We do agree that business is business. We disagree that this move will be best for Apple in the long-term. You may be right but I have a feeling that Apple will be making some adjustments in their subscription pricing.
I have no doubt they will make adjustments - this is virgin territory. But it won't be a substantial reversal that many are insisting Apple will be forced into. Just like Apple has tweaked the App Store but hardly capitulated in the review process like many insisted they would be forced to.
I don't know but it doesn't mind, I'm taling about margins, not ads.
So, you don't think ads contribute to margins?
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And I don't think Netflix or Amazon have so many incoming from advertisers
Just how many new subscribers do you think Netflix will get via iOS vs. their traditional methods? Why is everyone acting like Apple is going to take a cut of all Netflix subscribers who use iOS?
As for Amazon, I find it absolutely hysterical that in Apple vs. Amazon people are painting Amazon as a victim here. Whether it's due to bias or ignorance it's completely insane. Amazon has been screwing publishers for years but now all the sudden they are the good guys and Apple is monopolistic?
HAHAHAHA! Gawd people really will believe whatever they can rationalize and damn the inconvenient truths...
As for Amazon, I find it absolutely hysterical that in Apple vs. Amazon people are painting Amazon as a victim here. Whether it's due to bias or ignorance it's completely insane. Amazon has been screwing publishers for years but now all the sudden they are the good guys and Apple is monopolistic?
HAHAHAHA! Gawd people really will believe whatever they can rationalize and damn the inconvenient truths...
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue. The fact that Amazon has been "screwing" publishers is not an argument - or rather it is an argument du tuque, or "whataboutary". It says nothing about the original argument ( which you cant argue) but turns the attack back on another company.
So what if Amazon were once involved in shady practices, that does not mean that Apple is not screwing them, and worse, since Amazon have no business model ( on the iPad) and publishers clearly do on Amazon. Nor do ( as we have seen) Rhapsody, Spotify and so on.
In fact Apple probably wants to clear it's competitors out.
As for the iPad generating more customers for Time Inc,and the Economist, these claims are dubious. There are 300,000 applications on the store, 50,000+ iPad only, or universal.
People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers. There reason to get onto tablets is probably not to gain any new net subscribers, but not to lose subscribers to competitors. You either read this stuff or you dont. Thats why they are offering the service to existing subscribers, there is no gain in profit if you add functionality to an existing user base, you are just trying to keep them.
There is something else - these magazines are more important at generating opinion - particularly in the business world - than any others. Apple is nowhere near as important as it thinks it is, pixels and code does not make opinions - a few front page articles on Time, the Economist and the Financial Times about how Apple has lost the plot, with pictures of a rotten Apple; and then it will definitely have lost the game.
This is a like Oasis coming to America and telling everybody they hated it. Pissing off newspaper publishers is the stupidest idea ever.
Absolutely. That's[70% of new sales is better than no new sales] the key point that is completely sailing over the complainers heads.
This is an example of the inconvenient truth ignored by the apologists.
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Just how many new subscribers do you think Netflix will get via iOS vs. their traditional methods? Why is everyone acting like Apple is going to take a cut of all Netflix subscribers who use iOS?
If they are using the app on the iPad when it comes to renewal day, then the easiest thing is to renew in the app. Thats why Apple has forced the subscription button to be in the app in the first place - to get a cut. What this means for NetFlix is that the more of their existing customers they get onto iOS the more their total revenue across all platforms drops. If an existing customer is accessing netflix on an Android phone, and a website, the day he buys an iPad is the day the margin gained from him potentially drops to zero ( or on renewal day) and rather than creating new markets, Apple have removed profit from existing users.
Of course Netflix could try and email people before renewal day and link to the website. The thing is though, that Apple have proven that they change the reading of their own documents at will, and then re-write the text. Eventually they will make that illegal.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Where were you when Amazon demanded 70% (That's seventy!) of publishers subscription rates?
Aren't we forgetting that magazines and newspapers do not receive the same level of visibility as books do via iBooks. They currently either publish their own app (like 'The Australian' newspaper or 'Wired') or they sit inside a virtual news shelf like the Zinio app.
Wouldn't a magazine or newspaper publisher expect similar exposure in iOS that books receive - in return for a 30% cut? There are no "Mags" or "Newspapers" buttons in iTunes and there are no Apple created iMags or iNews Apps. Shouldn't there be?
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue.
They aren't meant to. Amazon, except in a few cases, are not content producers anyway.
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So what if Amazon were once involved in shady practices, that does not mean that Apple is not screwing them, and worse, since Amazon have no business model ( on the iPad) and publishers clearly do on Amazon. Nor do ( as we have seen) Rhapsody, Spotify and so on.
And publishers clearly do on iBooks.
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In fact Apple probably wants to clear it's competitors out.
Freeloading competitors.
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As for the iPad generating more customers for Time Inc,and the Economist, these claims are dubious. There are 300,000 applications on the store, 50,000+ iPad only, or universal.
If Apple isn't generating customers then Apple's cut is 0%.
