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Apple's App Store Subscription Policies Raise Antitrust Issues as Content Providers F

kerryb said:
It seems that content providers have already ruled out all the the iPad killers coming from Samsung, Dell, etc... I'm sure those companies will offer a better price as soon as they get their "iTunes killers" in place. Content providers can pass on Apple's demands if they feel they are too high. The iOS is not the only way to distribute content available, web browsers and print still remain options. Yes the future will eventually make the tablet or should I say Pad the best outlet but we are not there yet.
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I read a blog that basically argued this was a sneaky way to get publishers to move their content to HTML5. The argument was basically that SI (I think?) was able to create an HTML5 web-version of their magazine that very closely replicated the feeling of an app. If providers want 100% of the pofits, they can publish to the web and control the payment. On top of that, ANY tablet (or web browser) would have access.
 
It does seem a bit of a douche-bag move by Apple: I don't have a problem with in-app subscriptions and Apple keeping 30% of that. However, I do have a problem with it being mandatory if you offer subscriptions by other means, and preventing linking to alternative subscription methods from within the App.

Yes, it's Apple's store and Apple's rules but if content providers withdraw then Apple will lose market share to competitors.


For example, Spotify is one of the things I use the most on my iPhone: If it becomes no longer available on iOS then my next phone won't be an iPhone. Much as I love my iPhone and iPad, if they don't do the things I want, or give me access to killer content that I enjoy, then I will use a device that does.
 
Phil A. said:
It does seem a bit of a douche-bag move by Apple: I don't have a problem with in-app subscriptions and Apple keeping 30% of that. However, I do have a problem with it being mandatory if you offer subscriptions by other means, and preventing linking to alternative subscription methods from within the App.

Yes, it's Apple's store and Apple's rules but if content providers withdraw then Apple will lose market share to competitors.


For example, Spotify is one of the things I use the most on my iPhone: If it becomes no longer available on iOS then my next phone won't be an iPhone. Much as I love my iPhone and iPad, if they don't do the things I want, or give me access to killer content that I enjoy, then I will use a device that does.
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I agree with everything you've said.
 
GeekLawyer said:
The more I read, the less I like it. I was fine with the outcome for content providers like Amazon.

But if this touches providers like Netflix and Hulu+, then I have concerns.
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I read an article last night that stated that Amazon would lose money on every book they sold through their iOS apps. No way they're going to accept that. The article guessed that Amazon would rather remove the ability to buy books through the app altogether and simply make it a reader.
 
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)

I think this will only affect apps that have been or want to offer the ability to purchase or subscribe within the app. To my knowledge Netflix and Pandora can simply make their app a subscriber-only app (meaning you must already be a subscriber, or you need to sign up via traditional means, i.e. On the web).

Apple is merely saying if you are going to explicitly solicit subs within the app - then in the words of Robert DeNiro from Goodfellas - "pay me my money"
 
Well, keep in mind two dynamics at work here:

1. Publishers know this is the dawn of a new method of distribution, so the rules are being set in stone now. They saw what happened with iTunes and the music publishers and they realize that once rules are in place, they rarely change much. So it's in the publishers best interest to cry poverty now and to rant and rave and threaten legal action, etc. It's all part of a show designed to set negotiations in place. It's not personal, merely a business tactic. The same thing you see when lawyers talk to the media about their client -- it's all extreme this, and awful that about the other side. Just propaganda designed to get public opinion on their side.

2. There is a lot of media that loves to paint Apple as a bad guy. Sometimes this ideology at work, sometimes it's in their economic interest to make Apple look bad, whatever. So any time anyone says anything bad about Apple, anything at all, these media types predictably get the vapors about Apple and write columns bemoaning how evil Apple is. Doesn't matter if it makes no sense, someone said something bad about Apple so now it's time for the Apple-scandal-of-the-month.

We don't know all the details about how these business deals normally work in the publishing world. Ignore #1 because the publishers have a vested interest to make themselves look hurt. Ignore #2 because those media sources are idiots. Just wait for the facts to fully come out -- then judge at that time. Don't be led astray by propaganda.
 
I have a sneaking suspicion that services like Netflix, in which you do not buy iPad/iPhone access, but simply gain it as a free benefit of being a customer of theirs, might be able to skirt this issue.

Same goes for Amazon, where Kindle books are readable on your computer, on your phone, and in your device as well.

If Apple doesn't flex a little bit for this, they are going to kill the goose that laid the golden egg. Some of the very best apps are apps that have razor-thin margins and provide content to the device. If Netflix has to raise their streaming price for everyone so that they can make a profit on their iPhone customers (the App Store price CANNOT be more expensive than their website price), then you will likely see them abandon the platform.
 
