Pandora - don't think as many people use it as you think
Hulu - ha, no one pays for Hulu plus
Netflix - the company even said they don't see an increase because of mobile devices
Kindle - this one might hurt a bit but barely.
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Apple's App Store Subscription Policies Raise Antitrust Issues as Content Providers F
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Pandora - don't think as many people use it as you think
Hulu - ha, no one pays for Hulu plus
Netflix - the company even said they don't see an increase because of mobile devices
Kindle - this one might hurt a bit but barely.
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I understand why some are upset about this and to a point I agree with them.
However, Apple has created an online digital distribution system that works and works where many others have failed. Now as to the 30% cut, that's does seem a little bit too much.
But I would point to Murdoch's new The Daily. When News International were working with Apple creating it I can't believe they weren't aware of Apple plans as regard to subscription costs. They would have known about the 30% plan. Murdoch is a man who would sell the eyes of his children if it gave him an advantage. If he thinks that's even with giving Apple it's cut it can make a profit and save paper, printing and distribution costs then it's something he's going to do.
As to the idea of this being anti-trust, others have already pointed out that alternatives are available but their ill concieved and some flat out don't work. This isn't Apples fault. Ultimately the Market will decide. Developers can pull away from the Apple Eco-system should they choose to. But the convenience, ease of use and most importantly 160 million iOS users with registered credit and debit cards is frankly Apple's trump card.
I understand why some are upset about this and to a point I agree with them.
However, Apple has created an online digital distribution system that works and works where many others have failed. Now as to the 30% cut, that's does seem a little bit too much.
But I would point to Murdoch's new The Daily. When News International were working with Apple creating it I can't believe they weren't aware of Apple plans as regard to subscription costs. They would have known about the 30% plan. Murdoch is a man who would sell the eyes of his children if it gave him an advantage. If he thinks that's even with giving Apple it's cut it can make a profit and save paper, printing and distribution costs then it's something he's going to do.
As to the idea of this being anti-trust, others have already pointed out that alternatives are available but their ill concieved and some flat out don't work. This isn't Apples fault. Ultimately the Market will decide. Developers can pull away from the Apple Eco-system should they choose to. But the convenience, ease of use and most importantly 160 million iOS users with registered credit and debit cards is frankly Apple's trump card.
whether this is true in your case or not I don't know... but isn't it also possible that for some people the ability to stream netflix, pandora etc is the reason they bought the ipad, apple tv etc in the first place? so just as apple is bringing these companies customers it can also be argued the other way around. And I'm half joking and half just trying to make a point by saying this but why not have links on for example Netflix to buy an ipad or apple tv and netflix then gets 30% for bringing apple a customer? Isn't it the same ridiculous idea?
I think apple should have different costs for different types of subscriptions. One for direct content owners ie magazine subscriptions and another for service providers ie netflix, amazon etc. For the first, they are more so distributing, not sure if they are hosting the actual content, but they are more so offering the "service" to access that content. Where as the latter they are more so acting in the same mannor as a credit card company so they should get less. And for the argument of them bringing more "eyes" to netflix don't you think visa, mastercard, etc bring more customers as well? a lot of people wouldn't make purchases if not for credit cards.
They will all leave if they are all as ignorant of basic business principles as most of the people who seem to post in these threads.
If they can make money they will. Right now they are making lots of money. Most of them will try hard to make it work because being in the IOS ecosystem is very valuable to them in a lot of ways.
People and companies pay for things that have value. That is how it works.
While getting something of extreme value for free is nice and never to be turned down, it is rare it stays that way forever.
Now you see that's your problem right there! People trying to help Apple 'justify' this new rule of 30%. And it's bull crap. Just what have Apple got to pay for? Someone to check the app, then somewhere to host it, that's pretty much it. NOTHING else!!
Your iTunes data is stored anyway and Apple keep that so it's a cost that's assumed. But there are no physical shops, no technical support, no upgrades, no work at all really that Apple has to do as the developer does it all, yet it takes the so called 'standard' 30%, yes from every sale of every app which is fine, but to then ALSO now take 30% from everything brought from within the app (Again think of games) then I have a problem, all Apple are doing is registering the sale, charing your iTunes account and so your bank account and then passing the charge onto the developer and I have NO doubts at all that Apple ensure they get interest on investing that entire sales cost before passing the money onto the developer. How often does a developer get the money from Apple? Once a week or month? The rest of that time it's earning interest for someone..