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People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers.
And if they are current subscribers Apple's cut is 0%.
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There reason to get onto tablets is probably not to gain any new net subscribers, but not to lose subscribers to competitors. You either read this stuff or you dont. Thats why they are offering the service to existing subscribers, there is no gain in profit if you add functionality to an existing user base, you are just trying to keep them.
In which case Apples cut is 0%.
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This is a like Oasis coming to America and telling everybody they hated it. Pissing off newspaper publishers is the stupidest idea ever.
Given that Amazon only offered the Dallas Morning News paper 30% net with obnoxious clauses I don't think newspapers and publishers are all that pissed off at Apple. This was the state of the biz in 2009 and Amazon was pissing off newspaper publishes big time with virtually no consequences (beyond a Senate testimony or two).
Murdoch:
"We will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control our relationships with our customers. Any device maker or website which doesn?t meet these basic criteria on content will not be doing business long-term with News Corporation."
Apple has provided newspaper publishers a partial concession in terms of control of their relationship with customers...as long as it is the publisher that brings the customer in they get all the customers data. If Apple brings the customer then the customer has to agree to provide all the information.
That the Daily launched on the iPad is a strong indicator that Murdoch is at least tolerant of this compromise. The 30% sure as hell doesn't bother him.
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Originally Posted by asdasd
This is an example of the inconvenient truth ignored by the apologists.
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
Given that the prior business arrangement was 70% for Amazon and 30% for the newspaper publisher then there's a hell of a lot of new profit to be gained.
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2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
It's not nonsense. It does depend on how good those magazines transitions to the digital medium but these magazines will find new subs if they offer compelling digital media that they do not currently have.
To claim otherwise is nonsense.
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In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Given that Murdoch just launched the Daily it seems to me they're not unhappy. Plus Murdoch knows that their tablet/reader was DOA so getting 70% of the take from a working ecosystem selling millions of units is awesome.
Is Google's 90% better? Sure. I'm sure the major publishers are trying to negotiate sweetheart deals with Apple. The Daily probably isn't paying 30%. Which is why all the silence on the matter.
The only people screaming are the resellers without actual content of their own and no value added to Apple in a relationship.
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue. The fact that Amazon has been "screwing" publishers is not an argument - or rather it is an argument du tuque, or "whataboutary". It says nothing about the original argument ( which you cant argue) but turns the attack back on another company.
I am not trying to switch the argument to attacking Amazon. I mentioned their original Kindle revenue split as an example of real "screwing".
Amazon has subsequently reversed the rate to 70/30 in favour of the publishers. However that appears to be after "service" costs have been deducted. Basically a cost per MB for the free download aspect of the Kindle. That brings the publishers share to closer to 60%.
Right now, on Amazon's web site, I count over 180 publications available through subscriptions. If those guys are happy with earning 60% of the fees from (potentially) millions of Kindle customers.... what is the problem with earning 70% from (potentially) tens of millions of iOS customers?
Just a thought... Wouldnt it be possible for all these companies to create payment processing through a mobile formatted website accessed via safari first. So you could buy all your subscriptions to magazines etc that way then have their corresponding iOS app as a login reading app and only then download/read/access whatever they have paid? Just like what you can do with skype.
Is Google's 90% better? Sure. I'm sure the major publishers are trying to negotiate sweetheart deals with Apple. The Daily probably isn't paying 30%. Which is why all the silence on the matter.
Murdoch confirmed the 30% revenue share for the first year in an interview:
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Cavuto: Now, is it taking a third here?
Murdoch: At least the first year, yes. We’ll be getting $0.70.
He also stated that he hopes that News Corps' share increases after the first year.
Maybe Apple should hold off on occasion to see what Google is going to do. Google can't wait forever so they're going to have to lay down their cards at some point if Apple holds its hand tight.
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Originally Posted by ddawson100
Don't bother. I think you said it well enough above. Clearly 30% is a big commission to swallow. There are clearly positives and negatives to be ironed out here but Apple has drawn the line and we'll see if someone blinks.
A company, whether dealing solely in bits like Netflix's streaming or with legacy media like magazine/newspapers, needs subscribers but handing over 30% may be a non-starter simply if you look at the margins. They can't lose money on each customer and expect to make it up in bulk.
But this clearly changes the whole equation. There are savings from having Apple (and the internet) participate in distribution but the big question is whether you're going to realize enough savings to justify handing over 30%. Any company would prefer less of course but there's a big negotiation going on right now. It's fun to watch from the sidelines as we ALL can watch it as it plays out.
Competition is healthy. The fact that apple acts worse than Microsoft did in the 90s is worrying to say the least. Apple can't be in control over everything and needs to realise this. It's only a matter of time before Apple runs into trouble with the law, and that governments will be forced to step in to give real freedom of choice to customers across the world, just as had to happen with Microsoft.
Sure the Apple app store and the iphone had a smaller install base back on their respective releases, but eventually there comes a time when a company who has overwhelming product saturation in the market gets too big for its own good, and chooses to bully and force everyone into meeting their demands. It's Apple's way or the highway, and that is in no way healthy for anyone.
