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Apple Debuts App Store Subscriptions

Only time will tell how this move will play out for Apple ...
But with so many competitors into the phone and Tablet arena, this time around, Apple doesn't have that Super early start that the iPod enjoyed.

This time Microsoft, HP, Google aren't that close behind Apple, and they will surely see this subscription move by Apple as a way to sway Devs and publishers on board with them.

Just look at the HP Touchtab presentation last week, they already have agreements with TIMES and its not even out yet.

Publishers are too afraid that their business will end up like the music industry tied up with Apple ... This time they want other ways out if things dont go like they want too .. and this time they have plenty of choice ...I don't see this working out for Apple in the long run ... they just gave lots of Ammos for the competition.

But if this means that they take out NetFlix, ... Wallstreet journal ... Zinio ... Crunchyroll ... Even Dropbox could be taken off the app store (it does offer subscription for more space) if some of them get taken off the store... then its bye bye iOS for me. Too many apps make it possible to have subscriptions.
 
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This is crazy. From what we've seen, Apple is trying to fit a single business model to everyone. The 30% subscription will work brilliantly for some, deal breaker for others.

Look at The Daily. in return for 30% they have no printing and distribution to worry about. that 30% would usually be spent on printing presses, trucks, retailers margin, wastage etc etc. The content is theirs to sell, and this is a nice easy way to just focus on content without other costs.

Amazon don't have any costs that are being offset by that 30% take. They are already handling accounts, DRM, storage, distribution, apple sitting a 30% lump on them either totals their business model or raises prices, which they don't want to do because non iOS users get screwed. eBooks are expensive as it is. The content is not their own, they are already a store front. It's a very different business.

Pandora/last.fm/netflix operate on razsor margins, around the 1% mark. They have no wiggle room. 30% kills their business dead.

I think come July it's going to be a different story. Apple has done this before, they've always used it as leverage to get other concessions that content providers weren't allowing before.
 
Piggie said:
Can someone please, clearly clarify for me what this means, if anything, to the current Kindle App, or any similar app?

As I understand it, when you buy a book for the kindle you are redirected to Amazon's web site where the transaction takes place, once made, the kindle book you have bought appears in the kindle app on the iPad for you to read.

This 30% Apple tax has nothing to do with this does it?
Click to expand...

It means three things. First, the Kindle app will be required to have a button to purchase books through iTunes. Second, the Kindle app can no longer have the button that redirects you to Amazon's web site (which means that they are making it harder to order the book directly from Amazon). Third, Apple will keep 30% of the purchase price, so either Amazon keeps the price the same and makes no money (or perhaps loses money) on the sale, or Amazon increases its Kindle book prices ACROSS ALL PLATFORMS, since Apple is imposing a price fixing requirement. This is good only for Apple and bad for everybody else, particularly consumers.

Gizmodo has a good summary at this link.
 
Would a service like Dropbox who is free for basic version but who offers an upgrade of 50 gig per month and cost somewhere close to 9$ (I think) per month or a yearly payement be subject to Apples new rules ?

Does Skype qualify for these new rules (having a monthly or yearly payment for Skype's unlimited US-Canada calling)

If so ... OMG I hope these apps dont leave the Store ......

Can anyone tell me if the rules apply to them as well ?
 
marksman said:
Because microsoft does not control the experience or the content used on devices that use its OS. For one reason they don't make the devices that use it.

Apple both makes the hardware and the software. They also control what can run on it. People pay for this process and for apple to be the gatekeeper. A lot of people are fine with it.

iPhone is not riddled with virii and hackers like Windows is... So there is a real value that Apple is providing to customers. Also they are providing several large benefits to software developers. Nobody is being forced to participate on either side. If you don't like that level of control as a consumer don't buy an IOS device. However Apple has been massively successful with that level of control. This is not some kind of new twist, Apple has always totally controlled the software going on their devices. It is one of the key reasons why they are so successful.
Click to expand...

