real question is - how desirable is an iDevice that has no content? Because as smart as some people here think they are with all their 'business smarts and clairvoyance'... they always leave out the human factor.
Remember that? The human factor... it's why the Macintosh went from 80% market share to 1.2% in less then a decade.
Make no mistake, Apple is repeating history. iPad will be less then 5% market share in 3 years. I guarantee it (if they stay on this course).
Nobody wants to be on a platform with no content.
Ah, nice to see you back with your usual negative quesstimates.
You make it sound like it's stupid, but just think. Whatever the cost to produce the thing, factor in a profit, that's C+P. Add Apple's cut, that's C+P+A, with A= 30% of C+P.
Still following?
Price can't be higher on the app store per the Apple rule aforementionned, which means inapp = C+P+A < O, with O the outside price.
By pure mathematics, O is now higher than it was earlier.
And since the reseller is NOT going to sell at a loss, and it's highly doubtful P<A with A, remember, equal to 30% of the whole price, you get (C+P+A+O)/2 > original price.
Prices, hence are higher on the iPad because Apple "won't let the publisher charge less on their own web site", Quod Erat Demonstrandum.
I think it's simpler than that. It is significantly easier to find & subscribe to content on an iPad than using some publisher's own web service. The cost of producing content+profit gets evenly divided amongst all subscribers. Publishers can be reasonably be expected to gain more subscribers if their product is available. If ALL subscriptions are done through the app store they only need about 40% more people on a subscription to make more profit at the same price point than they were before. Given the success of the app store I don't think that is unachievable. Not to mention the savings on printing, distribution and selling direct to the consumer.
Yes I agree with you on that one, for in app purchase, 30% is to much indeed. For selling a new app 30% is fair , but once you in-app, there is no more "Apple visiblity" factor to justify such a large cut.
30% isn't too much for app creators; who actually create their products; why is it too much for distributors who are afterall just middlemen?
If 30% is indeed too much, then why don't they just walk away; design, manufacture, market, and service their own devices and systems that millions of paying customers would prefer over the ecosystem that Apple has spent billions creating???
I won't argue that some people will just click in the App Store. Of course that will happen. But it doesn't have to, and that's an important point.
But then, there are other considerations as well. I was involved heavily in publishing through my company, as we did a lot of work for some of them, as well as from my advertising background.
This whole 30% thing is really annoying from the publishers side. If you're paying $5 at the magazine store for a copy, and you buy all of your issues there as many people actually do, you're paying $60 a year for your "subscription". If you actually get a sub, you may be paying $20 instead. Now what does that mean to the publisher? It means that they make more from the magazine store then from your sub. But it also means that you will be forced into getting a copy every month from the sub. No such guarantees from the mag store.
So, what about their costs? Well, it will cost a certain amount to mail those issues to you. Anywhere from $5 a year to almost $20 a year. It also costs to print them. In actuality, many publishers make nothing from their subs directly, or even lose money. Of course, there are other expenses from mag stores as well, such as truck delivery, returns, etc.
But it's the Ad dollars that keeps most magazines afloat, not sub pricing. So really, what they pay a company to handle their subs, as most do (very few do it themselves) also comes out of that sub price. The only advantage they get out of subs is a number they can give for guaranteed circulation, and that determines Ad pricing.
Therefor, this whole argument about Apple's 30% isn't as big a deal as some here think it is. If, and it's a big if, these publishers were successful at selling magazine subs directly electronically, something almost none do as yet, then they MIGHT have something to scream about when it comes to this. But almost none do, and fewer do so successfully. So there's really no way to compare what will happen here vs what's already happening, because nothing is happening now.
I do have Zinio, and I do subscribe to a couple of mags there. But it's not much to write about. It's ok, but not much more than the electronic galleys sent to the printer. Prices are sometimes VERY cheap. Much cheaper than a regular sub for paper. Two examples. One is Harpers Bazaar for $10 a year. Stereophile for $7.50 or so. These are well under the normal paper prices. So what is the argument with Apple then? If they charge the same as the paper sub, or even a couple of bucks less, including Apple's 30% cut, they would be still getting more than they get from Zinio.
This is a made up issue over pricing that doesn't really exist on a business level.
You're confusing most of these screamers by discussing facts. Stop it!
One other sub price issue. Forgot about, but which my wife just reminded me of as I mentioned this discussion. We've subscribed to Architectural Digest for 26 years. Last year we decided to stop. This is, for anyone who hasn't seen the mag, an expensive mag to do, print, and ship.
So what happened? They gave us a free subscription.
So much for costs, prices, and a 30% cut.
