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Old Feb 22, 2011, 01:14 AM   #1
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Steve Jobs Email Suggests In-App Subscriptions Don't Apply to 'Software As a Service'



Apple's announcement last week introducing App Store Subscriptions has generated a lot of controversy across the web. At issue is Apple's policy requiring publishers to also offer all subscriptions through Apple's In-App purchase system which gives Apple a 30% cut. Meanwhile, publishers are still allowed to sell subscriptions outside of the App Store (and keep 100%) but they can't undercut the App Store price. From the original announcement:
Quote:
"Our philosophy is simple - when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," said Steve Jobs, Apple's CEO. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app.
While the wording of the original announcement was aimed specifically at content publishers, there has been growing concern that the terms don't allow for "software as a service" (SaaS) apps as well. These are apps such as DropBox and SalesForce that provide specific services to users for recurring subscription fee.




Readability for iPad
The issue was brought to the headlines yesterday morning when Readability announced that their app had been rejected due to the new subscription terms. Readability offers a subscription service priced at $5 per month which offers the users to view clutter- and ad-free versions of online content for easy reading. They believe they were rejected due to Apple targeting software service apps and not just ones serving up content.

DaringFireball's John Gruber, however, interprets this rejection differently, and believes that Readability is simply a publisher model, and thus subject to Apple's new terms:
Quote:
Maybe I’m missing something, but these guys claiming to be surprised and disappointed by Apple’s insistence on a 30 percent cut of subscriptions when their own business model is to take a 30 percent cut of subscriptions strikes me as rich. And how can they claim that Readability isn’t “serving up content”? That’s exactly what Readability does.
But Readability is not alone in their interpretation. TinyGrab, a screenshot sharing service, announced today that they won't be pursuing their iOS app due to the restrictions surrounding the new subscription system. TinyGrab offers premium subscriptions which gives paying customers additional storage and capabilities.
Quote:
We really want to be part of the app revolution on OS X and iOS but it looks as though that may no longer be able to happen, until Apple fix these issues and welcome us in again.
Finally, Marco Arment, the developer of Instapaper, also seems to interpret Apple's new policies as affecting software as a service. He asks if apps that support Evernote, DropBox, Salesforce, LinkedIn, and 37signals will have to be removed for not offering subscriptions as in app purchases.




SalesForce, Evernote, Dropbox icons
One MacRumors reader also had these questions and emailed Apple CEO Steve Jobs with these same concerns. He wrote:
Quote:
Hello Steve,

As a full time iOS developer, I am concerned (and confused) withe the new App Store guideline regarding "Apps offering subscriptions" (section 11.12).

Most of the iOS apps I have developed, as a contractor for other businesses, have been free apps that had login screens to allow the user access to some amount of private data. and/or service. These businesses have all been well established companies that sell some kind of service to their customers (Software As a Service companies) and the iOS app was merely another "portal" for their users to access their data/services (in many times, in a limited i.e. "mobile" fashion).... for example; SalesForce. I am concerned that most of these businesses will choose to not develop an iOS app for their customers if the IAP & subscription policy was in place.

Would these type's of free apps be still be allowed in the App Store or will they now be expected to use IAP?
To this, Steve Jobs replied in his typically short and, unfortunately, somewhat vague response:
Quote:

We created subscriptions for publishing apps, not SaaS apps.

Sent from my iPhone
On the surface, our interpretation of this response is that the new in-app subscription rules simply don't apply to Software-as-a-Service. And, if you review the new guidelines and press materials that Apple has released, all the context is specifically related to publishers of content, and there are no references to software services.

Based on that interpretation, apps such as DropBox and even TinyGrab may not be subject to the new rules. Readability's rejection, however, shows there are some borderline cases where the line between publisher and service provider is a bit blurry. Hopefully, Apple will provide more clarity on this issue.