Yes, Apple has always had pronounced anticompetitive tendencies (enough to make Bill Gates look like a little school girl). But they haven't extorted revenue sharing or imposed price fixing on their content providers before. This is a new level of hubris for Apple, and a very dangerous move. They will only really be able to get away with this if they have market power in their space, in which case they are going to have an antitrust problem. If they don't have market power, then the content providers are going to tell them to screw off, and they will start losing market share, fast.
 
yetanotherdave said:
This is crazy. From what we've seen, Apple is trying to fit a single business model to everyone. The 30% subscription will work brilliantly for some, deal breaker for others.

Look at The Daily. in return for 30% they have no printing and distribution to worry about. that 30% would usually be spent on printing presses, trucks, retailers margin, wastage etc etc. The content is theirs to sell, and this is a nice easy way to just focus on content without other costs.

Amazon don't have any costs that are being offset by that 30% take. They are already handling accounts, DRM, storage, distribution, apple sitting a 30% lump on them either totals their business model or raises prices, which they don't want to do because non iOS users get screwed. eBooks are expensive as it is. The content is not their own, they are already a store front. It's a very different business.

Pandora/last.fm/netflix operate on razsor margins, around the 1% mark. They have no wiggle room. 30% kills their business dead.

I think come July it's going to be a different story. Apple has done this before, they've always used it as leverage to get other concessions that content providers weren't allowing before.
Click to expand...

Very intelligent post and I couldn't have said it better. I too think by the time this is effective, it will be changed or there will more clarification and allowances. It would be one thing if Apple were taking that 30% off of PROFIT but when they are taking it out of the revenue of the actual item, that wipes out many companies profit margins completely.
 
MaxPower49 said:
It's a dirty move by Apple if you ask me... you'd think that the record profits they are posting would be enough to keep them happy without rocking any boats and looking for more money right now... guess not.

It is pretty shocking the amount of people defending this move by Apple... I don't think a lot of people are really understanding what is going on here. As consumers we are likely to see higher prices for subscriptions, netflix, ebooks, etc. somewhere down the road as a result of Apple taking profits from other content providers.
Click to expand...

We are not gonna see higher prices...the app store lowered prices for apps...it will keep prices the same or lower..

All the Developer has to do is make sure the app can sell the subscription through the Apps Store or though their web site. The developer still makes money...just less money though the app store.

Netflix already has millions of subscriptions and makes crazy money. Apple will only make its 30 percent of new subscriptions. But Netflix will probably cut a deal with apple...to save them money.

If you guys think we will see higher prices...you are deluding yourself...Android does not even have a netflix app yet.

There are a 150 million itunes\IOS users...and they will be 50 million more by the end of the year...that is a lot of people to make money off of....nobody is leaving the app store.

Show me another mobile device where people stand in line for days just to get it every year? Show me another app store that has over 2 billion downloads?

Apple is about to rule the world!
 
karsten said:
looks like the walled garden isn't paying off in this instance, an inference by independent observers: http://money.cnn.com/2011/02/16/technology/apple_ipad_subscriptions/index.htm?source=cnn_bin&hpt=Sbin

i think the 30% take is crazy too, as i'm sure magazines have razor-thin margins as it is, charging hardly anything for their subscriptions. it's too bad to see apple heading down this road because in the end it never does play out very well for consumers and adopters of their products.
Click to expand...

And you know that the margins are thin because you are a big time magazine executive?

The 30 percent take has always been there, it's just gonna be enforced now.
Apple can't give these people a free ride!
 
tripjammer said:
We are not gonna see higher prices...the app store lowered prices for apps...it will keep prices the same or lower..

All the Developer has to do is make sure the app can sell the subscription through the Apps Store or though their web site. The developer still makes money...just less money though the app store.

Netflix already has millions of subscriptions and makes crazy money. Apple will only make its 30 percent of new subscriptions. But Netflix will probably cut a deal with apple...to save them money.

If you guys think we will see higher prices...you are deluding yourself...Android does not even have a netflix app yet.