However because the apple market is something developers can't ignore, they are forced to comply and give in to apple's demands. And this defines the danger of a monopoly.
I cannot understand the apple fanboys on this forum rooting for apple no matter what fiendish schemes they come up with and force upon the community and developers. It's worrying. Even more so the bash-everything-but-Apple stance the articles on this site publishes is outrageous - its like Apple Insider will bash any and every Apple competitor that comes up with better ideas than it, heaven forbid. You can have a site focused and favourable towards Apple, without making trash articles about how crap the competition is, when clearly the competition is real. Very real. And very very powerful. It seems this bashing has gotten worse as the competitors have gotten stronger. Android is ripping away Apple's customers and Apple is doing nothing to help itself by digging its heels in deeper with their outrageous policies.
A monopoly is not good for customers. Choice is good for customers. The mobile market has some insane followers. It's far worse than the game console scene.
No one platform beats the others. iOS and Android (and the other platforms) provide a choice to customers, all which come with good and bad features. Choice is good. If you have a huge monopoly, innovation will be slow, boring and wont offer anything new, and they could charge whatever they want.
Frankly, Apple has become greedy. And what better way to put them in their place than Google.
After all, Google can work without Apple, but Apple can't work without Google.
People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers.
Then if your suppositions are correct, we are back to this being yet another tempest in a teapot since "regular subscribers" wouldn't be subscribing through an in-app purchase and therefore would not be subject to the 30%.
Thanks for re-enforcing the central point that this isn't a big deal and that no one will be jumping ship
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
The idea that subscriptions account for a significant portion of revenue/profit is ridiculous and just further demonstrates how little you truly understand of the back end of publishing.
Earlier in this thread someone pointed out why there is a significant discount for subscribing through the publisher vs. paying the news stand price. Scroll back, find it, and become educated.
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2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
If it's nonsense then so is the fuss about the 30% cut since if people don't subscribe via the in-app purchase there is no cut.
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In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
The only thing we can assume is there will be posturing and positioning by those who wish to get a better deal.
Making any kind of assumption without being at least minimally informed leads to - well, your malformed opinions that have little basis in reality but make for good forum posting.
If they are using the app on the iPad when it comes to renewal day, then the easiest thing is to renew in the app.
Wait, I thought you said that the iOS was a minority use and marginal in value. If so, odds are they won't be in an iOS device on "renewal day"
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Thats why Apple has forced the subscription button to be in the app in the first place - to get a cut.
If the user isn't in the iOS app on "renewal day", then Apple won't be present to "get a cut".
However, if the user is present and the renewal via the iOS app is the easiest and most expedient for the user, then that convenience should be worth something - hence Apple wanting their "cut".
At the end of the day iOS has value or it doesn't. If it doesn't, the whole argument about the Apple "cut" is moot since they won't have the opportunity to get it in the first place. However, if being in the iOS universe does have value, why shouldn't Apple get their "cut"?
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What this means for NetFlix is that the more of their existing customers they get onto iOS the more their total revenue across all platforms drops.
Only if people start shifing to subscribing through the iOS app. I'm an existing Netflix subscriber and I auto-renew via credit card on their web site - like 100% of their current subscribers. What exactly is the risk of me switching from renewing via the web to the Netflix iOS app? (let me spell it out for you - ZERO!)
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If an existing customer is accessing netflix on an Android phone, and a website, the day he buys an iPad is the day the margin gained from him potentially drops to zero ( or on renewal day) and rather than creating new markets, Apple have removed profit from existing users.
Huh? By simply accessing Netflix from an iOS device Netflix margin drops?
This right here proves that you have no flipping clue about what you are talking about. None what so ever.
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Of course Netflix could try and email people before renewal day and link to the website.
Huh? Why would they have to do this? You move from simply uniformed to incoherent.
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The thing is though, that Apple have proven that they change the reading of their own documents at will, and then re-write the text. Eventually they will make that illegal.
Whoops, looks like I judged you incoherent a little too soon. The terms were in Apple's T&C's all along - they weren't strictly enforced since Apple didn't have a fully developed solution. Now they do.
Damn Apple for hiding their true intentions in plain sight all along!
The "logic" displayed in this thread is truly boggling...
The fact that apple acts worse than Microsoft did in the 90s is worrying to say the least.
What a bunch of crap. When Apple starts modifying it's OS's so applications from direct competitors won't run and starts "investing" in new market areas by selling products at a loss to freeze competitors out then you can compare Apple to MS.
They don't do that, never have and your attack is the hight of BS.
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Apple can't be in control over everything
Well it will be a relief then for you to know that Apple doesn't want to control "everything", just the user experience for those that use their products.
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It's only a matter of time before Apple runs into trouble with the law
Really? Care to cite this "law" that Apple will be running into trouble with?
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governments will be forced to step in to give real freedom of choice to customers across the world
Yup, because governments have through the history of humanity been so good at "giving" freedom.
