Apple Allegedly Buys Ads for Subscription-Based Apps to Collect More Commission [Updated]

[hans1972]

And you don't see how running ads without the developer's consent or knowledge is sketchy?

The developers have given Apple consent through a contract.

 

[JGIGS]

The analogy doesn't seem fair if there's 1 product.

I mean, do you think Target, Amaon, Walmart, Costco, etc. all pay the same for the products they sell? Is that fair? The profit margins are all different. I can buy a Bose speaker on Amazon or at Target or on Bose.com. Why doesn't Bose forbid outside sales? Because they want their products to be available and in the hands of customers, even if they take home a little less. They see the value in the other marketplaces. The Apple App Store provides a service to find, use and monitor subscriptions and app sales.

Does Target put out ads for Walmart or Amazon that direct them to the Target website or Target store instead? With Amazon and Walmart not wanting them to?

That's the difference.

 

[hans1972]

Walmart advertises itself. There's no confusion about who the ad is coming from even though they may be advertising that they stock Colgate products. In fact, even in situations like this, if you're doing anything other than listing a product in a catalogue, you generally need the brand to sign off on the messaging.

That's not at all what's happening here.

The developer as agreed to Apple marketing their apps. It clearly says apple.com in the headline of the ad.
It's normal business practise to attract customers to your store and not the store of the manufacturer.

 

[hans1972]

Don't know about is offered in the USA but here you should get sued for advertising a really awful app like HBO.

The app, the content is another story.

It would be unconstitutional in the US since if it could be considered "cruel and unusual punishment" to use the app.

 

[visualseed]

Yes, but Walmart doesn’t take an extra 30% for the ad. And clearly there’s a functional difference between a markup and a cut. Once Walmart pays Crest for the product, they could care less what price Walmart sells it for. If Walmart could get away with a 200% mark up, then bully for them. If they can only get 5% we’ll, that sucks but not Crest’s problem. Imagine if Walmart ran an ad for Crest and then told Crest that they’d be paying 30% less for the next shipment because their ad got them more sales. Crest probably wouldn’t be sending anymore product or would be taking Apple to court.

P&G actually pays Walmart to advertise their products (including Crest) so every week there is a Crest ad from Walmart P&G makes less money per sale. Also Walmart doesn't pay P&G for their products before they are sold. They settle up afterwards and P&G takes all the risk of returns, spoilage, shrinkage, etc. Walmart pays a lower wholesale cost for the items they sell than the other retailers in their space so P&G makes less money on Walmart sales than Wallgreens sales, etc. regardless of the retail price.

To further put holes in your argument, if it was such a bad thing for Apple to take a 30% cut of subscription revenue from these developers, why do any of them allow in-app subscriptions to begin with? Obviously, these companies weighed the pros and cons and decided it was acceptable to acquire customers directly through the app (AppStore).

If P&G were like Spotify or Netflix they would ask Walmart to place their toothpaste on their store shelf but only allow customers to buy it with a manufacturer's coupon that they had to acquire from the company though an outside channel depriving Walmart of any revenue on the sale and any incentive to promote the product.

 

[boss.king]

The developer as agreed to Apple marketing their apps. It clearly says apple.com in the headline of the ad.
It's normal business practise to attract customers to your store and not the store of the manufacturer.

Agreed to marketing them within the App Store or anywhere? Not trying to be difficult, I’m genuinely curious.

 

[hans1972]

The hardest bridge some of the most faithful fans will have to cross is removing themselves from prejudice and admitting to their conscience that Apple is not in fact wholly possessed of the qualities they feverishly convinced themselves was a congenital and incontrovertible truth.

I believe Apple treats developers as second-class citizens and this is just is more evidence for this.

And I approve, since I do think developers should be treated as second-class citizens in the Apple ecosystem.

 

[visualseed]

Does Target put out ads for Walmart or Amazon that direct them to the Target website or Target store instead? With Amazon and Walmart not wanting them to?

That's the difference.

Apple is not advertising for other app stores. They are advertising for a product (app) that is in their own app sore.

 

[Analog Kid]

if you're not going to allow them to sideload then I think any fees to be in the appstore should just cover the apples cost tbh.

So, back to charity again?