Any publisher who is annoyed about that isn't being so because it really means anything to them monetarily.
Of course they should get 30% of each recurring payment, it's called a commission. The initial sale was made through Apple's sales channel. It doesn't matter that you move to another platform to view the content. Apple's not being unfair in this, they said if the subscription was made outside of Apple's platform, then publishers could offer access for free. Apple isn't forcing them to move the recurring payments to Apple's purchasing system. It is just saying when the initial subscription was made from Apple's devices. If a customer is truly concerned, they could cancel the Apple recurring subscription, and start it up again using some other payment method. Chances are, customers aren't going to care.
Apple should get a commission even though they are only getting it because they banned linking to external websites in apps? Apple is forcing them to use the app stores recurring payments if they wish to keep an iOS app. They aren't even allowed to mention that the subscription can be found elsewhere from within the app. On top of that, they are not allowed to offer the subscription elsewhere for less, even though they aren't paying Apple's 30% commission and can afford to lower the price. While consumers may not care about who gets the money they are spending, they will care when the prices of their subscription content increase to accommodate this change, and because of the price matching rule, even non iOS users will be affected. Apple is using its strong market position to monetize a market it previously didn't have access to.
Quote:
How is that? I subscribed to Netflix through their website, and I use my iPad to access and watch Netflix content. Apple will NEVER see any of that money. I don't understand how this forces me to subscribe through Apple at any point in the future?
I never said that it did.
Quote:
I could understand the complete meltdown people are having if Apple said, "The only way iOS users will EVER view your content, is if they cancel current subscriptions and resubscribe through AIP." But they aren't saying, and they're not requiring anything that isn't done elsewhere. Anytime a subscription is made through an agent of publisher, the agent gets a commission for as long as that subscription is active. For each recurring payment the agent will get a percentage. This is normal. It doesn't matter if the user switches from print to digital, from Android to iOS. That initial subscription only exists because of the agent.
30% isn't normal. If you read my posts, I've said that Apple probably does deserve some compensation for hosting the app. They just shouldn't be forcing this 30% subscription model on content providers wishing to have an iOS app. If you disagree, wait a couple months for the fallout.
PS: This applies to any purchase initiated through an app. For example a Kindle book. If Amazon stays on iOS (which is far from a given), they will probably want to raise prices to cover this 30% cut Apple's taking and they will convince the publishers to do so. Because Apple requires the iOS price to be the same or lower as anywhere else, the prices on Kindle.com will go up as well. Now Amazon requires that their prices be the lowest as well, so the publishers will increase the prices at Apple's iBook Store too (as well as B&N and others). No matter where you shop for eBooks, it's quite likely that prices your prices will go up. The loser here is the consumer, and the only winner is Apple. When companies throw their weight around like that, they do get noticed by certain authorities.
Yes there is a Kindle app store. And you can buy Kindle and Nooks ebooks without paying Apple a cut.. use the device store!
But you can't buy Apple products or use iBooks on your Kindle or Nook? Why not? How is this fair? Why are Amazon and B&N forcing me to buy books and use their apps on their devices. Oh, it's so awful for the consumer. Blah, blah, blah.
I don't quite understand this logic. Apple is not out to screw over their customers in what they're doing. They are in fact, trying to get a cut of what others are making from Apple's platform and customers. Apple supplies a market/platform to resellers and publishers, why shouldn't they get something from that? Especially if those others are taking advantage of the platforms size?
And sorry if you can't seem to understand that this is how it works everywhere already...
(snip)
Indeed. I believe that's what I wrote. What were you reading??
I just want to know what this means for the Kindle App.
It means you'll have to type in www.amazon.com yourself to buy books from the Kindle Store. Oh, and the Kindle app will finally allow purchasing books. Other than that, nothing.
Probably not, but for you, I'll make an exception.
Fact: If a customer would rather buy through Apple than a publisher's website ... it's likely because they find it easier, more trusting or a whole bunch of other reasons I don't even know about ..... but to be sure, no matter what the reason ... it's all part of the Apple ecosystem that they have been building for years and years..... and belonging to that ecosystem has a price .... for everyone. Like me, the publishers have the right to belong ... or not .... their choice.
All Apple is saying is ... if you're using our ecosystem to gain customers (mostly with a free app that Apple makes nothing on) then you have to give those same customers the opportunity to buy through the same store that you found them in .... at the same price as on your website. Totally fair, imo.
Fact: When buying anything, (content or subscriptions) through iTunes ... there is a "billing cost" to Apple. If one uses a credit card, other than iTunes gift cards, a fee is charged to apple, as the retailer.