What another load of revisionist crap. Sigh. Those who fail to understand history....
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Sure the Apple app store and the iphone had a smaller install base back on their respective releases, but eventually there comes a time when a company who has overwhelming product saturation in the market gets too big for its own good
Well, it's a good thing Android growth is outpacing iOS growth and we won't have to worry about that happening. No need for government regulation then either.
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chooses to bully and force everyone into meeting their demands.
Neat trick for a company with minority market share now, isn't it?
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It's Apple's way or the highway, and that is in no way healthy for anyone.
Funny, did someone from Apple force you to conform to the "Apple way" at gunpoint or something?
What's unhealthy is for intolerant people who think that every company should conform to their narrow world view. I like the choice and model that Apple provides via the iOS ecosystem.
if you don't, choose Android or something else. But stop trying to restrict my choice in ecosystems by dictating what Apple does either through advocating government regulation or other such nonsense.
Ironic, isn't it, that the only one actually advocating the forcing of anything is you?
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However because the apple market is something developers can't ignore, they are forced to comply and give in to apple's demands.
Developers can ignore the iOS ecosystem if they want to, but they would be crazy to since it's wildly profitable.
I cannot understand the apple fanboys on this forum rooting for apple no matter what fiendish schemes they come up with and force upon the community and developers.
Aha! We come to the root of the issue!
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It's worrying.
I can imagine. Damn those upstarts at Apple - actually focusing on the end users and not the developers!
Except by forcing developers to focus on the end users they have made them tons of money.
Those bastards!
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Even more so the bash-everything-but-Apple stance the articles on this site publishes is outrageous - its like Apple Insider will bash any and every Apple competitor that comes up with better ideas than it, heaven forbid.
1) It's an unabashed Apple fan site. Duh.
2) When someone comes up with something better and Apple stops syphoning off 90% of the profit with less than 20% of the market share you might have a point. Otherwise your just whining.
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You can have a site focused and favourable towards Apple, without making trash articles about how crap the competition is
You could, but it would be boring. Like Engadget.
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when clearly the competition is real.
Talk is cheap - prove it.
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Very real.
didn't get the memo, eh?
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And very very powerful.
Again, talk is cheap. How many "iPad Killers" are shipping? How many will ship before the next generation iPad is released and once again probably sets the bar even higher?
Is that your definition of powerful competition? What again exactly is Apple supposed to be worried about?
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It seems this bashing has gotten worse as the competitors have gotten stronger.
Replace "stronger" with "more desperate" and you might be on to something...
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Android is ripping away Apple's customers
Apple is selling every device as fast as they can make them. Android is doing nothing to Apple's customers - Apple's customers are having no problem finding and seeking out Apple's products.
Android is gaining market share because it's given away. Many people have Android just because it was there by default. Not because they sought it out.
Every iOS user has it because they sought it out.
That's a substantial and significant difference.
And why Apple owns the majority of profit with a minority share.
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and Apple is doing nothing to help itself by digging its heels in deeper with their outrageous policies.
Outrageous policies like putting the customer first? I think they need to keep digging away!
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A monopoly is not good for customers.
Which is why it's a good thing we don't have one.
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Choice is good for customers.
I agree. Go develop for Android if you choose.
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The mobile market has some insane followers.
Agreed. So stop trying to limit my choice already and go elsewhere if Apple rubs you the wrong way so bad.
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It's far worse than the game console scene.
Doubtful. Their holy wars make this look like patty cake.
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No one platform beats the others.
Um, that's where you would be wrong - iOS is beating the tar out of everyone else in the one metric that matters most to people. Well, people who enjoy putting food on the table and having nice things - and that's profit!
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iOS and Android (and the other platforms) provide a choice to customers, all which come with good and bad features. Choice is good.
I'm glad you acknowledge we have choice!
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If you have a huge monopoly, innovation will be slow, boring and wont offer anything new, and they could charge whatever they want.
So if we have so much choice and Apple is doing so many wrong things and loosing so many customers, why are you so concerned about this so-called "monopoly"?
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Frankly, Apple has become greedy. And what better way to put them in their place than Google.
HAHAHAHA - this statement is so rich in irony on multiple levels that any further commentary I could provide would simply diminish the pure irrationality of it...
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After all, Google can work without Apple, but Apple can't work without Google.
Yeah, whatever. Which company is a one trick pony when it comes to revenue streams and which one is diversified with at least five or six separate revenue streams?
Which one has a bigger market cap?
Who needs whom again?
Are you sure you really want to rant about Apple fanboi's?
Comments
We do agree that business is business. We disagree that this move will be best for Apple in the long-term. You may be right but I have a feeling that Apple will be making some adjustments in their subscription pricing.
I have no doubt they will make adjustments - this is virgin territory. But it won't be a substantial reversal that many are insisting Apple will be forced into. Just like Apple has tweaked the App Store but hardly capitulated in the review process like many insisted they would be forced to.
If margins are below 30%, how 70% of new sales are better?
