Apple Debuts App Store Subscriptions

[Wolfpup]

A price increase just isn't going to happen, at least not just because of iOS. iOS simply doesn't represent a great enough percentage of these companies' customers to make that viable.

Amazon, for instance, is not going to hike their kindle book prices by 30%. They're not going to screw up the rest of their kindle business just to play on iOS, especially when they have to compete with Apple (who obviously don't have to worry about this), the B&N Nook, and the Sony eReader.

Though Sony and Barnes and Noble are in the same boat. I suppose Amazon thinks its win/win. Either they actually get to have everyone else raise their prices 30% and get a 30% cut on everything, while increasing their own sales due to cheaper prices, or they don't have to compete at all on iOS.

I can't imagine this would hold up as legal though. It's just so over the top.

At any rate, I've gone from excited about the iPad 2, to no wanting it if it were released today just within the past 48 hours. I will not support companies or individuals that act as thugs if I can help it.

No, they cannot do this:
“All we require is that, if a publisher is making a subscription/purchase offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe/purchase with one-click right in the app."
If you sell something outside the app that can be used inside the app, you will also have to offer it via in-app purchasing.

Which means everyone would have to raise their prices by 30%.

 

[captaincane64]

What people don't understand is Apple sells content too. They are in direct comeptition with all the people people are worried about loosing.

Apple is protecting their own interests. If they don't then Apple will just have to get out of the content business entirely, themselves.

They don't have a choice given how these other companies have chosen to play it. It would be absurd to craft the sword your competitor will use to stab you to death. Apple is protecting themselves and their business.

Apple, rightfully so, believes most of those companies will have to come to the table because the number of customers Apple represents. At the same time they get to protect themselves as content providers.

They are not going to back off on this. They gave it some time to see how things will settle down, and the writing on the wall was clear... these other businesses were going to leverage Apple's own innovations to compete with them in the content space. Apple is now saying, there is a price to pay for that...

It seems entirely reasonable.

sums it up pretty well.

this is what happens when you are first to the table with a great product that people enjoying using!!!!

Apple is doing what they should be doing congrats to them.

And we as consumers have never gotten the best price that's the way businesses work. To think we are ever going to get the best price from a business is crazy.

 

[Wolfpup]

this is what happens when you are first to the table with a great product that people enjoying using!!!!

Apple wasn't first to the table with PDAs/Smartphones. They weren't first to the table with the services and products they're trying to skim from. Even if they WERE that doesn't justify stealing from others, but they were not.

Apple is doing what they should be doing congrats to them.

You're CONGRATULATING them for behaving immorally?!?

And we as consumers have never gotten the best price that's the way businesses work. To think we are ever going to get the best price from a business is crazy.

Really. So prices going up 30%, just so one company can abuse their monopoly to steal from another company-that's a-okay with you? That strikes you as moral?

 

[Warbrain]

I can't really fault Apple on this one because Amazon does the same thing with books on the Kindle.

 

[quetzalcoatl]

I can't really fault Apple on this one because Amazon does the same thing with books on the Kindle.

And the fact you can't see the difference between the two is scary.

 

[Warbrain]

And the fact you can't see the difference between the two is scary.

How? What is any different about Apple doing the same exact thing as Amazon? Don't just state that I don't know the difference, prove it. Back yourself up.

 

[RollTide1017]

No, they cannot do this:
“All we require is that, if a publisher is making a subscription/purchase offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe/purchase with one-click right in the app."
If you sell something outside the app that can be used inside the app, you will also have to offer it via in-app purchasing.

This just doesn't make sense too me, I understand what you wrote, just that the rule doesn't make sense.

This means that things like the ADT Pulse app will have to be pulled. You can't purchase service from ADT in the app but, you can use the app to access your security system that you obviously purchased outside of the app. Why does Apple deserve 30% of ADT home security system sells that use the app? What about my dish network app? You can't purchase Dish Network subscription through the app but, you can use the sling function to view the services you bought. So, Apple thinks it deserves a percentage of Dish Network subs.