The argument at the end of the day is if you own the property you should be able to dictate how and who publishes advertisements for it. I'm sure the developers wouldn't mind Apple paying for ads but in an agreed upon way which they should have the right to.

Apple owns the AppStore, which provides subscription services on behalf their clients, and they are advertising those services. When a developer signs an agreement saying Apple can promote their products, I would consider that "agreed upon".

I believe as long as your app doesn't break any appstore terms, your app has as much right as any other to be on the app store.

Agreed.

 

[miamialley]

Does Target put out ads for Walmart or Amazon that direct them to the Target website or Target store instead? With Amazon and Walmart not wanting them to?

That's the difference.

So, you sell your product in Target. Target advertises your product on its website or on TV. If you have a problem with that, then why would you sell your product at Target? If you stop selling your product at Target, then they won't advertise for your product.

I do think developers should be able to offer different prices if you pay through their marketplace. Maybe that is where we can come full circle and agree that would resolve the issue altogether? Apple should not be able to dictate pricing structure or offerings at my developer web site vs the App Store. Right?

 

[hans1972]

B) Apple is buying ads for companies that don't wan't Apple to advertise for signing up for subscriptions through the Apple installed apps vs them signing up on the developers webpage. This is despicable behavior. No way another company should be able to place ads for another if that company doesn't want them to.

Then these developers shouldn't appoint Apple to be their marketeer.

 

[hans1972]

The thing that rubs me the wrong way there is that Apple has argued in the past that forcing users to sign up outside of the app is a worse experience, and I tend to agree. But now they are essentially playing chicken with developers' income. Either lose revenue to Apple or make your app worse for your (and ultimately Apple's) customers.

But why are you concerned about a developer like HBO?

User's which are the ones who matter, usually don't loose anything by signing up through the App Store.

 

[hans1972]

How do you get to that conclusion? If they leave the ability to buy through the App Store, there will always be a certain number of users who pick that option and no amount of advertising will change their mind, or who find apps without seeing ads at all.

This isn't about asking Apple to run a charity, just to stop competing with devs who are already doing well and already bringing in money to Apple. Besides, there are plenty of other apps out there that could use an ad boost and could also bring in more money, and the devs would also benefit from.

Again, we shouldn't care about developers profit. Only what benefits us as users.

 

[JGIGS]

Apple is not advertising for other app stores. They are advertising for a product (app) that is in their own app sore.

Doesn't matter Apple is still competing indirectly with the the developer for the revenue and they know it. The developer should have every right to ask Apple to stop placing ads that direct the consumer to the app store. The subscription itself has nothing to do with Apple or the app store other then consumers have the ability to purchase it through the app.

Developers don't even have the option of ads that direct consumers to obtain an app directly from them or another appstore for ios product users. That's clearly anti competitive. Apple holds a monopoly on in app purchases and subscriptions in ios. If you don't find that unfair then there isn't much more I can say.

 

[boss.king]

But why are you concerned about a developer like HBO?

User's which are the ones who matter, usually don't loose anything by signing up through the App Store.

Again, we shouldn't care about developers profit. Only what benefits us as users.

I'm not concerned about HBO, but I am concerned about other devs.

How about you decide what you care about and I'll worry about the things I care about, deal?

 

[JGIGS]

Apple owns the AppStore, which provides subscription services on behalf their clients, and they are advertising those services. When a developer signs an agreement saying Apple can promote their products, I would consider that "agreed upon".

Promoting in the App store sure that's fine but still should be agreed to by the developer. If the developer says stop Apple should stop. That's my opinion its the developers intellectual property not Apples. They should decide on how it's promoted. The ads that pop up in normal web searches that's the bigger issue.

 

[miamialley]

Doesn't matter Apple is still competing indirectly with the the developer for the revenue and they know it. The developer should have every right to ask Apple to stop placing ads that direct the consumer to the app store. The subscription itself has nothing to do with Apple or the app store other then consumers have the ability to purchase it through the app.

Developers don't even have the option of ads that direct consumers to obtain an app directly from them or another appstore for ios product users. That's clearly anti competitive. Apple holds a monopoly on in app purchases and subscriptions in ios. If you don't find that unfair then there isn't much more I can say.

I will agree you on that point. If the developer wants Apple to NOT advertise their app, they should have that right.

So, maybe we're on the same side now.