Question - do you think publishers make more money from subscriptions or advertising?
Your answer to that question will answer your question I quoted.
Question - do you think publishers make more money from subscriptions or advertising?
Your answer to that question will answer your question I quoted.
I don't know but it doesn't mind, I'm taling about margins, not ads.
And I don't think Netflix or Amazon have so many incoming from advertisers
I don't know but it doesn't mind, I'm taling about margins, not ads.
So, you don't think ads contribute to margins?
And I don't think Netflix or Amazon have so many incoming from advertisers
Just how many new subscribers do you think Netflix will get via iOS vs. their traditional methods? Why is everyone acting like Apple is going to take a cut of all Netflix subscribers who use iOS?
As for Amazon, I find it absolutely hysterical that in Apple vs. Amazon people are painting Amazon as a victim here. Whether it's due to bias or ignorance it's completely insane. Amazon has been screwing publishers for years but now all the sudden they are the good guys and Apple is monopolistic?
HAHAHAHA! Gawd people really will believe whatever they can rationalize and damn the inconvenient truths...
As for Amazon, I find it absolutely hysterical that in Apple vs. Amazon people are painting Amazon as a victim here. Whether it's due to bias or ignorance it's completely insane. Amazon has been screwing publishers for years but now all the sudden they are the good guys and Apple is monopolistic?
HAHAHAHA! Gawd people really will believe whatever they can rationalize and damn the inconvenient truths...
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue. The fact that Amazon has been "screwing" publishers is not an argument - or rather it is an argument du tuque, or "whataboutary". It says nothing about the original argument ( which you cant argue) but turns the attack back on another company.
So what if Amazon were once involved in shady practices, that does not mean that Apple is not screwing them, and worse, since Amazon have no business model ( on the iPad) and publishers clearly do on Amazon. Nor do ( as we have seen) Rhapsody, Spotify and so on.
In fact Apple probably wants to clear it's competitors out.
As for the iPad generating more customers for Time Inc,and the Economist, these claims are dubious. There are 300,000 applications on the store, 50,000+ iPad only, or universal.
People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers. There reason to get onto tablets is probably not to gain any new net subscribers, but not to lose subscribers to competitors. You either read this stuff or you dont. Thats why they are offering the service to existing subscribers, there is no gain in profit if you add functionality to an existing user base, you are just trying to keep them.
There is something else - these magazines are more important at generating opinion - particularly in the business world - than any others. Apple is nowhere near as important as it thinks it is, pixels and code does not make opinions - a few front page articles on Time, the Economist and the Financial Times about how Apple has lost the plot, with pictures of a rotten Apple; and then it will definitely have lost the game.
This is a like Oasis coming to America and telling everybody they hated it. Pissing off newspaper publishers is the stupidest idea ever.
Absolutely. That's[70% of new sales is better than no new sales] the key point that is completely sailing over the complainers heads.
This is an example of the inconvenient truth ignored by the apologists.
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Just how many new subscribers do you think Netflix will get via iOS vs. their traditional methods? Why is everyone acting like Apple is going to take a cut of all Netflix subscribers who use iOS?
If they are using the app on the iPad when it comes to renewal day, then the easiest thing is to renew in the app. Thats why Apple has forced the subscription button to be in the app in the first place - to get a cut. What this means for NetFlix is that the more of their existing customers they get onto iOS the more their total revenue across all platforms drops. If an existing customer is accessing netflix on an Android phone, and a website, the day he buys an iPad is the day the margin gained from him potentially drops to zero ( or on renewal day) and rather than creating new markets, Apple have removed profit from existing users.
Of course Netflix could try and email people before renewal day and link to the website. The thing is though, that Apple have proven that they change the reading of their own documents at will, and then re-write the text. Eventually they will make that illegal.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Where were you when Amazon demanded 70% (That's seventy!) of publishers subscription rates?
http://www.engadget.com/2009/05/07/a...aper-revenues/
Where were you when Amazon demanded 70% (That's seventy!) of publishers subscription rates?
http://www.engadget.com/2009/05/07/a...aper-revenues/
Argument du tu-que. That 70% is also outrageous but it comes with a service. Apples' 30% doesnt.
Wouldn't a magazine or newspaper publisher expect similar exposure in iOS that books receive - in return for a 30% cut? There are no "Mags" or "Newspapers" buttons in iTunes and there are no Apple created iMags or iNews Apps. Shouldn't there be?
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue.
They aren't meant to. Amazon, except in a few cases, are not content producers anyway.
So what if Amazon were once involved in shady practices, that does not mean that Apple is not screwing them, and worse, since Amazon have no business model ( on the iPad) and publishers clearly do on Amazon. Nor do ( as we have seen) Rhapsody, Spotify and so on.
And publishers clearly do on iBooks.
In fact Apple probably wants to clear it's competitors out.
Freeloading competitors.
As for the iPad generating more customers for Time Inc,and the Economist, these claims are dubious. There are 300,000 applications on the store, 50,000+ iPad only, or universal.