 

[RollTide1017]

I can't really fault Apple on this one because Amazon does the same thing with books on the Kindle.

Of course Amazon makes money off selling books, so does Apple from books sold through iBooks, so does Barnes and Nobles, so does Books a Million, so does Walmart, so does Target and any other store that sells books. That's how companies stay in business, by making money off of items they sell.

Apple wants to also make money off of books that Amazon sells through kindle. Amazon does not make money off of books sold through iBooks so, how is it the same again?

 

[Warbrain]

Of course Amazon makes money off selling books, so does Apple from books sold through iBooks, so does Barnes and Nobles, so does Books a Million, so does Walmart, so does Target and any other store that sells books. That's how companies stay in business, by making money off of items they sell.

Apple wants to also make money off of books that Amazon sells through kindle. Amazon does not make money off of books sold through iBooks so, how is it the same again?

You can still offer it outside of the app. If people want to do that they can. I don't find this unreasonable. Walmart, Target, and Kmart all make a profit off of products that they sell but don't make. If you are the marketplace you can request a percentage.

 

[Wolfpup]

You can still offer it outside of the app. If people want to do that they can. I don't find this unreasonable.

Well I do, because they have to offer it in the program with a 30% cut to Amazon. Bad enough if they couldn't offer it in-program. But a 30% cut?

Walmart, Target, and Kmart all make a profit off of products that they sell but don't make.

This is not the same thing in the slightest. Wal-Mart does not make money from products that Target sells.

If you are the marketplace you can request a percentage.

They're demanding a percent, not requesting, and they can only do that because they have a monopoly on distribution.

 

[Synergie]

There are still options:

So what would happen if they just didn't offer the ability to purchase books from the iphone app at all?? And just have it as an app that can access your content purchased through other means (on your laptop etc)?

Or only charge 30% markup for books bought on the iphone itself (call it Jobs Tax), but still charge regular prices if you buy it through your laptop? I am sure that is doable... to have some way to recognizing if you are accessing the kindle store through your iOS device vice another means? I know they said the content itself must be the same price or cheaper than externally bought... so the 30% would be an additional fee... that way the actual book itself would follow Apples rules but the 30% tax would be an extra added fee applied if you buy in app.

Really though....I can't see how Apple should get 30% of every book purchased through other ereader apps! That's preposterous! On a 20.00 book you'd have to pay an extra 6.00 to Apple! eeeek!

I am REALLY starting to consider an Android device now! This tactic seems to be going hand in hand with the iBooks fiasco! First they drive us away from iBooks towards Kindle / Kobo etc and now they are trying to oust all other ebook sellers!? My only beef is that my laptop, net drive, etc are all Mac and I sync everything with Mobile Me! I have become so tied to Apple now!

 

[Deliverator007]

How? What is any different about Apple doing the same exact thing as Amazon? Don't just state that I don't know the difference, prove it. Back yourself up.

For one thing, Amazon didn't get you to buy a Kindle based on the expectation that you could freely read your Nookbooks and iBooks, watch your Netflix, etc. on it, and then afterwards turn around and either (a) force all those other content providers to increase their prices by 30%, or (b) force those programs off of the Kindle due to this change.

 

[neko girl]

I can't really fault Apple on this one because Amazon does the same thing with books on the Kindle.

This is the confusion, I think:
-No one is faulting Apple for charging 30% off of a subscription sale, from the App Store, through an App
-People think Apple is crazy because it insists that the App Store price must the same price as any other subscription mechanism that is employed.

This is like Logitech or Dlink or Dell charging you (the consumer) a percentage because their mouse, or their router, or their monitor is what ultimately brought you the content. Not only that, Logitech, Dlink, and Dell would insist that if you somehow purchased content without them making a profit, the sale price paid for that alternate delivered mechanism must match the sale price they are hiking up because the middle man insists on getting paid.

Visa and Mastercard charge transactions rates as low as $0.25 per transaction. 30% for not doing anything at all does not make sense for video based content, music content (like Rhapsody - read why Rhapsody will not sell in Apple's new model), and for other merchants like Amazon who already sell at clearance rates.