There are a 150 million itunes\IOS users...and they will be 50 million more by the end of the year...that is a lot of people to make money off of....nobody is leaving the app store.

Show me another mobile device where people stand in line for days just to get it every year? Show me another app store that has over 2 billion downloads?

Apple is about to rule the world!
Click to expand...

The problem is Netflix shouldn't have to negotiate anything with Apple. Apple isn't hosting movies, providing DRM, providing the bandwidth, they're doing nothing. It doesn't matter if Netflix gets new customers if they lose money on all of them, they won't want unprofitable customers.

Apple "ruling the world" is about as scary as it comes. They've been acting like Microsoft if not worse the past few years.

Apple should tread lightly and focus on innovation instead of shady business practices. Nothing stays on top forever and what is "cool" today is looked down upon tomorrow.
 
Apple should not be too sure that it is going to get a pass on the anti-trust implications from this move. From the Wall Street Journal:

Some legal experts predicted Apple's new policies will receive close antitrust scrutiny, starting with an analysis of whether Apple has enough market power to stifle competition.

"I think it's going to raise some very serious anti-trust concerns that will be closely scrutinized by the FTC," said David Balto, an antitrust attorney who is a former policy director of the Bureau of Competition at the Federal Trade Commission.

"My inclination is to be suspect" about Apple's new service, said Shubha Ghosh, an antitrust professor at the University of Wisconsin Law School. Two key questions in Mr. Ghosh's mind: Whether Apple owns enough of a dominant position in the market to keep competitors out, and whether it is exerting "anticompetitive pressures on price."
​
 
The arguments which are made supporting Apple's move all seem to ignore key issues:

firstly, Apple makes a very healthy profit on the hardware, and one of the major selling points of the hardware is the availability of apps;

secondly, if Apple is looking to cover their costs in running the App store (many of which are self-imposed, such as the approval/review system), then 30% of revenue for subscriptions is massively inflated; and

thirdly, by combining (a) the unavailability of other methods of distribution onto i-devices (banning Flash and preventing other browers which could implement Flash) (b) a requirement that apps offer subsriptions in-app and (c) a restriction of linking-out to other methods of purchasing from in-app Apple are giving developers no middle-ground. They can either be on the i-devices and give 30% of revenue to Apple or not have access to that market at all. For many operators both options are likely to be un-economic and likely lead to close-downs (think Spotify, for whom the paid mobile app on the iPhone has been a major source of profit).

The results would either be (1) the competitor to Apple goes out of business or (2) the competitor raises prices available via ALL sources to cover the 30% it must give to Apple via i-device sales.

In either case - if Apple drives the likes of Spotify out of business OR the competitor has to raise all prices - if Apple then enters the subscription music market, then there actually could be anti-trust issues (as Apple certainly does have market power in that market).
 
Netflix / Dropbox ARE NOT "PRINT PUBLICATION'S"

For all the Pages of Lies I must Add This One Thing for All that are mangling up this whole Subscription based Article Apple Presented Yesterday.

"NETFLIX & Others Like It "ARE NOT INCLUDED IN THIS"

ONLY PRINT TYPE MEDIA To DIGITAL OFFERINGS ARE THE ONES THAT HAVE TO IMPOSE THIS SUBSCRIPTION BASED ADDITION, NO ONE ELSE

AGAIN, Please....

Only Print Media Type Publications Need to Add the Extra Button to the App, That is All.

Netflix, DropBox, and all the Other Application that ARE NOT Print Type Media Publications will not have to impose a 30% or The Subscription Button Because they Are Not Digital Print Media Offerings.


Who the Hell Let this Thread go on as far as it did to allow this Lie to keep festering.

Your Netflix and Drop Box and All the Other Non Digital Print Media Publication are Safe, They DO NOT Fall into this Subscription Plan.

And If Anyone Would have bothered to read the Main Plan, They would have read that in it, The links are Available At Apple's site.

Oh, And don't forget this site is festering with Trash from allot of Apple Haters that love to make this worse then what they really are all due to fear.