Article Link: Steve Jobs Email Suggests In-App Subscriptions Don't Apply to 'Software As a Service'?
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Old Feb 22, 2011, 01:17 AM   #2
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Old Feb 22, 2011, 01:20 AM   #3
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it would really be nice if Apple had a more open way of sorting out these ambiguities.
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Old Feb 22, 2011, 01:22 AM   #4
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The truth is revealed. It's the new alliance, Elvis + Jobs = an Apple that never dies.
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Old Feb 22, 2011, 01:25 AM   #5
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I sure hope that's the case. The SaaS issue has the potentially to kill the App Store.
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Old Feb 22, 2011, 01:25 AM   #6
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Well said. Thing is, Apple have spent more than a year since before introducing the iPad to get publishers on board with their device. It doesn't make sense that Apple would want to jeopardise these relationships so soon just for a little extra pocket money.
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Old Feb 22, 2011, 01:26 AM   #7
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Quote:
Originally Posted by neutrino23 View Post
it would really be nice if Apple had a more open way of sorting out these ambiguities.
I think they are pretty open, the problem is that even if you write it out in legalese it is still open to interpretation. I am not saying Apple shouldn't be more exact, but the better way to handle this is to react to changes as they happen. Apple can very easily re-address the issue as needed and that is exactly what they are probably going to do. This whole thing is very complex and honestly Apple's legal team is smarter to be vague with this stuff until there is reason to get more precise. It's a business after all.
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Old Feb 22, 2011, 01:27 AM   #8
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Understandable

Apple is in the right here.

When you own a business almost nothing is black and white once you get to the details. There will always be exceptions and you have to evaluate everything on a case by case basis. It's Apple's store and I think Apple charging 30% isn't any worse than Brick and mortar stores of old charging publishers for selling their software/publications.
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Old Feb 22, 2011, 01:37 AM   #9
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The Rules are clear. If u can subscribe to something in the app, it must be possible to use apples system. It's not only about apple making money with that. It's about being much easier to use one account for everything instead of having to register for every little app, enter captchas, set up your payment, answer a confirmation mail etc. This is stone age and has to end and thus, I highly welcome the new rules and of developers don't like the new, better system because they prefer a more complicated and annoying way for their users, they are free ro go to the android market only.

On iOS, I want transparency and ease of use.

Last edited by Somian; Feb 22, 2011 at 01:39 AM.
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Old Feb 22, 2011, 01:37 AM   #10
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You know what would be freaky? Hopefully many many years from now when Steve passes on, emails to Steve Jobs are still replied to in such a short direct manner.
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Old Feb 22, 2011, 01:42 AM   #11
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Quote:
Originally Posted by Somian View Post
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8C148a Safari/6533.18.5)

The Rules are clear. If u can subscribe to something in the app, it must be possible to use apples system. It's not only about apple making money with that. It's about being much easier to use one account for everything instead of having to register for every little app, enter captchas, set up your payment, answer a confirmation mail etc. This is stone age and has to end and thus, I highly welcome the new rules and of developers don't like the new, better system because they prefer a more complicated and annoying way for their users, they are free ro go to the android market only.

On iOS, I want transparency and ease of use.
I don't think it's as clear as you state.

Take these examples: DropBox, SalesForce

Do they need to offer their subscriptions as in app purchases?

If you believe that Readability was rejected as a service, then yes, they do. If you believe that Readability was rejected as a content publisher, then possibly no.

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Old Feb 22, 2011, 01:47 AM   #12
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So where do you draw the line, what exactly is saas?
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Old Feb 22, 2011, 01:50 AM   #13
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We created subscriptions for publishing apps, not SaaS apps.
But what if Apple starts offering subscriptions for software services, will they change the rules yet again?

Is a dumb reader app without buy-buttons (but with a log-inn) still allowed or is this considered a duplication of a iOS function because the same can be achieved with a simple website?

To many questions, Apple needs to make its rules clearer and not change them every month.
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Old Feb 22, 2011, 01:55 AM   #14
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Old Feb 22, 2011, 01:58 AM   #15
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This still doesn't shed any light onto the potential issues with the Kindle app. It's not exactly a subscription app or SaaS but theres still the potential issue with it not offering in app purchases. It seems impractical for it to ever support in app purchases of every single Kindle book that amazon offers. I don't know if getting around Apples requirements simply means removing the "shop for Kindle books) button or not. This is what I really want to know more about.
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Old Feb 22, 2011, 02:02 AM   #16
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Email fake?

This Steve email strikes me as a fake. It just doesn't seem likely Steve would use "SaaS" in a sentence, particularly with that capitalization, and on an iPhone to boot (that tries to correct "saas" to "aaas") He's not a man who spends a lot of time writing with proper caps in his past emails...why now, with a vaguely obscure term? Who checked the validity of the email?
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Old Feb 22, 2011, 02:05 AM   #17
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Interpretation

I read the press release and came to a couple conclusions.

