I want to ask Steve what it feels like to eat his own words. Again. The old man is losing it I think.
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Apple Reverses Course On In-App Subscriptions
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Websites don't have to provide free content. There is nothing about websites that obligates anyone to make the content on them free.
However, Websites bring the added advantage of being standard and platform agnostic. Thus you reach a much wider audience. More apps that are simply informational and require a connection should just be dropped and remade as websites.
The sales aren't there because the publishers have horrible pricing for digital subscriptions. Personally, I think it needs to be in the $10 a year range to be successful. Right now... it's cheaper to get the printed subscription in most cases.
I kinda wish there was a standard magazine format. That way I could just buy magazines, instead of entire apps. I could then use whatever reader I want. I guess Zinio is the closest thing to that at this point. Same goes for comics. Comixology seems to be the best, but of course Dark Horse has their own app. So do a few others.
The apps are almost always free. 30% of free is nothing. Would you rather Apple force out all the free apps?
You keep bringing this up. Just because Apple offered a service for free (or just for $99) does not mean it has to offer every other additional service at cost. There are many businesses that offer low price for the entry level service, but charge more, a lot more, for additional features. It is the whole ecosystem that they are offering to developers or media companies. How the prices are broken down for each subset is up to Apple.
App descriptions are a billboard provided as part of the App Store. Feel free to leave that page blank.
Learn the definition of monopoly. Apple does not even have the largest market share in smartphones. You cannot define a specific products offered by a specific company as a distinct market.
There are a lot of factors at play. Pricing is just one. The medium is new and will experience growing pains.
There are those that assume digital media is cheaper because there's no physical distribution or printing costs. That's not necessarily true. And that explanation would take a lot more space.
You have to also remember that many people wouldn't be "happy" with the equivalent of the magazine in electronic form. The UI experience needs to be different.
Time, resources, and other factors all come into play with creating a new revenue stream like e-magazines. Which is why there IS such an issue with pricing and perceived value by the consumer.
Given that the print industry is already hurting - they would likely see e-publishing as a means to better solvency - and therefor are more likely to not want to "give away the farm" for cheap. But if they keep the price model high - the buy in will be low.
It's a tricky game - and again - will go through growing pains until it can either be economical for the publishers;when consumers understand and accept that physical media and electronic media are two completely different things and experiences/conveniences; or when one media wins out and "destroys" the other so there's no basis of comparison.
I may be the only one who doesn't like this change. I don't plan to buy any subscriptions outside of the App Store so that publishers can sell my data to advertisers and I'm also not paying a significantly higher price for the version purchased through iTunes. I'd rather go to the free sites and get my news through content aggregators like the Huffington Post. This is the reason why the publishing industry is such a disaster.
The publishers can make a major push towards Android all they like but there has to be an Android tablet that will sell well first. The last thing I heard about Android tablets is that they're cutting production by 10% and their expectations weren't high to start.
The publishers can make a major push towards Android all they like but there has to be an Android tablet that will sell well first. The last thing I heard about Android tablets is that they're cutting production by 10% and their expectations weren't high to start.
Likening Apple to merely a payment processor is an apples and oranges comparison.
They created the market, they bring the customers, they give you the tools to create the apps (essentially for free), they spend many millions promoting the app store and the devices they run on. You are getting the sales because of them.
How does that compare to a merchant bank that does nothing more than process the credit card payment? It would be like saying that the Walmart corporation should not be taking any more of a cut of the revenue of the company than a clerk who runs the cash register.
This was probably one of those Apple ideas that looked good in concept--until all of the issues and their ramifications were looked at--so good move Apple to make this slight course correction. 
Called this a while ago. I'm far from the only person who did, but there were naysayers.
I believe that Apple may try to change the policy down the road if Google cannot make serious competitors in the tablet space (I love Android tablets and it pains me to say it, but they're not caught up yet...). Dominance tends to do that. Competition leads to the best consumer experience.
Someone has to eat the costs. Like with credit cards (it's nice to have rules saying no minimum purchase, but the interchange costs have to be passed on - and if you're not making them up, someone paying with another payment method is).
I'd find it hard to believe they'd just round it up 30% for the iTunes version. There's going to be some credit card processing costs (lower for them), and they won't sell the data, but it is essentially a convenient referral method (attention in app store/in app purchasing making impulse buys anywhere easy). They may up the price slightly, but a full 30% would likely be noticed by a lot of consumers.