 

[hans1972]

Is it? You have all the developers contracts in front of you? Even if it is I believe if parts of contracts are written in bad faith they can be rendered void but not 100% positive. Either way it's dirty to run ads for someone who doesn't want you to advertise for them.

The contract these developers have with Apple:

"You hereby appoint Apple and Apple Subsidiaries (collectively “Apple”) as: (i) Your agent for the marketing and delivery of the Licensed Applications to end-users [...] and (ii) Your commissionaire for the marketing and delivery of the Licensed Applications to end-users [...] You hereby acknowledge that Apple will market and make the Licensed Applications available for download by end-users, through one or more App Stores or the Custom App Distribution Site, for You and on Your behalf"

It seems some of these developers don't read the agreements they agree to. Complaining about Apple marketing their application when that's the job they assigned Apple to do.

 

[JGIGS]

So, you sell your product in Target. Target advertises your product on its website or on TV. If you have a problem with that, then why would you sell your product at Target? If you stop selling your product at Target, then they won't advertise for your product.

I do think developers should be able to offer different prices if you pay through their marketplace. Maybe that is where we can come full circle and agree that would resolve the issue altogether? Apple should not be able to dictate pricing structure or offerings at my developer web site vs the App Store. Right?

You just argued the whole anti trust issue with apple. If Apple owns 50% of the devices that people will use the subscriptions on as a developer you HAVE to have an ios app. For that you HAVE to agree to Apples 15-30% commission fees because apple only allows people to add apps through their app store.

Are you starting to understand why this and sideloading and in app purchase have been such a big deal the last year or so?

And yes if a retailer breaks MAP (minimum advertised price) agreements the manufacturer can force them to no longer carry the product anymore which I'm sure Apple has on several occasions on their own products.

 

[hans1972]

Or, extrapolating from your logic, you could argue that Apple should charge for iOS updates, because why would it do all that work for a complicated product that customers can just download for free? Of course, this ignores the fact that both iOS and the App Store help make iPhones and iPads successful, and Apple gets paid back from the exclusive manufacture of those devices.

You do pay for upgraded. It's baked into the price of the iPhone. Part of the price is set aside for services like Maps and upgrades to iOS.

 

[miamialley]

You just argued the whole anti trust issue with apple. If Apple owns 50% of the devices that people will use the subscriptions on as a developer you HAVE to have an ios app. For that you HAVE to agree to Apples 15-30% commission fees because apple only allows people to add apps through their app store.

Are you starting to understand why this and sideloading and in app purchase have been such a big deal the last year or so?

And yes if a retailer breaks MAP (minimum advertised price) agreements the manufacturer can force them to no longer carry the product anymore which I'm sure Apple has on several occasions on their own products.

But I think the answer to all this we all (?) can agree on is developers should be allowed to sell access to their app off the App Store and for different pricing. Nobody would disagree with this but Apple.

 

[PinkyMacGodess]

Walmart makes an average markup of 24%. Target makes 32%.

And Walmart pushes their employees on to social programs, and Target gives back to their communities. *shrug*

 

[PinkyMacGodess]

Sounds like you are talking a taxation issue not a stock buy back issue. Everyone who owns the shares get the same change in the price. Again nobody is forcing minority share holders to sell their shares. Companies aren't making money on the buy back. They are regaining equity that they lost when they issued shares which companies release because they need the money for expansion etc. Sorry I see nothing wrong with that unless they unethically drove down the stock price before doing so. It's also very much legal sooo...

3 Reasons Companies Choose Stock Buybacks

Companies can repurchase their stock for ownership consolidation, investor sentiment, and stock valuation.

www.investopedia.com

It's all part of the same stinking heap of...

 

[Analog Kid]

Promoting in the App store sure that's fine but still should be agreed to by the developer. If the developer says stop Apple should stop. That's my opinion its the developers intellectual property not Apples. They should decide on how it's promoted. The ads that pop up in normal web searches that's the bigger issue.

It’s agreed to by the developer:

Apple is granted conventional legal rights to advertise in this way in the agreements it has with developers.

 

[JGIGS]

But I think the answer to all this we all (?) can agree on is developers should be allowed to sell access to their app off the App Store and for different pricing. Nobody would disagree with this but Apple.

That and they should be granted final approval on how their apps are promoted IMO.