And how does this not apply to Macs? Apple has sold millions upon millions of OS X devices.
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Apple Debuts App Store Subscriptions
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I can see your point. I disagree with it, but understand it... and I'm also aware this comes across as trolling, but assure it's not (just imagine if a buddy of yours asked you the question, instead of some stranger). If someone offered you 30% of their sales for "nothing" (as you've said), would you take it?
The part I disagree with is that Apple is doing nothing (or Amazon). They can charge that because to 30% entry fee gets the publisher access to millions of potentional customers. They're free to sell their magazines on other tablet platforms if they want to and get 100% of those profits.
Well you have to consider the publicity that the App Store brings. That and the ease of use. A possible new subscriber on an iOS device just has to tap one button and enter a password to subscribe VS entering in all of their information and a credit card number (which they may or may not have with them at the time). And I for one am not a big fan of filling out a bunch of fields on my iPhone.
Apple brings the subscribe the ultimate impulse buy platform, yes the publisher loses 30% but they most likely gain way more subscribers than they would otherwise.
EXACTLY!
Also, who here thinks that Apple is doing this in a vacuum? Surely they've spoken to a handful of publishers about this model. My hunch is that Apple wanted to launch this upfront with the iPad, but they couldn't convince publishers that the platform was viable. Now that publishers see it is rock solid and growing, they're more likely to play along with Apple.
I'm not sure we have a good handle on how this actually working. I'm reading, and I could be mistaken as the info is still sketchy, that only subscription based services are going to incur this fee.
So one-off purchases like Kindle books for instance seem not be effected. I'm not sure how something like Netflix works in this scheme, but I get the impression we're really looking at publishers paying this fee. As Netflix isn't a publisher I'm not sure they are looking at being effected by this.
Again, I think the lack of clear information on just what is and what is not included is leading to alot of understandable, but perhaps incorrect assumptions. Myself included perhaps.
You are right it is a two way street but for the children posting here, Apple is evil charging so much, how dare they. I say no problem if companies really thought Apple was not worth it they go to android in a heartbeat. I am sure some will but I doubt many will because those that own Apple products also tend to spend more use less free stuff and have more disposable
capital. As long as my ipad continues to give me pleasure in using it not only personal but work related I will keep giving Apple my money and writing it off as a business expense
life is good outside McD.Em they are billing, marketing and pushing the content out to devices. Thats a lot more then billing.
And no way Apple permits that. As soon as they see iOS-capable subscriptions costing more than non-iOS capable subscriptions they'll add a new rule to cover that (if they haven't already).
I'm guessing SiriusXM won't be happy, btw. And major league baseball - they'll have to sell extra innings from within the app, it seems.
Loopholes?
I'm wondering if "the same or better offer" allows wiggle room for the content providers to alter their pricing structures to explicitly include a delivery channel cost? So, someone like netflix could offer a $9.99 subscription, but have the fine print read "subscription cost aggregates membership and origination fees". That way they have specifically called out the channel costs in the fee structure and *are* providing the same offer through in-app purchase, even though the total cost is higher.
I'm wondering if "the same or better offer" allows wiggle room for the content providers to alter their pricing structures to explicitly include a delivery channel cost? So, someone like netflix could offer a $9.99 subscription, but have the fine print read "subscription cost aggregates membership and origination fees". That way they have specifically called out the channel costs in the fee structure and *are* providing the same offer through in-app purchase, even though the total cost is higher.
And why not limit this to 'content-based apps on the App Store', let's extend that to subscriptions for services, like Skype for example. Make a call through Skype on an iOS device and pay 43% than on Android (or OS X, or Windows).
Apple still has to pay a portion of that 30% to Visa/Mastercard/AmEx for merchant processing fees.
I don't know why everyone is so up in arms about Apple's cut as the retailer. How much of a cut do you think Barnes & Noble makes on a book they sell in their store? Google charges developers 30% to sell their wares in the Android Market. Yet Apple seems to be the only one getting hate for participating in the longstanding tradition (and proven business) of retail markup.
But it is about the point of entry or "Store" that entices the sale from the customer for the publisher/writer. No less profit is taken when you buy your Maytag Appliance from Lowes. Lowes get a nice profit margin (dealer cost versus retail) that would all have been Maytag's profit if you bought it at a Maytag store (which they have). Amazon still makes money off the sale of a book via an iPad, but Apple is (fairly) saying, the writer/publisher would not have sold that book were it not for gaining a customer via the iPad. You should remember, Amazon is not the Author/publisher of the book. Everyone makes it sound like Apple is taking from poor Amazon, who just finished writing their first novel and offering it for sale. If Stephen King sells one of his books to an iPad owner via the Kindle App, how is it wrong for the physical "Store" through which the purchase was really enticed, the iPad, to require a significant share of the retailer/wholesaler split.
Possibly, but that would probably stifle inovation on the platform.
App developers really may flock away from iOS to other platforms. Publishers, by contrast, are selling a product every week or every month and are used to paying percentages out to people.