This is an anti-consumer move by Apple. I'm surprised you don't see the implications.

Apple is easily one step away from demanding 30% of ad revenue (like from Admob) for free apps that employ these services.

 

[neko girl]

You can still offer it outside of the app. If people want to do that they can. I don't find this unreasonable. Walmart, Target, and Kmart all make a profit off of products that they sell but don't make. If you are the marketplace you can request a percentage.

If you offer it outside the app, you have to price match. The price match is the issue. Apple is demanding a price match, and simultaneously increasing the price of the product by 30%.

 

[quetzalcoatl]

How? What is any different about Apple doing the same exact thing as Amazon? Don't just state that I don't know the difference, prove it. Back yourself up.

So who exatctly is apple competing with. It is a simple tax to use the app store. Amazon is competing with Barnes and Noble and kobo just to name 2. And in my one example I will give they assume an awful lot. And if the rules apply to purchases of books then Amazon did the negotatiing to get the books agreed to sell them and because it was bought through an app on an apple device apple gets a percentage. And in case you are wondering amazon currently has 6X the books as ibooks. So who is bringing who to whom? And if you did not know with most new ebooks the price is set by the publisher. So they get exactly what they want for it.

How about the fact that apple assumes that anything that is bought from within the app that they brought you to the product. And of course the only way under the new rules that you can buy anything within the app is through apple. And they know that most people will use the easist solution to by therefore giving themselves the 30%. If it was not just a tax they would not be afraid to level the playing field and allow in app links to purchase. Or different prices for it.


I could go on but I am not going to argue comon sense.

 

[manu chao]

This just doesn't make sense too me, I understand what you wrote, just that the rule doesn't make sense.

This means that things like the ADT Pulse app will have to be pulled. You can't purchase service from ADT in the app but, you can use the app to access your security system that you obviously purchased outside of the app. Why does Apple deserve 30% of ADT home security system sells that use the app? What about my dish network app? You can't purchase Dish Network subscription through the app but, you can use the sling function to view the services you bought. So, Apple thinks it deserves a percentage of Dish Network subs.

For things like Kindle books, Apple has already confirmed that they will have to offer an in-app purchasing option.
The biggest problem with Apple's new stance/rule is the question of bundling. Apple has stated that newspapers that offer online access for free with a print subscription can continue to offer this for free via iOS apps as well. Basically, if you bundle a free service onto a paid service, they allow you to access this free service without charging for it via in-app purchasing.

For your ADT Pulse app, one could argue that the security service is the 'print subscription' and the remote access is just a free extra (and thus can remain free in iOS). Or, if ADT Pulse sells the remote access as an add-on to their security services (and allows this remote access via the web or smartphone apps), then the add-on itself should be purchasable from within the app.
Essentially, if services have a 'digital' component that is sold separately, then this separate component would need to be available for in-app purchasing.

 

[JamSandwich]

Apple's "monopoly" over its own device is no different from Microsoft's "monopoly" over the Xbox 360 or Sony's "monopoly" over the PS3.

I agree 100% that this move is bad form and anti-consumer... and I'm deeply concerned that it will chase content away from iOS that I care about -- Netflix and Zinio as two prime examples.

Apple has the right to set the terms for content provided on its closed platform, but they are coming awfully close to shooting themselves in the foot. I think they're asking too much of a lot of providers. It basically means anyone selling items within iOS had better be making a margin of better than 42% ($7 cost on a $10 sale, for example).

(As for how what Apple's doing is similar to what Amazon, et. al. is doing, it's charging for paid content delivered on its device... that said, Apple is either bold enough not to care, or blind enough not to see that in the bigger picture, services such as Netflix and Kindle, even if they don't generate revenue for Apple, are beneficial to the platform and may go away).

It's time for angry consumer letters, methinks.

Rather than arguing until they're blue in the face about the nature of what Apple's doing (whether it's monopolistic or not, whether it's substantially different from models on other platforms), what posters who are concerned about this should be doing is formulating a plan about how they will tell Apple they don't like the way this smells.