If an iTunes "gift card" is used .... that same card had to be sold through one of the many 100s of retailers and a "fee" was paid to the retailer .... because you know nobody sells them for nothing.
Apple has a cost to bear with every purchase through the iTunes store and if a "content provider" does not want to pay to belong ..... then don't belong. It's just that simple.
Note: Apple is not automatically wrong when we don't understand ... but they are always wrong to a troll .... because the Trolls cannot stand success.
True, but the problem is they have to also offer the subscription @ the same price in the app so apple gets it cut. and you cant link to the out of app store inside of the app.
So 1) there is no instinctive for the user to purchase outside of the app. 2)Who knows if they will even know the can buy a subscription out side of the app.
Im all for apple getting something but 30% of subscriptions is ridiculous. maybe they should have required apps that have subscriptions have to be a paid apps.
Gee, if the user doesn't want to use out of app purchase, or doesn't even know how to purchase out of app, doesn't that prove the entire point for Apple that it was Apple that brought in this particular customer?
Comments
What I'm hearing here is that investors are very worried, as they should be.
There is no way this model is going to survive anti-trust laws.
Apple is starting with 30% knowing full well it's just a number to begin negotiations with.
The anti-competitive policies of not allowing people to have a link to their website etc... are also just there as bargaining chips for the inevitable class action law suit.
The real question is - how desirable is an iDevice that has no content? Because as smart as some people here think they are with all their 'business smarts and clairvoyance'... they always leave out the human factor.
Remember that? The human factor... it's why the Macintosh went from 80% market share to 1.2% in less then a decade.
Make no mistake, Apple is repeating history. iPad will be less then 5% market share in 3 years. I guarantee it (if they stay on this course).
Nobody wants to be on a platform with no content.
Ah, nice to see you back with your usual negative quesstimates.
He's damn right.
You make it sound like it's stupid, but just think. Whatever the cost to produce the thing, factor in a profit, that's C+P. Add Apple's cut, that's C+P+A, with A= 30% of C+P.
Still following?
Price can't be higher on the app store per the Apple rule aforementionned, which means inapp = C+P+A < O, with O the outside price.
By pure mathematics, O is now higher than it was earlier.
And since the reseller is NOT going to sell at a loss, and it's highly doubtful P<A with A, remember, equal to 30% of the whole price, you get (C+P+A+O)/2 > original price.
Prices, hence are higher on the iPad because Apple "won't let the publisher charge less on their own web site", Quod Erat Demonstrandum.
I think it's simpler than that. It is significantly easier to find & subscribe to content on an iPad than using some publisher's own web service. The cost of producing content+profit gets evenly divided amongst all subscribers. Publishers can be reasonably be expected to gain more subscribers if their product is available. If ALL subscriptions are done through the app store they only need about 40% more people on a subscription to make more profit at the same price point than they were before. Given the success of the app store I don't think that is unachievable. Not to mention the savings on printing, distribution and selling direct to the consumer.
Yes. But what that doesn't say, is that you can get that sub directly, and then, Apple gets nothing.
Ah, but the reality is that they de facto force the in-app purchase making difficult to make it outside the app if using the iPhone or iPad.
Yes I agree with you on that one, for in app purchase, 30% is to much indeed. For selling a new app 30% is fair , but once you in-app, there is no more "Apple visiblity" factor to justify such a large cut.
30% isn't too much for app creators; who actually create their products; why is it too much for distributors who are afterall just middlemen?
If 30% is indeed too much, then why don't they just walk away; design, manufacture, market, and service their own devices and systems that millions of paying customers would prefer over the ecosystem that Apple has spent billions creating???
I won't argue that some people will just click in the App Store. Of course that will happen. But it doesn't have to, and that's an important point.
But then, there are other considerations as well. I was involved heavily in publishing through my company, as we did a lot of work for some of them, as well as from my advertising background.
This whole 30% thing is really annoying from the publishers side. If you're paying $5 at the magazine store for a copy, and you buy all of your issues there as many people actually do, you're paying $60 a year for your "subscription". If you actually get a sub, you may be paying $20 instead. Now what does that mean to the publisher? It means that they make more from the magazine store then from your sub. But it also means that you will be forced into getting a copy every month from the sub. No such guarantees from the mag store.
So, what about their costs? Well, it will cost a certain amount to mail those issues to you. Anywhere from $5 a year to almost $20 a year. It also costs to print them. In actuality, many publishers make nothing from their subs directly, or even lose money. Of course, there are other expenses from mag stores as well, such as truck delivery, returns, etc.