It's just laughable to compare the App store to something more physical like growing food it really is. An entirely different industry with entirely different and massive over heads.
Like I said, it will be VERY interesting to see just what the big names do with this.
It goes both ways. Companies only "have" to raise their prices 43% if all of their revenue comes in via the app store. If most of their revenue already bypasses Apple, and they can still make a profit on each sale then they don't have to raise prices at all to still make more money that without Apple.
Losing a large distributor, regardless of how much of your business they are is a big deal. I don't imagine that Costco was a major part of Coke's market, but they sure acted quickly to get back in the stores after a one month absence. http://www.ajc.com/business/coke-returns-to-costco-236727.html
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Like I said earlier. Then let the companies host apps themselves to remove the massive amount of infrastructure required to download a small app. Second, billing is already taking care of by the companies in question. There was zero billing cost to Apple until recently when they are forcing themselves into the billing equation. This is Apple greed pure and simple and wanting a 30% cut is really just tacked on. Apple is trying to see how much they can extort out of the content providers, and to not see that is entirely ignorant.
Actually Visa and Mastercard have deals where they provide promotions and such with specific retailers who offer their products at a great discount for the exposure they are provided by Visa and Mastercard. Although people continue to misrepresent how credit cards work... so the example you provide is not really on point.
But to bring up credit cards, that is one of the things Apple provides. They eat all the credit card charges, they have to handle all the costs for managing chargebacks, disputes and other issues. These are not free things that don't take time and money for any company to manage. All of these has a significant value, that the companies don't have to pay for those who use the IOS payment system.
You're right. It's 42.85% just tacked on.
Visa and Mastercard Paypal manage to do all that stuff with a 2-4% fee or less. Be clear, Apple doesn't have to duplicate all the storage/streaming, etc. They are FORCING Amazon to have a separate billing system for in-app billing, when Amazon just wanted it to be completely off of Apple's plate. Amazon doesn't use 30% of each sale to handle the financial transaction and billing paperwork.
Apple isn't going to start hosting netflix movies for streaming, or storing kindle books for download...they aren't incurring any significant costs.
The 30% thing comes from their original deals with the iTMS and 99 cent song downloads.
Labels accepted that because in many ways, it was cheaper than any other option for them. Apple hosted the files, and did all of the conversion/marketing/etc.
You'd be surprised. Costco and Sams Club sell a lot of product to small businesses such as Liquor Stores, Vendors, etc.
Ditto. I'm an Apple user and shareholder. As a shareholder, I love the stock price going up. As a user, I find Apple money grubbing little weasels trying to squeeze every penny from it's customers.
Yes any stink that Amazon might make would be the pot calling the kettle black. Amazon is far worse. In fact before iBooks came along, Amazon took more than 30% per book sold and they had to adjust their terms to keep publishers from flocking to Apple.
What Apple is doing here is simple:
A free app is free to view content you subscribed for elsewhere, but cannot offer an in-app purchase for content without giving 30% to Apple.
This means that Netflix can continue to offer a Netflix viewer, Amazon can continue to offer a Kindle Reader, but if these apps offer the ability to purchase subscriptions or content, they need to make one of the methods of purchase be the in-app purchase model.
Those affected the most by this are Apple's direct competitors who have been free-loading off the Apple ecosystem -- especially those that received the majority of purchases through their iOS apps.
Personally, I would like to see the number of subscribers that Rhapsody added after they released an iOS app. Remember that it was iOS that made Pandora so popular (by admission of their own CEO at an Apple event).
Right now Amazon offers a free app which costs money for Apple to host. Then Amazon sells books through their free app and keeps all the money for themselves. Apple incurs cost of providing the app to Amazon's customers and then incurs the cost of enabling a competitor to iBooks where Apple is trying to sell their own books.