That means Tweeting, sure, but it also means sending them letters of both the snail and e-mail variety and letting anyone with an iPad know (IMO these are much larger issues for the iPad than the iPhone... they could seriously drive me to a different tablet, but they won't drive me to a different phone).

In terms of those communications, it also means avoiding overwrought screeds about how they're "abusing their monopoly" and instead appeals the company may actually heed: i.e: I don't like what you're doing. The degree of openness currently permitted to players such as Netflix and Zinio are a good thing, especially considering that Apple has no clear alternative to these services. If this chases those providers away, I will move to a different platform for my tablet needs. Etc.

But that's all IMO. I really like my iPad. But I don't expect it would be that hard to move to a different platform by the time this takes effect, as I'm sure there will be rival devices that will have some form of edge (probably raw power) over the iPad.

 

[Wolfpup]

-No one is faulting Apple for charging 30% off of a subscription sale, from the App Store, through an App

I do. If *APPLE* wants to take a 30% cut to sell a newspaper or magazine or whatever through iBooks, that's fine. If Apple wants to take a 30% cut FROM Amazon to do the same, that's not fine, even if Amazon can raise the price 30% just inside the iOS program. That would be less wrong, but still outrageous.

Visa and Mastercard charge transactions rates as low as $0.25 per transaction. 30% for not doing anything at all does not make sense for video based content, music content (like Rhapsody - read why Rhapsody will not sell in Apple's new model), and for other merchants like Amazon who already sell at clearance rates.

Yeah, and Visa and Mastercard do actually provide a useful service. If anything, Apple's "help" would cost Amazon money even if Apple took a 0% cut, since Amazon would have to synchronize their back end with Apple somehow, etc. Add a bunch of pointless complexity that gives them no benefit, even if it didn't cost them.

Apple is easily one step away from demanding 30% of ad revenue (like from Admob) for free apps that employ these services.

Was that what someone brought up that Apple actually was hinting at that, and the FCC kind of glared hard at them?

I actually don't think that's any different from what they're doing here. They have no right to the money they're demanding.

 

[ITGuy]

I don't think people should be panicking just yet that Netflix and Amazon will be raising their prices 30% to comply with the new terms for content subscriptions. I believe this drastic step by Apple was to get the attention of content owners, and I think it's safe to say they did just that.

The iTunes App Store is a closed and curated platform and Apple has every right to impose their own rules for the benefit of Apple shareholders. Any attempt to make antitrust claims stick against Apple will fail.

Content owners know full well that iPad 2, along with iPhone 5 and iPhone 5 mini will be major blockbusters that Apple will have a hard time keeping in stock. Apple will respond to any perceived threat by Android and will release a low cost un-subsidized iPhone, the norm outside of North America. Apple will continue to sell increasing boatloads of iPads, iPhones, and iPod touch devices even if the Netflix, Rhapsody, and Amazon Kindle apps are removed from the App Store. The attempts by media companies to prop up iTunes Store competitors while shutting out Apple will fail and by now are a bit too late.

Apple has been repeatedly rebuffed by content owners in securing rights to an ITunes media subscription service. Apple is playing the only cards it can at this point, and hopefully this will all play out in time to launch an iTunes media subscription service hosted from the new data center by the Summer. I believe the point Apple and Steve Jobs is trying to make is that content owners will no longer profit from the iTunes App Store unless Apple and its shareholders also profit.

-ITG

 

[Deliverator007]

You can still offer it outside of the app. If people want to do that they can. I don't find this unreasonable. Walmart, Target, and Kmart all make a profit off of products that they sell but don't make. If you are the marketplace you can request a percentage.

iOS isn't the marketplace. It is an operating system, and the app store is simply a restraint that Apple has placed on our ability to load programs on the devices that we bought and own. The Kindle store is a marketplace for content, and so is the iBookstore, but not iOS. In any event, Apple is dictating the prices outside of the app, so consumers would still pay 30% more whether they buy it in the app or outside of the app.