But it's the Ad dollars that keeps most magazines afloat, not sub pricing. So really, what they pay a company to handle their subs, as most do (very few do it themselves) also comes out of that sub price. The only advantage they get out of subs is a number they can give for guaranteed circulation, and that determines Ad pricing.
Therefor, this whole argument about Apple's 30% isn't as big a deal as some here think it is. If, and it's a big if, these publishers were successful at selling magazine subs directly electronically, something almost none do as yet, then they MIGHT have something to scream about when it comes to this. But almost none do, and fewer do so successfully. So there's really no way to compare what will happen here vs what's already happening, because nothing is happening now.
I do have Zinio, and I do subscribe to a couple of mags there. But it's not much to write about. It's ok, but not much more than the electronic galleys sent to the printer. Prices are sometimes VERY cheap. Much cheaper than a regular sub for paper. Two examples. One is Harpers Bazaar for $10 a year. Stereophile for $7.50 or so. These are well under the normal paper prices. So what is the argument with Apple then? If they charge the same as the paper sub, or even a couple of bucks less, including Apple's 30% cut, they would be still getting more than they get from Zinio.
This is a made up issue over pricing that doesn't really exist on a business level.
You're confusing most of these screamers by discussing facts. Stop it!
So what happened? They gave us a free subscription.
So much for costs, prices, and a 30% cut.
Any publisher who is annoyed about that isn't being so because it really means anything to them monetarily.
Ah, but the reality is that they de facto force the in-app purchase making difficult to make it outside the app if using the iPhone or iPad.
Maybe so, but read my other two posts on sub pricing.
Of course they should get 30% of each recurring payment, it's called a commission. The initial sale was made through Apple's sales channel. It doesn't matter that you move to another platform to view the content. Apple's not being unfair in this, they said if the subscription was made outside of Apple's platform, then publishers could offer access for free. Apple isn't forcing them to move the recurring payments to Apple's purchasing system. It is just saying when the initial subscription was made from Apple's devices. If a customer is truly concerned, they could cancel the Apple recurring subscription, and start it up again using some other payment method. Chances are, customers aren't going to care.
Apple should get a commission even though they are only getting it because they banned linking to external websites in apps? Apple is forcing them to use the app stores recurring payments if they wish to keep an iOS app. They aren't even allowed to mention that the subscription can be found elsewhere from within the app. On top of that, they are not allowed to offer the subscription elsewhere for less, even though they aren't paying Apple's 30% commission and can afford to lower the price. While consumers may not care about who gets the money they are spending, they will care when the prices of their subscription content increase to accommodate this change, and because of the price matching rule, even non iOS users will be affected. Apple is using its strong market position to monetize a market it previously didn't have access to.
How is that? I subscribed to Netflix through their website, and I use my iPad to access and watch Netflix content. Apple will NEVER see any of that money. I don't understand how this forces me to subscribe through Apple at any point in the future?
I never said that it did.
I could understand the complete meltdown people are having if Apple said, "The only way iOS users will EVER view your content, is if they cancel current subscriptions and resubscribe through AIP." But they aren't saying, and they're not requiring anything that isn't done elsewhere. Anytime a subscription is made through an agent of publisher, the agent gets a commission for as long as that subscription is active. For each recurring payment the agent will get a percentage. This is normal. It doesn't matter if the user switches from print to digital, from Android to iOS. That initial subscription only exists because of the agent.
30% isn't normal. If you read my posts, I've said that Apple probably does deserve some compensation for hosting the app. They just shouldn't be forcing this 30% subscription model on content providers wishing to have an iOS app. If you disagree, wait a couple months for the fallout.
PS: This applies to any purchase initiated through an app. For example a Kindle book. If Amazon stays on iOS (which is far from a given), they will probably want to raise prices to cover this 30% cut Apple's taking and they will convince the publishers to do so. Because Apple requires the iOS price to be the same or lower as anywhere else, the prices on Kindle.com will go up as well. Now Amazon requires that their prices be the lowest as well, so the publishers will increase the prices at Apple's iBook Store too (as well as B&N and others). No matter where you shop for eBooks, it's quite likely that prices your prices will go up. The loser here is the consumer, and the only winner is Apple. When companies throw their weight around like that, they do get noticed by certain authorities.
Yes there is a Kindle app store. And you can buy Kindle and Nooks ebooks without paying Apple a cut.. use the device store!
But you can't buy Apple products or use iBooks on your Kindle or Nook? Why not? How is this fair? Why are Amazon and B&N forcing me to buy books and use their apps on their devices. Oh, it's so awful for the consumer. Blah, blah, blah.