Allowing the use of external subscriptions but prohibiting linking to the signups for them is perfectly reasonable.
People have an expectation of free content because of the web and the wide market has lead to a problem: People are willing to put costly content out for free (even if supplemented with ads, covering costs is difficult) because of the growth potential. The NYT has struggled with this, as have plenty of news sources.
The reality is that the editing quality of a magazine is far higher than your typical blog. That's not to say blogs don't have appealing features (discussions with others, typically more up to date, a more personal writing style, etc.), but it's a different target. For technology geeks (i.e. people that would post on a technology forum and discuss news ), freshness of content is critical.
A lot of people like the compact page-by-page nature of a magazine, the periodic publication of a bunch of content.
I predict Android tablets will make major inroads once Google gets Android Ice cream sandwich out the door. Problem is, that's a risky bet - Honeycomb was supposed to be the holy grail of Android tablets, and that didn't happen. However, the open nature of Android is bound to lead to great growth - I don't think it's a market Apple will dominate forever. Apple will hold a profitable place among the top players, but I don't think they'll maintain the lead. And that'll be fine.
I believe that Apple may try to change the policy down the road if Google cannot make serious competitors in the tablet space (I love Android tablets and it pains me to say it, but they're not caught up yet...). Dominance tends to do that. Competition leads to the best consumer experience.
Someone has to eat the costs. Like with credit cards (it's nice to have rules saying no minimum purchase, but the interchange costs have to be passed on - and if you're not making them up, someone paying with another payment method is).
I'd find it hard to believe they'd just round it up 30% for the iTunes version. There's going to be some credit card processing costs (lower for them), and they won't sell the data, but it is essentially a convenient referral method (attention in app store/in app purchasing making impulse buys anywhere easy). They may up the price slightly, but a full 30% would likely be noticed by a lot of consumers.
Allowing the use of external subscriptions but prohibiting linking to the signups for them is perfectly reasonable.
People have an expectation of free content because of the web and the wide market has lead to a problem: People are willing to put costly content out for free (even if supplemented with ads, covering costs is difficult) because of the growth potential. The NYT has struggled with this, as have plenty of news sources.
The reality is that the editing quality of a magazine is far higher than your typical blog. That's not to say blogs don't have appealing features (discussions with others, typically more up to date, a more personal writing style, etc.), but it's a different target. For technology geeks (i.e. people that would post on a technology forum and discuss news
), freshness of content is critical.A lot of people like the compact page-by-page nature of a magazine, the periodic publication of a bunch of content.
I predict Android tablets will make major inroads once Google gets Android Ice cream sandwich out the door. Problem is, that's a risky bet - Honeycomb was supposed to be the holy grail of Android tablets, and that didn't happen. However, the open nature of Android is bound to lead to great growth - I don't think it's a market Apple will dominate forever. Apple will hold a profitable place among the top players, but I don't think they'll maintain the lead. And that'll be fine.
Apple is not even a payment processor
They still rely on visa/mastercard and paypal to move the money. Apple is just a tax man collecting tax on everyone passing his gate.
They still rely on visa/mastercard and paypal to move the money. Apple is just a tax man collecting tax on everyone passing his gate.
merchant banks do not process credit card payment, Visa and mastercard do, and together they bare risk of fraud, and the banks also bare risk of credit loss. By taking the credit cards, Walmart and other merchant can boost their sales and avoid the pain handling a large quantity of cash at the end of every day.
On the other hand, the invention of iPad will not increase the readership of FT or WSJ, although their readers now have another way of reading the newspaper. Apple does not market for FT and WSJ and bring new readers to FT and WSJ, the high quality content of the newspaper does. Without all content available, iPad is nothing but a toy.
Many good point.
While you have to shut down their electronic device during taking off and landing, newspaper printed on pieces of paper has no such problem.
Agreed. And I'll still hit BUY. For me, the convenience of having a digital book to be used in iBooks to keep all of my reading material together is worth the surcharge. I don't want 50% of my books HERE and 20% of it HERE and 5% HERE, etc. I want it all in one app if at all possible and it's worth it to me to pay a little more for that convenience. If Amazon had DRM on their music and had to be played in another app or on other non-Apple devices, I'd never buy, no matter how cheap. Even a 99¢ Album (Gaga) would be passed up. I just want my stuff in as few places as possible and I'm willing to pay for that.