If Apple isn't generating customers then Apple's cut is 0%.
People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers.
And if they are current subscribers Apple's cut is 0%.
There reason to get onto tablets is probably not to gain any new net subscribers, but not to lose subscribers to competitors. You either read this stuff or you dont. Thats why they are offering the service to existing subscribers, there is no gain in profit if you add functionality to an existing user base, you are just trying to keep them.
In which case Apples cut is 0%.
This is a like Oasis coming to America and telling everybody they hated it. Pissing off newspaper publishers is the stupidest idea ever.
Given that Amazon only offered the Dallas Morning News paper 30% net with obnoxious clauses I don't think newspapers and publishers are all that pissed off at Apple. This was the state of the biz in 2009 and Amazon was pissing off newspaper publishes big time with virtually no consequences (beyond a Senate testimony or two).
Murdoch:
"We will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control our relationships with our customers. Any device maker or website which doesn?t meet these basic criteria on content will not be doing business long-term with News Corporation."
Apple has provided newspaper publishers a partial concession in terms of control of their relationship with customers...as long as it is the publisher that brings the customer in they get all the customers data. If Apple brings the customer then the customer has to agree to provide all the information.
That the Daily launched on the iPad is a strong indicator that Murdoch is at least tolerant of this compromise. The 30% sure as hell doesn't bother him.
This is an example of the inconvenient truth ignored by the apologists.
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
Given that the prior business arrangement was 70% for Amazon and 30% for the newspaper publisher then there's a hell of a lot of new profit to be gained.
2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
It's not nonsense. It does depend on how good those magazines transitions to the digital medium but these magazines will find new subs if they offer compelling digital media that they do not currently have.
To claim otherwise is nonsense.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
Given that Murdoch just launched the Daily it seems to me they're not unhappy. Plus Murdoch knows that their tablet/reader was DOA so getting 70% of the take from a working ecosystem selling millions of units is awesome.
Is Google's 90% better? Sure. I'm sure the major publishers are trying to negotiate sweetheart deals with Apple. The Daily probably isn't paying 30%. Which is why all the silence on the matter.
The only people screaming are the resellers without actual content of their own and no value added to Apple in a relationship.
The people rationalizing theinconvenient truths are defending Apple . The inconvenient truth is that Amazon will have no margins left after Apple's 30% steal of revenue. The fact that Amazon has been "screwing" publishers is not an argument - or rather it is an argument du tuque, or "whataboutary". It says nothing about the original argument ( which you cant argue) but turns the attack back on another company.
I am not trying to switch the argument to attacking Amazon. I mentioned their original Kindle revenue split as an example of real "screwing".
Amazon has subsequently reversed the rate to 70/30 in favour of the publishers. However that appears to be after "service" costs have been deducted. Basically a cost per MB for the free download aspect of the Kindle. That brings the publishers share to closer to 60%.
Right now, on Amazon's web site, I count over 180 publications available through subscriptions. If those guys are happy with earning 60% of the fees from (potentially) millions of Kindle customers.... what is the problem with earning 70% from (potentially) tens of millions of iOS customers?
Is Google's 90% better? Sure. I'm sure the major publishers are trying to negotiate sweetheart deals with Apple. The Daily probably isn't paying 30%. Which is why all the silence on the matter.
Murdoch confirmed the 30% revenue share for the first year in an interview:
Cavuto: Now, is it taking a third here?
Murdoch: At least the first year, yes. We’ll be getting $0.70.
He also stated that he hopes that News Corps' share increases after the first year.
http://paidcontent.org/article/419-m...he-daily-take/
Maybe Apple should hold off on occasion to see what Google is going to do. Google can't wait forever so they're going to have to lay down their cards at some point if Apple holds its hand tight.
Don't bother. I think you said it well enough above. Clearly 30% is a big commission to swallow. There are clearly positives and negatives to be ironed out here but Apple has drawn the line and we'll see if someone blinks.
A company, whether dealing solely in bits like Netflix's streaming or with legacy media like magazine/newspapers, needs subscribers but handing over 30% may be a non-starter simply if you look at the margins. They can't lose money on each customer and expect to make it up in bulk.
But this clearly changes the whole equation. There are savings from having Apple (and the internet) participate in distribution but the big question is whether you're going to realize enough savings to justify handing over 30%. Any company would prefer less of course but there's a big negotiation going on right now. It's fun to watch from the sidelines as we ALL can watch it as it plays out.
Competition is healthy. The fact that apple acts worse than Microsoft did in the 90s is worrying to say the least. Apple can't be in control over everything and needs to realise this. It's only a matter of time before Apple runs into trouble with the law, and that governments will be forced to step in to give real freedom of choice to customers across the world, just as had to happen with Microsoft.
Sure the Apple app store and the iphone had a smaller install base back on their respective releases, but eventually there comes a time when a company who has overwhelming product saturation in the market gets too big for its own good, and chooses to bully and force everyone into meeting their demands. It's Apple's way or the highway, and that is in no way healthy for anyone.
