Apple Approves Netflix and Kindle Updates Despite New In-App Purchase Rules

[MacRumors]

TechCrunch points out that Apple today approved updates to two major iOS applications that some had feared would be affected by the new in-app purchasing rules that Apple announced in February. The new rules required that any subscription based services must also provide the same service via the in-app purchase mechanism which is subject to Apple's 30% cut.

Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Then with one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription. Apple processes all payments, keeping the same 30 percent share that it does today for other In-App Purchases.

Around the same time, Apple stated that eBook applications would also be required to offer in-app purchases for their content. Apple even rejected Sony's Reader from the App Store for this very reason.

Both of these restrictions generated concern about the future of popular apps such as Netflix and Kindle, which would be affected by a strict interpretation of the rules. Apple, however, has approved updates for both apps that went live today. It's not clear if Apple's rules have changed or if Netflix and Kindle are being given any special treatment. Apple has made no further official clarification about the policies beyond the initial announcements.


Article Link: Apple Approves Netflix and Kindle Updates Despite New In-App Purchase Rules

 

[Ingot]

Good... good.

 

[Moyank24]

Let's hope this is a sign of good things to come regarding this policy.

 

[TechKnow]

Just don't mess with my Netflix!

 

[vincenz]

Ready, 3, 2, 1, complainers go

 

[smileyborg]

I believe Apple said developers with apps already in the App Store have until June to comply with the new rules...no news here.

 

[RawBert]

Apple knows what's best for them. A lot of their customers would be furious if they cut off Netflix and Amazon support. I love the Apple ecosystem but that's not where I obtain my media.

 

[RMo]

Wait, Kindle has page numbers now? FINALLY! I've spent two years of grad school trying to follow along with my instructors as they say to look at "the top of page X," and I struggle to find what they're talking about...

Too bad I just returned mine in favor of an iPad 2 since I didn't do a lot of reading on it, anyway, and it had so-so support for PDFs which is what most of my readings actually were--but hopefully these updates come to the Kindle desktop apps, as well (and the device itself if it hasn't already, not that I care anymore).

In related news: good to know that Apple still approved these.

 

[err404]

Why is it a surprising that these apps are not under the new policy? The new rules are supposed to take effect in June.

Sony's reader was rejected for a different reason. They had in app purchasing that was not going through Apple. Kindle redirects to a web browser to avoid this restriction.

FYI - I am not supporting Apple in this, as I feel this a too heavy handed and prevents certain business models from being viable. I just putting the facts out there.

 

[spacehog371]

Why is this surprising?

Apple has said since they first announced it that developers have until June 30th to implement the new in app subscriptions.

http://gigaom.com/apple/kindle-app-update-brings-page-numbers-but-not-in-app-purchases/

You can read it for yourself in the App Store Review Guidelines.

 

[macduke]

Aren't these rules supposed to take effect in June?

Apple will have a massive lawsuit on their hands if it doesn't pull a 180 on these rules real quick. I'm a big Apple fan, but these companies already have to pay so much in royalties that they will go out of business. That could be easily argued in court too. The main problem is that Apple requires the prices be the same inside their store as outside. That's price fixing and IMO, a big no-no.

Edit: and this story just disappeared off the front page as I posted, lol.

 

[netnothing]

Why is this surprising?

Apple has said since they first announced it that developers have until June 30th to implement the new in app subscriptions.

http://gigaom.com/apple/kindle-app-update-brings-page-numbers-but-not-in-app-purchases/

You can read it for yourself in the App Store Review Guidelines.

I believe Apple said developers with apps already in the App Store have until June to comply with the new rules...no news here.

Yeah, seriously MacRumors. This isn't even Page 2 news until July!

-Kevin

 

[saxamoophone]

Apple knows what's best for them. A lot of their customers would be furious if they cut off Netflix and Amazon support. I love the Apple ecosystem but that's not where I obtain my media.

I agree 100%.

Apple doesn't have the market share to be stupid enough to pull Netflix or Amazon anymore. The "masses" buy into the iOS ecosystem because of the Apps more than the OS itself. Remove the apps, and people would flock elsewhere. MS, HP, BB and Google would all love to have the exclusive Netflix app.

 

[err404]

Apple already said that the new policy does not apply to SAS applications (Software As a Service) like Netflix.

The issue is that the definition of SAS is very vague.

 

[v66jack]

I agree 100%.