And since Gizmodo has such a "GLEAMING REPUTATION" -- Why, any fool that believe's their lies is just that, a fool and a idiot, They have posted many times that they will purposely sensationalize an Apple related story even without all the facts to get page clicks, And this is from Nick Denton Himself, So why do people still keep believing their lies.

Who is the Freaking Retard that brought up the Netflix analogy into This in the first place, He/She should be Flogged but then those who festered this are as much to blame as that person is.

And what does thai all have to do with Anticompetitive Apple Behavior?

NOTHING, Because their is none, no matter how hard you want to believe their is, It's Apples Store, Apples Terms and if you what to Offer a product you play by Apples Rules, Do you think Apple does this for Free, Do you think the should host all these "Apps" for Book Sellers on the Apple site, Let people Download the Application and use Apples Bandwidth for hosting The "App" for Free without getting a dime, while the Book Seller has a link direct to their data bypassing Apple and it makes 100% and Apple Makes Nothing. RIGHT....

"it's Business and Nothing More, So why are some taking it personally."

And I Suppose each person give's back 3 hours of your 8 hour work day to your Employer every day, And if you didn't, Then what would that be called.?

So why do you Expect Apple to do it? "Just Think About it."

DONE.


P.S.


And Remember Folks:

"NETFLIX & Others LIke It ARE NOT INCLUDED IN THIS"


Only Print Media Digital Distribution Channels Have to No One Else.

Kill The Dam Netflix / Drop box Lie NOW. it Dosn't' Exist and Never Will.


From Apple:

"Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app."

So,
You Still Have a Choice, Don't Click Apples Buy Button, And then Don't Read Into everything and speculate on the intentions and the outcome.

And Smile People.
 
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No doubt this has been said already here...

Just thinking about this a bit more yesterday and it occurred to me what the real intent here is. This isn't about some imaginary flat-tax (30%) with an eye towards fairness. This is about kicking Amazon, Netflix, Rhapsody, etc... of off iOS devices. Apple is trying to drive out its competition from its devices.

They're in the entertainment delivery business and these other services are their competition. They want you shopping iTunes, iBooks, etc... This has the added benefit of course of putting a dent in the wallets of their competition.

I could be wrong, and maybe this is just an overreaction. However the more I think about it, the less I like this move from Apple. From a consumer standpoint it's not very friendly.
 
I to am only reading subscription model with this. For some reason I don't think in app purchases will be affected by this. Of course this could change on whim but all I am reading is subscription only.
 
SG1-1 said:
For all the Pages of Lies I must Add This One Thing for All that are mangling up this whole Subscription based Article Apple Presented Yesterday.

"NETFLIX & Others Like It "ARE NOT INCLUDED IN THIS"

ONLY PRINT TYPE MEDIA To DIGITAL OFFERINGS ARE THE ONES THAT HAVE TO IMPOSE THIS SUBSCRIPTION BASED ADDITION, NO ONE ELSE

QUOTE]

This is completely wrong: Apple themselves say this:

"CUPERTINO, California—February 15, 2011—Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc"

http://www.apple.com/pr/library/2011/02/15appstore.html
Click to expand...
 
SG1-1 said:
For all the Pages of Lies I must Add This One Thing for All that are mangling up this whole Subscription based Article Apple Presented Yesterday.
Click to expand...

Wow. I'm sorry what were you saying? ;)

Seriously though, would you mind citing where you're getting your print media only assertion? I'd love for what you're saying to be true, but I can't find anything like that anywhere. Including in Apple's own Press Release on their website.

http://www.apple.com/pr/library/2011/02/15appstore.html

Thanks!
 
Centient said:
Just thinking about this a bit more yesterday and it occurred to me what the real intent here is. This isn't about some imaginary flat-tax (30%) with an eye towards fairness. This is about kicking Amazon, Netflix, Rhapsody, etc... of off iOS devices. Apple is trying to drive out its competition from its devices.