However because the apple market is something developers can't ignore, they are forced to comply and give in to apple's demands. And this defines the danger of a monopoly.
I cannot understand the apple fanboys on this forum rooting for apple no matter what fiendish schemes they come up with and force upon the community and developers. It's worrying. Even more so the bash-everything-but-Apple stance the articles on this site publishes is outrageous - its like Apple Insider will bash any and every Apple competitor that comes up with better ideas than it, heaven forbid. You can have a site focused and favourable towards Apple, without making trash articles about how crap the competition is, when clearly the competition is real. Very real. And very very powerful. It seems this bashing has gotten worse as the competitors have gotten stronger. Android is ripping away Apple's customers and Apple is doing nothing to help itself by digging its heels in deeper with their outrageous policies.
A monopoly is not good for customers. Choice is good for customers. The mobile market has some insane followers. It's far worse than the game console scene.
No one platform beats the others. iOS and Android (and the other platforms) provide a choice to customers, all which come with good and bad features. Choice is good. If you have a huge monopoly, innovation will be slow, boring and wont offer anything new, and they could charge whatever they want.
Frankly, Apple has become greedy. And what better way to put them in their place than Google.
After all, Google can work without Apple, but Apple can't work without Google.
People who download the Economist and Time are already aware of these brands - they had to search for the brands on the iPad. They are probably regular subscribers to the print editions, or occasional readers.
Then if your suppositions are correct, we are back to this being yet another tempest in a teapot since "regular subscribers" wouldn't be subscribing through an in-app purchase and therefore would not be subject to the 30%.
Thanks for re-enforcing the central point that this isn't a big deal and that no one will be jumping ship
1) There is no 70% of profit gained from new sales. The 30% comes from revenue, so profit does not get reduced by 30% but by 100% for all magins less than 43%. This fact has been explained exhaustively.
The idea that subscriptions account for a significant portion of revenue/profit is ridiculous and just further demonstrates how little you truly understand of the back end of publishing.
Earlier in this thread someone pointed out why there is a significant discount for subscribing through the publisher vs. paying the news stand price. Scroll back, find it, and become educated.
2) The idea that people are discovering the Economist, Time, or The Financial TImes for the first time on the iPad, and thus generating a new market is also nonsense.
If it's nonsense then so is the fuss about the 30% cut since if people don't subscribe via the in-app purchase there is no cut.
In any case were the arguments of the apologists true the publishers would be happy. Since they are not happy, and since they know their business model, I think we can assume they are being screwed as they indicate.
The only thing we can assume is there will be posturing and positioning by those who wish to get a better deal.
Making any kind of assumption without being at least minimally informed leads to - well, your malformed opinions that have little basis in reality but make for good forum posting.
If they are using the app on the iPad when it comes to renewal day, then the easiest thing is to renew in the app.
Wait, I thought you said that the iOS was a minority use and marginal in value. If so, odds are they won't be in an iOS device on "renewal day"
Thats why Apple has forced the subscription button to be in the app in the first place - to get a cut.
If the user isn't in the iOS app on "renewal day", then Apple won't be present to "get a cut".
However, if the user is present and the renewal via the iOS app is the easiest and most expedient for the user, then that convenience should be worth something - hence Apple wanting their "cut".
At the end of the day iOS has value or it doesn't. If it doesn't, the whole argument about the Apple "cut" is moot since they won't have the opportunity to get it in the first place. However, if being in the iOS universe does have value, why shouldn't Apple get their "cut"?
What this means for NetFlix is that the more of their existing customers they get onto iOS the more their total revenue across all platforms drops.
Only if people start shifing to subscribing through the iOS app. I'm an existing Netflix subscriber and I auto-renew via credit card on their web site - like 100% of their current subscribers. What exactly is the risk of me switching from renewing via the web to the Netflix iOS app? (let me spell it out for you - ZERO!)
If an existing customer is accessing netflix on an Android phone, and a website, the day he buys an iPad is the day the margin gained from him potentially drops to zero ( or on renewal day) and rather than creating new markets, Apple have removed profit from existing users.
Huh? By simply accessing Netflix from an iOS device Netflix margin drops?
This right here proves that you have no flipping clue about what you are talking about. None what so ever.
Of course Netflix could try and email people before renewal day and link to the website.
Huh? Why would they have to do this? You move from simply uniformed to incoherent.
The thing is though, that Apple have proven that they change the reading of their own documents at will, and then re-write the text. Eventually they will make that illegal.
Whoops, looks like I judged you incoherent a little too soon. The terms were in Apple's T&C's all along - they weren't strictly enforced since Apple didn't have a fully developed solution. Now they do.
Damn Apple for hiding their true intentions in plain sight all along!
The fact that apple acts worse than Microsoft did in the 90s is worrying to say the least.
What a bunch of crap. When Apple starts modifying it's OS's so applications from direct competitors won't run and starts "investing" in new market areas by selling products at a loss to freeze competitors out then you can compare Apple to MS.
