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Apple Debuts App Store Subscriptions
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FAIL. Does Visa deal with infinite re-delivery (re-download) of product? Does Visa bring paying customers to your magazine shop?
The Phazer said:
did you miss this line? "when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing"
Netflix and the others will be fine. It's only if they want to offer a means for users to subscribe from within the app.
Does this apply to Macs as well? Apple sure played a part in the process by actually designing the Mac I might reading an e-book on. Or if I subscribe to Bloomberg using a native Mac Bloomberg app, should Apple get 30% of what I pay to Bloomberg?
Here is the thing: Apple says you must offer equal or better subscription for the in-app option.
This means that Netflix could still offer their existing subscription, with the full snailmail rental ability and all, and then offer a cheaper subscription for the in-app subscription that lets you do digital only. This means that people who pay Netflix directly get the added bonus of getting physical rentals as well, but they pay a bit extra to do it.
Most publishers can do similar offers, where you pay basically the same as the in-app subscrption, but you also get a physical copy of the publication mailed to your house.
There is plenty of incentives that companies can offer for signing up directly, and Apple does not stipulate that they can't do that, as long as the price of the subscription is not less than the amount offered in-app. I see no reason why most publishers can't do this. The only ones that are screwed are the ones that exclusively digital and have nothing to offer as an incentive for paying them directly.
Apple Continues To Innovate...
After upsetting the Music Biz for a decade here comes the publishing industry.
This has the potential to be huge. Having said that The Daily is pretty weak, crashes constantly and will hopefully show the path not to follow. I'd like to see the NY Times or Wired tackle this one.
After upsetting the Music Biz for a decade here comes the publishing industry.
This has the potential to be huge. Having said that The Daily is pretty weak, crashes constantly and will hopefully show the path not to follow. I'd like to see the NY Times or Wired tackle this one.
Not really. Like with everything a margin percentage does not mean that is all profit.
The bandwidth and website upkeep requires money, the employees who work on these things cost money, programming and creative ideas etc.etc.
Sometimes upfront cost accumulate for quite a while and are only recovered later IF the product is successful.
There isn't a company that does all of that for free.
Without being on the inside and knowing all related costs anybody who claims 30% is too high is just guessing.
It may be too high or even too low or reasonable and fair.
Who really knows? Apple!
Absolutely, that's the key right there. Web sites that publish books have the same issue. If you are a fantasy sports publisher, Amazon will sell your books cheaper than you can. So those sites give you incentives to buy from them directly (earlier delivery, extra bonus thrown in, etc.). They don't whine that it's unfair for Amazon to undercut them on price, they just deal with the realities of the marketplace and get creative. Either way their book is being sold.
Apple invented this marketplace. Publishers would not have this outlet at all if it had not been created by Apple. Time for them to get creative.
What's drive me crazy is that nobody taking care of that :
"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.
hey ho, Steve Jobs is back?????
"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.
hey ho, Steve Jobs is back?????
And they don't even work hard for that 30%, just look at all the compromised itunes accounts.
Any in-app purchases or subscriptions are delivered directly from the publisher's servers, none of that data ever sees an Apple server.
And why do think particularly stored catering to tourists have a Visa/American Express sticker at their door? Because knowing you can pay with these cards does draw in customers to their store.
No it doesn't! It is strongarming an entire industry because Apple has a de facto monopoly in the tablet market right now. It would be a fair if the decision would have been left at the publishers to use or not use the new service. This is BS and will harm the iOS ecosystem, which already struggles to get useful content providers to jump on board.
T.
I think the publisher will have to inform the customer of the value of subscribing outside the app, like that ability to switch platforms and take the subscription with you. Buying in the app will lock you into the iplatform and will not transfer you content.
If they make this VERY clear I think they will do ok.
If they make this VERY clear I think they will do ok.
hey ho, Steve Jobs is back?????
He never left, he is just working from home basically. He is still overseeing a lot of operations amongst his teams at Apple.
But that in-app subscription must include 30% going to Apple. In the software business, distribution and payment processing could well amount for 30% of sales price, so that's not bad for apps. But for subscription services it's nothing like that. As it's recurring the overheads are split over time - there are few viable subscription businesses where these costs are more than 5% of revenue. Most content aggregation services that make content available (Netflix et al) or even Amazon's for the Kindle (in direct sales) have their entire margin set at less than 30%.
Again, you can't run a business where you make money if a customer clicks the link to your site in the app , but LOSE money if they click the Apple sub button, when the Apple button must be given better prominance as Apple decide the layout of the app store. It makes the entire business model collapse.
But that's the point - it makes it impossible to run any kind of business that runs on less than a 30% margin, because at that point Apple will take more than your profit on each sale!
The only way I can see around this is for Netflix to raise it's subscription price 30% for anyone who wants to access via an iPhone, irrrespective of if they subscribe through Apple or via Netflix (even if they have a DVD subscription - presumably unless you pay 30% extra you'll be locked out of iOS access to your account). Does this sound like good news to anyone in their right mind?
Yes but this was only rumor and never be an official statement from Apple.
This is the first official proof that Steve Jobs return to work.
Sure it does. Especially if the cc gives you incentives vs. cash that gives you nothing.
This press release could have been written weeks ago.
Doesn't matter what they "want.". They have to offer a means to subscribe from within the app now.
What's drive me crazy is that nobody taking care of that :
"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.
hey ho, Steve Jobs is back?????
He never gave up the CEO spot. He just said he would mostly be working from home on the big strategy stuff.
Not sure how that would work. Two lines confuse me:
"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,"
"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."
My line of thinking (based on nothing) would be that since offering existing customers free digital version would fit into "publisher bringing in new/existing subscriber". The part about matching the offer outside of the store might only apply if the publisher is charing money outside of the store ie SI.com says it's $15.99 for a year of digital SI, the in-app must be the same but if SI.com says, "iPad version free with phyisical subscription" they could allow it free on the app for existing and charge in-app for digital only.
But the fact is that Apple is the merchant not the credit card. Apple use credit card to receive the payment from customer.
And merchant take 30, 40, 50, 60 and 70% of commission on product
If you actually read what was in the press release, you would see that companies cannot offer the in-app subscription for more than the are asking outside the app. The "equal or better" clause is there to specifically prevent that.
I have no doubt that Apple will also allow any company to offer their apps without the in-app subscription feature, and simply let them charge for subscription their own means. This is especially true of any companies that already have their apps on the store, I don't think Apple will change anything for them because the developer agreement for them has not changed.
It will be interesting to see if apple allows "iOS-only" subscriptions at a lower price.
Oh boy that means I can continue paying $5.00 an issue for Time Magazine on my Ipad for a total annual subscription cost of $260.00!
Whoopee!
Whoopee!