Maybe so, but read my other two posts on sub pricing.
Well, but they are more about print subscriptions, not about Pandora, Netflix, Hulu subscriptions or one time purchases like books, music or video
I don't quite understand this logic. Apple is not out to screw over their customers in what they're doing. They are in fact, trying to get a cut of what others are making from Apple's platform and customers. Apple supplies a market/platform to resellers and publishers, why shouldn't they get something from that? Especially if those others are taking advantage of the platforms size?
And sorry if you can't seem to understand that this is how it works everywhere already...
(snip)
Indeed. I believe that's what I wrote. What were you reading??
Believe it or not Amazon not only do their own hosting, they could, if allowed do their own IAP. Apple is demanding rent for being on the iPad.
And if you, asdasd, wanted to open your own book store on the Amazon web site.... Amazon would charge you:
A RENT of $ 39.99 per month
A referral fee (or COMMISSION) of 15% of the product price.
Plus a variable closing fee or a TAX of $1.35 per item.
Greedy fuckin' bastards!
http://www.amazonservices.com/conten...on-amazon.htm?
It's also a monopolistic ploy, no way would they even contemplate this were they at 5% of the tablet market.
Yes I am sure that if Amazon only had twelve unique visitors per month, the fees above would be much lower.
And if you, asdasd, wanted to open your own book store on the Amazon web site.... Amazon would charge you:
A RENT of $ 39.99 per month
A referral fee (or COMMISSION) of 15% of the product price.
Plus a variable closing fee or a TAX of $1.35 per item.
Greedy fuckin' bastards!
http://www.amazonservices.com/conten...on-amazon.htm?
Yes I am sure that if Amazon only had twelve unique visitors per month, the fees above would be much lower.
But Amazon/B&N/Netflix/etc doesn't have any store on the App Store
I just want to know what this means for the Kindle App.
It means you'll have to type in www.amazon.com yourself to buy books from the Kindle Store. Oh, and the Kindle app will finally allow purchasing books. Other than that, nothing.
They dont host any content.
( is it worth replying to every moron, I wonder?)
Probably not, but for you, I'll make an exception.
Fact: If a customer would rather buy through Apple than a publisher's website ... it's likely because they find it easier, more trusting or a whole bunch of other reasons I don't even know about ..... but to be sure, no matter what the reason ... it's all part of the Apple ecosystem that they have been building for years and years..... and belonging to that ecosystem has a price .... for everyone. Like me, the publishers have the right to belong ... or not .... their choice.
All Apple is saying is ... if you're using our ecosystem to gain customers (mostly with a free app that Apple makes nothing on) then you have to give those same customers the opportunity to buy through the same store that you found them in .... at the same price as on your website. Totally fair, imo.
Fact: When buying anything, (content or subscriptions) through iTunes ... there is a "billing cost" to Apple. If one uses a credit card, other than iTunes gift cards, a fee is charged to apple, as the retailer.
If an iTunes "gift card" is used .... that same card had to be sold through one of the many 100s of retailers and a "fee" was paid to the retailer .... because you know nobody sells them for nothing.
Apple has a cost to bear with every purchase through the iTunes store and if a "content provider" does not want to pay to belong ..... then don't belong. It's just that simple.
Note: Apple is not automatically wrong when we don't understand ... but they are always wrong to a troll .... because the Trolls cannot stand success.
But Amazon/B&N/Netflix/etc doesn't have any store on the App Store
And, Apple's apps are not sold through Amazon, B&N, Netflix etc.
What's your point?
And if you, asdasd, wanted to open your own book store on the Amazon web site.... Amazon would charge you:
And, Apple's apps are not sold through Amazon, B&N, Netflix etc.
What's your point?
This point
Incorrect analogy, Apple is not distributing anything.
They are distributing "access to content" through a billing system that they incur a cost to run.
They are distributing "access to content" through a billing system that they incur a cost to run.
No, they are FORCED to "accesss to content" through a billing system
True, but the problem is they have to also offer the subscription @ the same price in the app so apple gets it cut. and you cant link to the out of app store inside of the app.
So 1) there is no instinctive for the user to purchase outside of the app. 2)Who knows if they will even know the can buy a subscription out side of the app.
Im all for apple getting something but 30% of subscriptions is ridiculous. maybe they should have required apps that have subscriptions have to be a paid apps.
Gee, if the user doesn't want to use out of app purchase, or doesn't even know how to purchase out of app, doesn't that prove the entire point for Apple that it was Apple that brought in this particular customer?