So in short, this seems good for the consumer in that you can easily buy something without sharing your credit card or any other information and you can manage all your subscriptions and purchases in one place. It is bad for the customer if the service you grew to love is one of these free-loading direct-competitors who decides to pull their app -- but then again, if the majority of their customers are coming from iOS then pulling their own app would be like shooting themselves in the foot. I think Apple knows that.
Apple should get a regulator ruling on the issue.
There are two primary complaints about Apple's market strategy, and that's exactly what it is.
1. Walled garden
This is what makes it possible for Apple to invest considerable capital from its own pocket to offer servers, hardware devices, R&D, and features and benefits other suppliers simply do not offer in a way attractive to end users as strongly as Apple. It needs to recapture and service that capital and to do so it insists that activity within its "walled garden" happen with a cut of the action on revenue. Fair.
2. Digital Rights management
This decision made possible the iPod music ecosystem and despite strong whining by many factions and interests, it proved to work in practice. The same principal as applied to other content such as movies, TV episodes, books, newspapers and other items will also work. In practice.
People making comparisons of price alone are entirely disregarding the delivery costs. Newspapers and magazines often operate on gross margins of 3-10%. Yes I said that right. 3%. That is because of the high cost of paper, printing, physical delivery of all that paper and printing, and the associated supply chain costs.
Apple made it possible to deliver the product in a different way, but the same product to the same people, and frankly more who previously did not have access due to limitations of geography of physical copies. It wants to be compensated for it.
The rights holders are now getting 70% net not 03% net!
Rocketman
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NO! Are you crazy. Apple will probably hoard the cash or buy some small start up that is making awesome products, slap an Apple Logo on it, Steve will call it magic, and all the lemmings will call Steve a Genius.
Well thats a bit far but, I don't think the 30% will do anything on dropping prices. If anything it will help build the infrastructure that is the App Store and iOS which in turn could spell the end of OSX as we know it.
I downloaded Rhapsody to check and see. Sure enough it offered to help me sign up a subscription.
I edited my post a minute later to include it but this thread is moving fast so...
Apple Press Release said:
There you have it. Apple wants 30% of all subscription services that run through iOS.
The only semi-loophole that a couple people on this forum have been pointing out is that Netflix could possibly keep its streaming service at $8.99, but not include access to the iOS apps. For $12.99, they could include streaming to iOS devices. Apple would take their $3.90 cut for doing nothing.
As still other have alluded, hopefully all the content companies will band together and make investments in the jailbreak community. Jailbreak Netflix app right through Cydia that would let you run your $8.99 normal netflix subscription on your iPhone. Probably won't happen, there have been a lot of major apps rejected from the app store, and the only example of something like this happening that I've seen has been grooveshark.
Yes, but those folks could just as well have found another distributor if continuing to resell Coke was important to them.
There are also a lot of iOS devices out there looking for content.
If content providers remove themselves from iOS others may step in to fill the void. e.g. as mentioned earlier if Sports Illustrated leaves, ESPN The Mag (owned by Disney, whose largest shareholder happens to be Steve Jobs) might actually benefit from their absence by being the only choice in front of those eyeballs...
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It's completely different! Print ads are more valuable than digital ads, so they still make more money off physical paper!
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From APPLE'S press release: "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.
From what I'm reading here.. it's not optional. You have to have an in-app subscription model thus forking over 30% of your revenue.
True. Google has already stepped up. Looks like they are going to play this all the way to the bank. Either way I think the public called Apple on this. Now its up to Apple. Will they do the whole we don't need you we are Apple thing or will they submit. I think Apple actually has set themselves up in a good position to say fine we will reduce the rate to 15%.
That kind of goes along with my point, i just didn't elaborate on it. My point being that Visa and Mastercard provide companies a lot of exposure and yet they still only charge a fraction of the percentage apple wants to charge. Sure Netflix and Kindle and whatever could offer special deals for in app purchases to thank apple for the exposure but that's a little different than apple demanding it upfront. And I'm not saying Apple shouldn't get anything for handling the charges ie if they eat the credit card charge, disputes etc but i'm thinking more along the lines of 5-10%. Again that's just for service provider apps. If apples is distributing the content or handling the service end I don't think the 30% is far off.