They don't do that, never have and your attack is the hight of BS.
Apple can't be in control over everything
Well it will be a relief then for you to know that Apple doesn't want to control "everything", just the user experience for those that use their products.
It's only a matter of time before Apple runs into trouble with the law
Really? Care to cite this "law" that Apple will be running into trouble with?
governments will be forced to step in to give real freedom of choice to customers across the world
Yup, because governments have through the history of humanity been so good at "giving" freedom.
What another load of revisionist crap. Sigh. Those who fail to understand history....
Sure the Apple app store and the iphone had a smaller install base back on their respective releases, but eventually there comes a time when a company who has overwhelming product saturation in the market gets too big for its own good
Well, it's a good thing Android growth is outpacing iOS growth and we won't have to worry about that happening. No need for government regulation then either.
chooses to bully and force everyone into meeting their demands.
Neat trick for a company with minority market share now, isn't it?
It's Apple's way or the highway, and that is in no way healthy for anyone.
Funny, did someone from Apple force you to conform to the "Apple way" at gunpoint or something?
What's unhealthy is for intolerant people who think that every company should conform to their narrow world view. I like the choice and model that Apple provides via the iOS ecosystem.
if you don't, choose Android or something else. But stop trying to restrict my choice in ecosystems by dictating what Apple does either through advocating government regulation or other such nonsense.
Ironic, isn't it, that the only one actually advocating the forcing of anything is you?
However because the apple market is something developers can't ignore, they are forced to comply and give in to apple's demands.
Developers can ignore the iOS ecosystem if they want to, but they would be crazy to since it's wildly profitable.
And this defines the danger of a monopoly.
And this defines the use of "You keep using that word. I do not think it means what you think it means"
I cannot understand the apple fanboys on this forum rooting for apple no matter what fiendish schemes they come up with and force upon the community and developers.
Aha! We come to the root of the issue!
It's worrying.
I can imagine. Damn those upstarts at Apple - actually focusing on the end users and not the developers!
Except by forcing developers to focus on the end users they have made them tons of money.
Those bastards!
Even more so the bash-everything-but-Apple stance the articles on this site publishes is outrageous - its like Apple Insider will bash any and every Apple competitor that comes up with better ideas than it, heaven forbid.
1) It's an unabashed Apple fan site. Duh.
2) When someone comes up with something better and Apple stops syphoning off 90% of the profit with less than 20% of the market share you might have a point. Otherwise your just whining.
You can have a site focused and favourable towards Apple, without making trash articles about how crap the competition is
You could, but it would be boring. Like Engadget.
when clearly the competition is real.
Talk is cheap - prove it.
Very real.
didn't get the memo, eh?
And very very powerful.
Again, talk is cheap. How many "iPad Killers" are shipping? How many will ship before the next generation iPad is released and once again probably sets the bar even higher?
Is that your definition of powerful competition? What again exactly is Apple supposed to be worried about?
It seems this bashing has gotten worse as the competitors have gotten stronger.
Replace "stronger" with "more desperate" and you might be on to something...
Android is ripping away Apple's customers
Apple is selling every device as fast as they can make them. Android is doing nothing to Apple's customers - Apple's customers are having no problem finding and seeking out Apple's products.
Android is gaining market share because it's given away. Many people have Android just because it was there by default. Not because they sought it out.
Every iOS user has it because they sought it out.
That's a substantial and significant difference.
And why Apple owns the majority of profit with a minority share.
and Apple is doing nothing to help itself by digging its heels in deeper with their outrageous policies.
Outrageous policies like putting the customer first? I think they need to keep digging away!
A monopoly is not good for customers.
Which is why it's a good thing we don't have one.
Choice is good for customers.
I agree. Go develop for Android if you choose.
The mobile market has some insane followers.
Agreed. So stop trying to limit my choice already and go elsewhere if Apple rubs you the wrong way so bad.
It's far worse than the game console scene.
Doubtful. Their holy wars make this look like patty cake.
No one platform beats the others.
Um, that's where you would be wrong - iOS is beating the tar out of everyone else in the one metric that matters most to people. Well, people who enjoy putting food on the table and having nice things - and that's profit!
iOS and Android (and the other platforms) provide a choice to customers, all which come with good and bad features. Choice is good.
I'm glad you acknowledge we have choice!
If you have a huge monopoly, innovation will be slow, boring and wont offer anything new, and they could charge whatever they want.
So if we have so much choice and Apple is doing so many wrong things and loosing so many customers, why are you so concerned about this so-called "monopoly"?
Frankly, Apple has become greedy. And what better way to put them in their place than Google.
HAHAHAHA - this statement is so rich in irony on multiple levels that any further commentary I could provide would simply diminish the pure irrationality of it...
After all, Google can work without Apple, but Apple can't work without Google.
Yeah, whatever. Which company is a one trick pony when it comes to revenue streams and which one is diversified with at least five or six separate revenue streams?
Which one has a bigger market cap?
Who needs whom again?
Are you sure you really want to rant about Apple fanboi's?