Apple doesn't have the market share to be stupid enough to pull Netflix or Amazon anymore. The "masses" buy into the iOS ecosystem because of the Apps more than the OS itself. Remove the apps, and people would flock elsewhere. MS, HP, BB and g00gle would all love to welcome to have the exclusive.

100% right. I seriously doubt if Apple hadn't made such a success of the app store they wouldn't be as popular as they are today. I doubt many people would even own a smart phone if it wasn't for the apps. I know many people who don't use email, web browsing, calendars, visual voice mail. Instead they use angry birds, cut the rope, and other great apps. That's what brings people to the iOS platform in my view.

 

[reubs]

So with this subscription model, apps have to make the option available via the app even if it's available somewhere else for the same price?

Does that make the App Store more like a mall where the same CD is going to be $10 or $12 more expensive than at a place like Best Buy or Amazon?

I haven't followed this whole thing, but I don't see what the big deal is as long as folks can make a purchase somewhere else, also, and Apple doesn't always get a 30% cut.

 

[balamw]

Does that make the App Store more like a mall where the same CD is going to be $10 or $12 more expensive than at a place like Best Buy or Amazon?

In-app price must be same as available by other means.

B

 

[Daveoc64]

So with this subscription model, apps have to make the option available via the app even if it's available somewhere else for the same price?

Does that make the App Store more like a mall where the same CD is going to be $10 or $12 more expensive than at a place like Best Buy or Amazon?

I haven't followed this whole thing, but I don't see what the big deal is as long as folks can make a purchase somewhere else, also, and Apple doesn't always get a 30% cut.

Apple requires that the in-app price be the same as it is elsewhere.

It would be like the Mall requiring that retailers give them a cut of 30% on sales within the mall, but requiring them to not raise their prices within the mall to compensate.

 

[saxamoophone]

Apple requires that the in-app price be the same as it is elsewhere.

It would be like the Mall requiring that retailers give them a cut of 30% on sales within the mall, but requiring them to not raise their prices within the mall to compensate.

Which is a huge problem, since companies like Netflix and Amazon only work with approx. a 30% profit margin.

If Apple forces Netflix to provide a "in-app" purchase option for their service at the same price found normally Netflix would make ZERO profit from the customer....

It's very likely Netflix would then just pull the app, and offer it in other ecosystems (WP7 already supports Netflix streaming).

While a case could be made that Apple deserve a cut for hosting the App Store, I think the easiest solution is for Apple to unlock the device.

I've already paid for the iOS device, thus I should be able to use it to shop at any "mall" I want. For instance, Amazon is getting ready to start a Android App Store. Blackberry seems to have Android App support coming soon too.

Unlock the device and allow the free market to decide which mall is best. Easy solution

 

[Full of Win]

It's going to be a sweet day indeed when apple caves on this. It's insane to think that people that use licences like NetFlix and Amazon have an extra 30% sitting around to give to Apple.

 

[McGiord]

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/8C148 Safari/6533.18.5)

Do not mess up Netflix. Enough with Comcast trying to...

 

[agent_zero]

So...

If it is not considered a SAS, and Apple plays hardball with Netflix, then Netflix may be able to tell Apple to GFT as compromising their relationship threatens not only the mobile iOS devices but one of the prime offerings on the new AppleTV. Seems like their placement on the AppleTV gives them a bit of extra leverage...yes, no?

 

[Full of Win]

If it is not considered a SAS, and Apple plays hardball with Netflix, then Netflix may be able to tell Apple to GFT as compromising their relationship threatens not only the mobile iOS devices but one of the prime offerings on the new AppleTV. Seems like their placement on the AppleTV gives them a bit of extra leverage...yes, no?

There is no real alternative for users of Netflix and Hulu, whereas there are alternatives to using iOS products. NF and Hulu know they have the leverage here, its just a matter of time before Apple gives in.

Apple will try to save face, I bet, and cast a wide net as what the consider SAS thereby allowing them to stay.

 

[chrissnv]

lawsuit?

I actually think that neither Amazon nor Netflix will implement in app purchases for their apps. Why should they give a share of the money to the competition? The only reason could be that Apple is too big to give it a miss... this is going to be very interesting, might actually lead to an anti-trust lawsuit thinking about it ...

 

[travishill]

I'm guessing Apple will give on one side of the new rule, either:

-It will be optional to allow in-app purchase of subscriptions/content (what everyone- besides Apple- wants)

-In-app will be required, but cost can be adjusted (to make up the 30%). So some may pay for the convenience of using iTunes billing, others may find it worthwhile to jump out of the app to save.