Apple Reverses Course On In-App Subscriptions

[tatonka]

Looks like Apple takes care of everyone...
Still people bitch.

But good thing, Apple has realised this sooner than later.

Apple did not take of anyone before all that bitching storm broke loose and they probably got told a few not that pleasent things behind closed doors by the great publishing houses.

That whole thing was just a step to far .. good Apple was forced to realize that, before more damage to the plattform was done.

T.

 

[kdarling]

Apple doesn't make money decisions based on "it's the right thing".

From jobs I've been offered, publishers are planning a major move into Android.

Without outside pressure, Apple would keep iOS as tightly controlled as possible.

 

[haravikk]

Hmm, while it's good they've decided not to be so strict about it, I can't help but think that it would be better if they simply didn't take such a big cut of in-app subscriptions, as these are long-term anyway so such a high percentage doesn't seem especially reasonable.

 

[OllyW]

On the other hand, anyone who buys something in-app once and later finds out that you charged them 43% more will feel totally ripped off and is not likely to buy anything through your app ever again. More likely to give your app a minus five star rating (or the lowest rating possible) on the store before uninstalling it.

Easy to solve, tell them before they buy it.

As you click to subscribe they should be able to inform you that the in-app purchase includes a surcharge to cover Apple's charges and let you know it is available at the normal price elsewhere.

 

[Torrijos]

So you people want Apple to forfeit their cut of this market, they have created, while maintaining the store servers, software, APIs, billings, paying for the data transfers etc.?
And they should maintain the same level of excellence while not receiving a penny, right?
The app dev, the movie and music producers, the editors profiting of the reputation and stability of the store, of the tools Apple provide while never having to pay anything.

Somehow I feel it wouldn't be such a great business model, if you wanted to turn a profit from time to time.

 

[Stella]

So you people want Apple to forfeit their cut of this market, they have created, while maintaining the store servers, software, APIs, billings, paying for the data transfers etc.?
And they should maintain the same level of excellence while not receiving a penny, right?
The app dev, the movie and music producers, the editors profiting of the reputation and stability of the store, of the tools Apple provide while never having to pay anything.

Somehow I feel it wouldn't be such a great business model, if you wanted to turn a profit from time to time.

In App subscriptions was a failure. Do you want Apple to continue down this dead end road without changing anything? The free market spoke, they weren't interested in giving Apple a 30% cut.. its up to Apple to adapt and learn.

Having 3rd party content without a guaranteed 30% cut is better than no content at all. Having content will attract customers to iOS. See KDarlings quote above to see what may have happened if Apple didn't change things. Is this what you want?

 

[Bernard SG]

In App subscriptions was a failure.

Source?

 

[KnightWRX]

So you people want Apple to forfeit their cut of this market, they have created, while maintaining the store servers, software, APIs, billings, paying for the data transfers etc.?

Apple doesn't transfer subscription content. They don't host it, nor store it either. For the in-app subscription and in-app purchase, all Apple does is cover billing. If you're going to go on this wild emotional "Apple is a victim!" tangeant, at least get the facts straight.

Apple is a payment processor. They are charging 30% to process a payment and you are left on your own with : Server storage, content transfer, account management, marketing, etc...

That's one hefty payment charge, even Visa and Mastercard don't charge that much to process payments.

And they should maintain the same level of excellence while not receiving a penny, right?

Who said not receiving a penny ? They should simply charge reasonable rates for payment processing. What's the industry going rate for that ? Under 5% ? Do they even do percentage based transactions or is it fixed charges ? Charge that. You still get money for processing the payment and maybe a few more devs will embrace your service.

These new rules at least let the service stand on its own in the market. You now at least have a choice of payment processors for your in-app subscription stuff. Will it be Apple at 30% or Visa at 5% or a fixed rate payment processor ?

 

[marksman]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8G4 Safari/6533.18.5)

Content providers are now also free to charge whatever price they wish. For example, they could offer in-app subscriptions with a 30% premium to cover Apple's usual cut for In-App Subscription payments.

43% premium, not 30%. Apple take 30% of the in-app price. So if an item is selling outside the app for $1, it would need to sell at $1.43 inside the app to return the same $1 to the developer. (30% of $1.43 = $0.43)

Wrong. Duplicate costs are involved.

 

[iSee]

Yay!

Good move Apple -- well, actually first a very bad move but then finally the correct move.

I was going to leave the iOS universe if Apple kicked my ebooks (Amazon Kindle) off the platform.

Still it's been bad business all around. The Financial Times had to waste its time and money developing the HTML5 app. Who knows how many other content providers and developers likewise wasted time trying to deal with this?

 

[OllyW]

Wrong. Duplicate costs are involved.

No, they are spot on with their figures.

 

[designedbyapple]

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)

First: I think this decision will be good for the market
Second: I want to thank Jordan for writing in a more 'macrumors' style. I didn't even think to check till the end who the author was and I was pleasantly surprised to see that it was Jordan. I enjoyed reading the article and it felt just like reading any other on macrumors!

 

[Madmic23]

I'm glad that Apple realized how stupid this policy was. The Fiancial Times was a good example of what developers would have done to avoid these ridiculous charges. I can just imagine Amazn being forced to create a "Kindle web app" to be compliant with the original rules set to take effect at the end of the month.