People call Apple a Walled Garden. First they forget that everybody else in way or another has propriety stuff to keep people "locked in" so it's a little silly to make it seem like Apple is the only company that builds Walls. Secondly, if it's a Walled Garden, so be it. I am amazed at how great it is and that it keeps better all the time. I also realize that no one has a gun to my head and I can leave for green pastures the moment I want to. So far, the grass is greener in Cupertino, and has been for some time.
Stop with the 30% already
I wish people would stop making such a big deal out of the 30% cut. Those who do obviously have little or no business sense.
If I made a product and a distributor said they would provide:
1. Placement in a store visited by millions of people every day from all over the world
2. With millions of already registered and proven customers from all over the world
3. With purchase devices (iPhones, Macs, etc.) already owned by millions of people from all over the world
3. With no worries about credit card approval or fraud
4. That can be purchased with gift cards that are available nearly everywhere, from corner convenience store to mall department stores
5. That provided full and excellent sales tech support
6. Where I could set my own price
7. Where I could upsell features (In-app purchasing) to increase income
8. That required me to manufacture (and pay for) not one physical item
And wanted only 30% of the net, I would say, "Where do I sign" not "let me think about it."
Do people really think that, if they buy software (or whatever) in a Best Buy (for example) for $100 that the entire $100 goes to the software company? Best Buy most likely purchased that software for less than 50% of the sales price. So Best Buy is taking their 50%, and rightfully so, and people complain about Apple's 30%? Get off the soapbox. Your griping doesn't make any sense at all. Do you have any idea as to the value of what Apple is offering? It's enormous.
Sure, you can make 100% off of a website sale, but deduct server hosting fees and lines (you're not selling this with your home computer and a cable modem), sales tech support, credit card fees, credit card fraud, website development costs, maintenance and repair, advertising, advertising, advertising to reach as many people as Apple does (if that's even possible), plus time and effort, and a host of other unseen costs associated with online sales, and you're not much further ahead, if at all.
I wish people would stop making such a big deal out of the 30% cut. Those who do obviously have little or no business sense.
If I made a product and a distributor said they would provide:
1. Placement in a store visited by millions of people every day from all over the world
2. With millions of already registered and proven customers from all over the world
3. With purchase devices (iPhones, Macs, etc.) already owned by millions of people from all over the world
3. With no worries about credit card approval or fraud
4. That can be purchased with gift cards that are available nearly everywhere, from corner convenience store to mall department stores
5. That provided full and excellent sales tech support
6. Where I could set my own price
7. Where I could upsell features (In-app purchasing) to increase income
8. That required me to manufacture (and pay for) not one physical item
And wanted only 30% of the net, I would say, "Where do I sign" not "let me think about it."
Do people really think that, if they buy software (or whatever) in a Best Buy (for example) for $100 that the entire $100 goes to the software company? Best Buy most likely purchased that software for less than 50% of the sales price. So Best Buy is taking their 50%, and rightfully so, and people complain about Apple's 30%? Get off the soapbox. Your griping doesn't make any sense at all. Do you have any idea as to the value of what Apple is offering? It's enormous.
Sure, you can make 100% off of a website sale, but deduct server hosting fees and lines (you're not selling this with your home computer and a cable modem), sales tech support, credit card fees, credit card fraud, website development costs, maintenance and repair, advertising, advertising, advertising to reach as many people as Apple does (if that's even possible), plus time and effort, and a host of other unseen costs associated with online sales, and you're not much further ahead, if at all.
Hello? Earth to noob. The article is about publishers, not software makers. Publishers already have the infrastructure you mention as they use it for the 80% of the market that is non-iOS such as computers, Android, web, etc...
Next time, read the article before typing out a thesis based on something completely unrelated. LOL.
Makes Sense
I was wondering when Apple would wake up. The model they proposed made some sense for App upgrades, and possibly for periodical subscriptions. However, for streaming media, and books, where publishers are locked into complex licensing agreements with razor-thin margins in brutally competitive markets, the 30% Apple tariff and "most-favored" price leveling rules would be a NIGHTMARE. Many providers, Netflix and Hulu come to mind were seriously reconsidering their participation on the iOS platform. The Financial Times decided to go it on the outside as a web app. The NY Times response to digital subscriptions is still out to the jury... I expect they're likely to ... evolve it. Hope so, since I like Paul Krugman and David Pogue.