 

[Vizin]

How? What is any different about Apple doing the same exact thing as Amazon? Don't just state that I don't know the difference, prove it. Back yourself up.

Amazon is providing a storefront for the books, so it makes sense that they a percentage of the book sale price. It's the same way a bookstore gets some of the money from a book, which is reasonable. It's the same way Apple gets 30% of the sale price from a paid app, which is reasonable.

When you buy a book via the Kindle app, Apple has no part in that. They're not providing a storefront, they're only providing a billing system. (Which they're FORCING developers to use.)

Target sells Kindles. Imagine if Target demanded Amazon give them 30% of all books sold on Kindles purchased from Target. Does this sound reasonable? Obviously Target wouldn't do this, because Amazon would tell them where to shove it. Except in this case, Apple is the only way in. They're the only store in iOS town, and it's a big town, so they feel they have some weight to throw around.

 

[Wolfpup]

Apple's "monopoly" over its own device is no different from Microsoft's "monopoly" over the Xbox 360 or Sony's "monopoly" over the PS3.

I'm not a fan of these closed platforms, but there's still a huge difference here-iOS isn't closed for any particularly good reason (the consoles are at least subsidized) and Apple is taking a cut they didn't earn from other companies aside from just taking money from the program sale itself.

(As for how what Apple's doing is similar to what Amazon, et. al. is doing, it's charging for paid content delivered on its device...

Amazon is not demanding a 30% cut from Apple for iBooks sales. This is not the same thing.

Rather than arguing until they're blue in the face about the nature of what Apple's doing (whether it's monopolistic or not, whether it's substantially different from models on other platforms), what posters who are concerned about this should be doing is formulating a plan about how they will tell Apple they don't like the way this smells.

Only immediate plan is I'm not buying an iPad 2.

In terms of those communications, it also means avoiding overwrought screeds about how they're "abusing their monopoly"

That they're abusing their monopoly is a simple, factual statement, not an overwrought screed. They have an absolute monopoly on iOS software distribution, and are abusing it to attempt to steal 30% off what other companies get for their products.

There is no way to disagree with any of that-anyone who does is not understanding what's goin gon. I continue to be amazed how people can think this is the same thing as a store marking up a product they sell.

as I'm sure there will be rival devices that will have some form of edge (probably raw power) over the iPad.

Not sure how it'll work overall, but HP/Palm's WebOS tablet has the same screen specs, and it's faster and dual core and more RAM and real multitasking. Could be promising. I've got iOS programs, but...oh well I guess.

The iTunes App Store is a closed and curated platform and Apple has every right to impose their own rules for the benefit of Apple shareholders. Any attempt to make antitrust claims stick against Apple will fail.

They have a monopoly. They're abusing it. Not sure that "we have a right to the monopoly we've artificially imposed" is much of a legal defense. Maybe it is, but it's certainly not ethical.

I believe the point Apple and Steve Jobs is trying to make is that content owners will no longer profit from the iTunes App Store unless Apple and its shareholders also profit.

Unethical. They have no right to profit off others randomly. They're behaving exactly like a protection racket.

 

[Vizin]

No one has been successfully able to answer this: why does is make sense that Apple get a 30% cut of services provided via iOS, but it wouldn't make sense for Microsoft to get 30% of services provided via Windows?

Why shouldn't Microsoft get 30% of my Netflix or Pandora subscription if I set up that service on Windows?

 

[manu chao]

No one has been successfully able to answer this: why does is make sense that Apple get a 30% cut of services provided via iOS, but it wouldn't make sense for Microsoft to get 30% of services provided via Windows?

Simply because MS knows it would not be able to get away with this (not least with it being the dominant desktop OS). Apple still thinks it can get away with this but this would not be the first time that Apple had to back down an appstore rules because of public and regulatory backlash.

 

[Synergie]

If this goes through, I can see Kindle, Kobo, etc all removing their apps from the App Store and heading to .........Cydia Now that would be too funny!