1) it is aimed at publishers of content that charge for subscriptions. So if you're the publisher of X magazine and offer online subscription to content then your app MUST offer in-app subscriptions. Readers that offer a portal for paid subscribers access to X magazine's content online will be banned unless they offer in-app subscriptions through the App Store.

2) it says for existing customers the publisher keeps 100% yet if any sort of payment processing goes through apple 30% is Apple's. Mutually exclusive terms IMO. My current subscriber so liked the app we did for iPad that he used it to renew his subscription, 30% gone.


There is ground for an anti-trust suit here. Some publisher should release an app that ONLY accesses paid subscriber content and see if Apple rejects it. If it does I think DoJ got a winnable case.

Last edited by macaroo2; Feb 22, 2011 at 02:14 AM. Reason: Added examples
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Old Feb 22, 2011, 02:08 AM   #18
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Originally Posted by dcranston View Post
This Steve email strikes me as a fake. It just doesn't seem likely Steve would use "SaaS" in a sentence, particularly with that capitalization, and on an iPhone to boot (that tries to correct "saas" to "aaas") He's not a man who spends a lot of time writing with proper caps in his past emails...why now, with a vaguely obscure term? Who checked the validity of the email?
Are you really questioning the authenticity of the email based on prior behavior? Your analysis strikes me as...strange. Is there a large enough sample size of emails to actually identify Steve's habits? I mean, I just tried writing out "Saas" right now, and it tried to autocorrect to "Saastamoinen" (the last name of one of my contacts in Finland) and then "Saad" (which is not a dictionary term). If Steve is used to writing out this term, then it may not try to autocorrect to "aaas".
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Old Feb 22, 2011, 02:14 AM   #19
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Arn, I appreciate the comprehensiveness of this post. Nice assessment.
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Old Feb 22, 2011, 02:34 AM   #20
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lol sounds like some app devs are just trying to get away from apples 30% unrightfully so apple stopped it. I doubt those really small companies that complain that they can't steal that 30% back will really effect apple at all. Those companies need apple, not the other way around.
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Old Feb 22, 2011, 02:34 AM   #21
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Old Feb 22, 2011, 02:35 AM   #22
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Originally Posted by 01Shambrook View Post

Well said. Thing is, Apple have spent more than a year since before introducing the iPad to get publishers on board with their device. It doesn't make sense that Apple would want to jeopardise these relationships so soon just for a little extra pocket money.
See, that's what I can't understand either. But then again, there is another side to this case. It seems pretty reasonable that Apple should get some sort of compensation if they "produce" another customer for a publisher. (Perhaps even a customer that would otherwise never have subscribed).

I'm thinking.. Perhaps where Apple distinguishes between services, is whether can be put into the category of "Freemium". I don't know Salesforce, but on both Evernote and Dropbox the subscription is not the NEEDED to use the product, which is where I think they differ from the publishing apps.
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Old Feb 22, 2011, 02:35 AM   #23
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Originally Posted by michaelcyee View Post
Are you really questioning the authenticity of the email based on prior behavior? Your analysis strikes me as...strange. Is there a large enough sample size of emails to actually identify Steve's habits?
Look, I'm not trying to do a scientific study here. It just seems that it behooves us to prove authenticity before blindly assuming every claimed email is valid. There have been plenty of faked SJ emails in the past, and this article provides no particular offer of what makes us sure this is real.

There's plenty of SJ emails (faked and not) here : http://www.emailsfromstevejobs.com but of course there's no way to identify Steve's habits with certainty. I'm just wary of these emails because of how many have been faked. It seems like one always seems to surface at every minor internet controversy flare-up, and not always because of Steve... is it uncalled for to question this?
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Old Feb 22, 2011, 02:41 AM   #24
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I feel torn between 2 sides that are trying to have the best of both worlds. I'm not a fan of subscriptions as they're doing it, but I also hate in-app purchases. They've become a way to fleece people and have the same sort of advantage taking of stupid consumers as late night infomercials. How is 'Smurf's Village' the top grossing app in Canada?

I get that app developers are going to do whatever they can to make as much money as they can, but even Apple is trying to get into the game of taking every last penny out of people. I guess I'll continue my 'consumer speaks' point of view and refuse to pay for a subscription or in-app purchase.

This is an argument between the devil and Hades.
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Old Feb 22, 2011, 03:01 AM   #25
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As long as we all agree that Apple gets an absurd amount of money just for letting devs do their thing on IOS ............We can all be...............???????????/


Happy ????
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