That magazine you're reading had to pay a printer, a delivery truck, and yes, the grocery store takes a cut as well.
They're trading all of that in for a single payment to Apple + the cost of their own servers. That stuff costs a lot of money, but so did printing. So that's possibly an easy deal for them to make. It may even work out better for them! (I'm not positive, but I consider it very possible. Seems like everyone is ignoring that factor.)
But how does that work for Skype? What are they saving? It's not such a great deal for them if they had to pay Apple to be in the App store.
So it's really a totally different situation. Charging developers for free apps may chase them away. Charging publishers probably won't scare them.
That's the difference.
Everyone keeps throwing "marketing" around. Apple doesn't launch a marketing campaign for something you drop in the App store. It markets itself as a company.
It doesn't matter how much publicity is gained if they lose money off the sale. By Apple taking 30% it's possible for Amazon to actually lose money on some Kindle sales.
Amazon's two options would be to pull the Kindle app, or to raise prices across the board since Apple requires similar pricing.
I also say this might end in courts for Apple, especially if they are selective in enforcing the rules. When enforced equally it means Netflix, Kindle, Hulu, Sirius XM, Pandora, Slacker, Last.FM, Napster, Rdio, or any other streaming service has to offer an option to allow billing via iTunes. If Apple enforces the rules equally for all applications you can say goodbye to a great many of them. If Apple does not enforce equally then the companies will bring Apple to court to figure out why.
In the end, the consumer loses.
And how do you define 'non-iOS capable subscriptions'? Would a web-only subscription, which excludes any smartphone-app based access be disallowed by Apple if it costs less?
Publishers could simply de-bundle all their offers. Part one: web access, part two: iOS access, part three: Android access, part four: Kindle access.
Exactly, HOWEVER! Sending Apple a .app file and having them host it costs a lot less tha paying a printer, paying fed ex, and paying Albertsons. The old fashioned way probably was 30% of the value. With the App store if Apple took 20% I'd say hey thats pretty damn fair. Apple is trying to get the same margins companies are paying now, but with less over head. I just don't see how anyone can really defend it. Two big businesses trying to rip each other off all it does is hurts the consumers.
The problem with all this "in app" purchase stuff is that so far as I know, you lose it once you transition to a different iOS device...making it a terrible idea to spend money that way.
I certainly lost my upgraded copy of Docs to Go when I had to switch iPods... So not doing that again.
I certainly lost my upgraded copy of Docs to Go when I had to switch iPods... So not doing that again.
Reality 101, money makes the word go around.
Without capital Apple which spends how much of their profits on R&D, how would they be able to keep it going. Apple can do the things they do because they do have capital. Or maybe we should give it all to Microsoft
I am sure some here would like that. If publisher feel its not warranted they will pull out but mostly they will not mostly because like so many other mediums it has to evolve. A little behind but it makes the point.
PS: AAPL spent a total of $4.6 billion over the last four years. Revenue in 2006 was $25 billion. In 2009, sales climbed to $43 billion. Its market cap, has tripled over the since the start of 2006.
In contrast, Microsoft (MSFT) used $31 billion on research over the same period. Revenue rose from $44 to $58 billion.
Apple know how to leverage what people want, the consumer, business on the other hand just like Apple want as much money as possible even if they sell just one widget; if the magazines don't like it they can make their own ecosystem and get full profit now they just have to sell their plastic wares to the masses.
If the purchaser wanted to buy the book from Apple they would have used iBooks. They bought it from Amazon in the Apple shopping centre. Do malls usually have a 30% cut of everything that is sold in them?
This will just clear the air of distorted distribution model that is almost taking place. It will force publishers (content creators) to distribute directly through App Store, instead of distributing through another distributor (Amazon, for example) wich in turn will take advantage of the App Store to distribute instead of using it's own means. Let's not forget that Amazon (again, an example) is not a publisher, so why to have two distributors to deliver the content? I found ludicrous the business model that gives the business to one distributor (Netflix, for example), while using Apple infrastructure. Any publisher (not distributor) should be happy to use App Store to distribute it's content and to pay 30% for this.
Apple is fine for demanding this - it's their platform. However, they shouldn't be demanding that the content providers offer an equal (or better) price for what's sold via the App Store. If Amazon, Netflix, or whatever want to their in-app prices to be 30% higher, then they should be able to do this.
Customers pay higher prices for more convenience, so it's logical it the in-app purchase button should be offer a product that has a higher price. This is how normal business works. The price of milk is usually higher at the corner gas station than the supermarket on the other side of town. Leave it to the customers to decide how much they are willing to pay. Since the iPad caters to ther lowest common denominator, I sure there will be millions that just opt to hit the in-app purchase button not knowing any better.
Customers pay higher prices for more convenience, so it's logical it the in-app purchase button should be offer a product that has a higher price. This is how normal business works. The price of milk is usually higher at the corner gas station than the supermarket on the other side of town. Leave it to the customers to decide how much they are willing to pay. Since the iPad caters to ther lowest common denominator, I sure there will be millions that just opt to hit the in-app purchase button not knowing any better.