They're in the entertainment delivery business and these other services are their competition. They want you shopping iTunes, iBooks, etc... This has the added benefit of course of putting a dent in the wallets of their competition.

I could be wrong, and maybe this is just an overreaction. However the more I think about it, the less I like this move from Apple. From a consumer standpoint it's not very friendly.
Click to expand...

Netflix is on Apple TV2 and is a Primary market Strategy From Apple & Netflix Working Together.

Doubt it.
 
Centient said:
Just thinking about this a bit more yesterday and it occurred to me what the real intent here is. This isn't about some imaginary flat-tax (30%) with an eye towards fairness. This is about kicking Amazon, Netflix, Rhapsody, etc... of off iOS devices. Apple is trying to drive out its competition from its devices.

They're in the entertainment delivery business and these other services are their competition. They want you shopping iTunes, iBooks, etc... This has the added benefit of course of putting a dent in the wallets of their competition.

I could be wrong, and maybe this is just an overreaction. However the more I think about it, the less I like this move from Apple. From a consumer standpoint it's not very friendly.
Click to expand...

That's exactly what I'm getting from this too, actually.

Netflix / Rhapsody / Napster / Pandora / Sirius XM = iTunes movies/music
Dropbox = Mobile ME
Kindle = iBooks

Apple knows that 30% is unaffordable to these companies, so they'll have to pull their apps from the store.

As an IT manager I get to decide what devices are allowed on the network. If I lose any of those apps due to Apple's arrogance and greed I will no longer allow iOS devices to access the network. That's about 30 sales Apple will never see again. Not a big number, but my way of protesting.
 
SG1-1 - do you disagree with what is written in Apple's own press release? Apple states that it applies to "to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc".
 
SG1-1 said:
SNIP
Click to expand...

There's a lot of bold there, but no quoting the bit you are referring to.

I hope you're right, but I can't see why apple would reject the sony reader if it is true. That's digital content, or are ebooks the fuzzy grey area exception because they are also available in print form?
 
LagunaSol said:
Amazon adds retail markup to books they sell for the Kindle. You bought the Kindle, why should you have to pay Amazon additional profit for content? Where's the anti-Kindle outrage, people?
Click to expand...

You're joking, right?

When I buy a book on a Kindle, Amazon has to pay my credit card company transaction fees. They have to pay for the servers that my Kindle downloads the book from. They have to pay for the software to manage the DRM on the book and they have to pay for the bandwidth from their ISP to download the book. And if they want a little bit of profit for that work, then so be it.

When I buy a book on the Kindle app on an iOS device, NOTHING in that above statement changes. What part does Apple play in that transaction? None. They don't host the book on their server, they don't use a single byte of bandwidth to get that book to the iOS device. What the hell did Apple do in that transaction to deserve a 30% cut? Nothing.

If I were Amazon, I'd yank the Kindle app off the App Store, stop selling Apple products on Amazon, and make sure people know why with a message in big, bold letters on amazon.com that even Helen Keller would be able to see.
 
Yeah, so this will probably go nowhere but I just contacted the two folks listed at the bottom of this PR from Apple. I've asked them if they can clarify whether subscription services like Netflix, or one-off purchases like books from Amazon will be required to pay 30% to Apple if I make those purchases through the iOS app.

Will follow up if I receive any kind of response. I think the one thing we can all agree on is that the specifics haven't been very specific to date.
 
thetexan said:
That's exactly what I'm getting from this too, actually.

Netflix / Rhapsody / Napster / Pandora / Sirius XM = iTunes movies/music
Dropbox = Mobile ME
Kindle = iBooks

Apple knows that 30% is unaffordable to these companies, so they'll have to pull their apps from the store.

As an IT manager I get to decide what devices are allowed on the network. If I lose any of those apps due to Apple's arrogance and greed I will no longer allow iOS devices to access the network. That's about 30 sales Apple will never see again. Not a big number, but my way of protesting.
Click to expand...

As an IT Manager why would you let these products with the exception of Dropbox on you network anyways?
 
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