If Apple persisted in pushing a model that hoovered all the profit and then some out of a provider's enterprize, they would be well off pulling out. It's almost the exact opposite of the advantage the app store provides developers.
I was wondering when Apple would wake up. The model they proposed made some sense for App upgrades, and possibly for periodical subscriptions. However, for streaming media, and books, where publishers are locked into complex licensing agreements with razor-thin margins in brutally competitive markets, the 30% Apple tariff and "most-favored" price leveling rules would be a NIGHTMARE. Many providers, Netflix and Hulu come to mind were seriously reconsidering their participation on the iOS platform. The Financial Times decided to go it on the outside as a web app. The NY Times response to digital subscriptions is still out to the jury... I expect they're likely to ... evolve it. Hope so, since I like Paul Krugman and David Pogue.
If Apple persisted in pushing a model that hoovered all the profit and then some out of a provider's enterprize, they would be well off pulling out. It's almost the exact opposite of the advantage the app store provides developers.
I don't think you have much business sense. But that's besides the point. The comment most are making has nothing to do with the software purchase. It's the additional content in which Apple is raking in 30 percent per transaction.
And if you think that your laundry list of items is no longer a worry for the vendor - you're wrong. They still have to worry about all of that.
But you're very passionate
That isn't my point. Apple should definitely charge for the IAP/IAS payment processing service they offer. I just think 30% is astronomical compared to what other players in the field are charging.
That is why I'm happy Apple relented and is now going to let the market decide if they are too expensive or not.
Not in the case of IAP/IAS. This is what we're talking about. For those services, Apple is only a payment processor.
Hello? Earth to noob. The article is about publishers, not software makers. Publishers already have the infrastructure you mention as they use it for the 80% of the market that is non-iOS such as computers, Android, web, etc...
Next time, read the article before typing out a thesis based on something completely unrelated. LOL.
EXACTLY. Addressed in general in my own post. Some folks are not looking at the entire picture. While Apple fully means to be disruptive, and change the game in many sectors, it's not in their best interest to break TOO many things their audience wants too dang quickly.
If Apple is a walled Garden, they sure spend a lot of time, energy and resources on gardening and landscaping. The grass is mowed, the hedges trimmed, lots or really pretty flowers, and the fertilizer is mostly(!) non-toxic. Even the walls are shiny.
Carry on.
I don't think you have much business sense. But that's besides the point. The comment most are making has nothing to do with the software purchase. It's the additional content in which Apple is raking in 30 percent per transaction.
And if you think that your laundry list of items is no longer a worry for the vendor - you're wrong. They still have to worry about all of that.
But you're very passionate
The other poster is way more right than wrong. Apple provides a distribution channel.... be it from iTunes or in an App. They deserve to take a cut.
Again... seems as though there are a lot of non-sales and marketing people making comments about the 30% when it's obvious they have no clue as to how distribution works or the value of what Apple brings to the table and why they are justified in their cut.
Here's an analogy that maybe some of you can relate too. On-line referral sales. The way it works is a customer visits site A. See's an offer for a product from company B... they click and buy and Company A gets a cut. Sometimes small, sometimes a big cut. Apple has defined that cut as 30% across the board.
It all comes down to the consumer. If they buy a subscription from Newstand, or an in-App purchase, Apple will get their 30%. The publisher can price it as they feel right. If the customer wants to shop around and find a better deal, they can do that too.
Prices, margins and policies will all find their level as all this new channel settles down.
Indeed, you should educate yourself.... Apple doesn't own the goods or services it charges 30% for, neither does Apple host the files. As a result, Apple doesn't sell those goods or services, the suppliers of those goods or services do.
Sorry... I not trying to be rude, but it's obvious that there way too many people here who don't have any channel sales, or product marketing experience.
Oh Popeye! Don't make assumptions about the readership here. At least not about me. I have over 20 years in Marketing and PR. I'm well aware of how it all works. Especially since 8 of those years were in publishing.
Indeed GoodWatch. And no one is saying Apple can't "try" to charge whatever they want. Fact is - they tried. And failed. So they changed their model to adapt to tolerances of the vendors. Nothing wrong with that. Business try and make money. And if the methods they use aren't working - the smart ones change. The ones that don't fail.