 

[ericinboston]

I have to say, it's been very obvious to me for quite some time that the iPad is just not the e-reader (books and mags) that Apple has been touting for 1.5 years. I've noticed the tv commercials stressing e-reading are gone or altered, there is no news/hoopla about mags and books at any Apple events, and then a few topics like this where Apple quietly reverses course.

Apple, sooner or later, will learn that the My Way Or The Highway approach will rarely win business. Additionally, IMO, reading any content for longer than 20 minutes on the iPad 1 and 2 is a strain on the eyes...while the Kindle is beautiful. Emails or a quick website article?...sure. But actually sitting and reading text for long periods of time like you do with a physical mag or newspaper just is not great on the iPad....Apple will have to address this if Apple truly wants the iPad to be an e-reader.

 

[kyeblue]

FT wins

Apple needs content providers more than content providers need them. You can't push around big weight like FT and WSJ as you did to small fish and tadpoles. Reluctant to change to send readers of FT and WSJ into the arms of RIM and Android.

 

[newagemac]

Yay! Now they get to charge us higher prices on our mobile devices! Big win for consumers!

/sarcasm

 

[jimboutilier]

Good news.

It will still be a little less convenient not to have BUY links inside apps like Kindle or Zinio, but at least it will not impact the availability or pricing of the content I choose to enjoy from the vendors I choose to get it from.

Frankly, had Apple persisted in its misguided efforts I would have left the iOS platform I dumped my iPhone in favor of an Android phone to get away from AT&T, and I was already shopping Android tablets to replace my iPAD had Apples proposed subscription policy impacted my content.

Given Apples attempt at this, I have little confidence they won't try something similar in the future, so I may still go with another platform, but at least now I have more time to decide.

 

[Jcoz]

Apple doesn't make money decisions based on "it's the right thing".

From jobs I've been offered, publishers are planning a major move into Android.

Without outside pressure, Apple would keep iOS as tightly controlled as possible.

I agree.

Still it's not like Publishers bringing magazines to Android tablets is the only thing holding those things back.

They could have went, but it was still largely an empty threat considering it absolutely would have been a losing proposition on their part in the short term.

But good for them for threatening and good for apple that they didn't stick to their guns just because the threat had no teeth short term.

I've seen Apple stand behind decisions with a WHOLE lot more tangible reasons not to than this situation.

 

[samcraig]

On the other hand, anyone who buys something in-app once and later finds out that you charged them 43% more will feel totally ripped off and is not likely to buy anything through your app ever again.\

I didn't see anything that prevents the app developer from WARNING the customer that buying the app externally SAVES them XX vs buying in-app. In fact - if anything it could increase sales as people like the perceived notion they are getting a deal.

Apple doesn't make money decisions based on "it's the right thing".

From jobs I've been offered, publishers are planning a major move into Android.

Without outside pressure, Apple would keep iOS as tightly controlled as possible.

Exactly kdarling - and this is why you are one of the most level headed and respected (by at LEAST me) poster on these forums.

 

[Sora]

43% premium, not 30%. Apple take 30% of the in-app price. So if an item is selling outside the app for $1, it would need to sell at $1.43 inside the app to return the same $1 to the developer. (30% of $1.43 = $0.43)

With this said, will it be enough to keep developers happy? Will the Financial Times return? And most importantly, will consumers respond by closing their wallets?

 

[ChazUK]

Far better.

 

[MacObsessed]

While I think that it was a bad move to begin with, I also think that Apple's change of heart is proof that the free market works. Ever since their original decision was made, some people have been crying out for regulators to get involved and force Apple to change its policy, in its own proprietary store. Again it was a seemingly unfair, anti-competitive, and counterproductive decision from the beginning, but this is the way these things should be resolved: customers and content providers became angry and threatened to take business elsewhere (after-all, Android has always been an option), and Apple saw the potential harm in staying the course, so they changed the policy without outside intervention.

 

[Stella]

Source?

Your source is in front of you in iTunes and this article. How many companies offered in app subscription purchases, especially large media companies such as the FT? Not many.

If in app-subscriptions was a success Apple would not be relaxing the rules.

 

[The Phazer]

While I think that it was a bad move to begin with, I also think that Apple's change of heart is proof that the free market works. Ever since their original decision was made, some people have been crying out for regulators to get involved and force Apple to change its policy, in its own proprietary store. Again it was a seemingly unfair, anti-competitive, and counterproductive decision from the beginning, but this is the way these things should be resolved: customers and content providers became angry and threatened to take business elsewhere (after-all, Android has always been an option), and Apple saw the potential harm in staying the course, so they changed the policy without outside intervention.

IMO the threat of regulatory action is unquestionably why Apple have rowed back.

Phazer

 

[supmango]

This is closer to being what publishers need. I find it interesting that Apple still refuses to let there be a way to access content on the device outside of the in-app purchasing mechanism. What Apple really needs to do is reduce the cut it takes. Then publishers might actually be able to make it work.

This is the same issue that most developers have with the Mac App store. The cut is too great on the more well established apps. If you have a good app, you spent too much time on it to allow a 30% cut.

People will still use the in-app purchase over the web, many times simply because they don't realize they have the option, or that the web price might actually be cheaper. Apple is banking on this. So in the end, if you are ignorant of your options, you are screwed and Apple wins. We will have to see how publishers respond.