All eyes are of course also on the content providers themselves, who would have to raise prices by 43% in order to provide Apple with a 30% cut and still maintain their existing income, should all transactions shift to in-app subscriptions.
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These are the kind of empty arguments prompting people to scream "antitrust".
Raise what prices? On what? Compared to what distribution and collection method?

The App Store eliminates a lot of publisher costs. Sure, it incurs others. If it doesn't work for you don't sell there. What is has to do with antitrust is not clear at all.
 
I feel you can argue this point a few ways, but I personally feel that Apple is overstepping their power here.

Apple's perspective is along the lines of: we provided the hardware, created a huge market and are now providing a payment infrastructure; therefore, we deserve a piece of the action since the publishers wouldn't even have this market if we (Apple) didn't create it.

Of course, the publishers feel that they've created the content and their own consumer market. Why should Apple get a cut at all? This is our business - not Apple's.

Frankly, I tend to side with the publishers on this one. While it's a symbiotic relationship, I can't see that Apple should be entitled to such a huge "finder's fee" (plus processing charge for recurring billing) for bringing in new subscribers. I think this is going to cause content publishers to leave the platform or find another way to work around the restriction.

In Amazon's case for the Kindle app, Apple is saying that any books they sell online must have a corresponding store to access within the application for IAP (and Apple's 30% cut). It's just not going to happen. The only thing I can see happening is that Amazon will remove the option to buy books from the app altogether. People will have to go to Amazon's site and buy the book from the website (which you have to do already) and just send the book to your iOS Kindle app.

Actually, if I extend Apple's logic for driving subscriptions further...should Apple feel entitled to take a cut of the action for any app that allows consumers to shop someone's web site? I mean, Apple's device drove the consumer to the site, right (thinking of the Amazon shopping app, eBay, etc)?!

Apple's approach on this one is just too draconian for my taste. Nothing good will come from this.

:(

--DotComCTO
 
CrystalPepsi said:
June 30 is about when I'll be upgrading to iphone 5. If we lose one or two of the big names from the appstore such as Amazon (Kindle), Netflix, Pandora, etc., I may have to reconsider my upgrade. Yikes.
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Its not gonna happen...You will be right there in line with the rest of us buying an Iphone 5. If these content providers jump ship.....they jump to nothing....sure there is android...but android market place does not make money...microsoft store is a joke too. The content provider will still make money off the app store...just 30 percent less money....that is better than no money. A 150 million IOS users is a big cash pot.
 
Apparently Google is going to announce their version of in-app purchases and make it a 90%/10% split. The article I read said it was planned to be announced in the near future but they may push that up to as early as to day to capitalize on the negative feedback.
 
Centient said:
I'm actually in a similar predicament right now. After a grueling and ultimately insulting several hours wasted yesterday with AT&T, we're leaving them and were planning on going to VZ for the iPhones. However many of the services I use through iOS are tied into companies that may or may not wish to continue to operate in the iOS ecosystem come June 30.

I'd love some clarity from Apple on exactly how and who will be effected by this. It could very well determine whether we move onto another OS in the coming days.
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Nor are they able to set a lower price for that subscription so that a) they get both your info and b) 100% of the revenue from the subscription. If you don't trust company X, then you can pay Apple instead with just your password, but it'll cost you more. That's the cost of convenience.

The key point here is that based on the rule that the price in-app must be the same price on a publisher's website, it starts affecting everyone, even if you don't use an iOS device. And I'm pretty sure if that's not illegal, it's definitely still grounds worth suing over.

Or to make an analogy here, Wal-Mart sells TVs. Wal-Mart doesn't want a TV manufacturer to sell TVs for cheaper to Amazon so Wal-Mart demands that it gets the same price that Amazon gets. It also throws the TV maker a bone and says "you can sell your stuff cheaper in our store compared to Amazon though". I don't think anyone would really like that scenario.
 
Popeye206 said:
I wish people would get off the 30% is soooo much kick. It's not. Get a clue, retailers and any distribution channel makes money when distributing and selling products and 30% is very common and fair.

But... the part that Apple will or should change is the part about having to offer the in-App price at the same or lower price. This is the part that publishers don't like and the anti-trust part as it's controlling prices.

If Apple changed that part, all would be good and let the buyer make up their mind as to where to buy.
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I agree 100% that there are problems with the in-app subscription/purchase model as it stands now. Besides what you mentioned, and a poster further up mentioned Apple taking a 30% cut of in-app purchases as well, which I also object to, there are other problems with the system. For example, there really ought to be an option in iOS to require a password for EVERY purchase, whether in-app or not.
 
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If they don't like then they can take their business else where. No one is forcing them to do business in the App Store. Apple has every right do run their business how they want to as would I if I owned a business. There are too many folks out there that want something for nothing.
 
Joker Eh said:
And Apple has said

That to me is choice and consumers should be given choice and Apple is providing that.

Personally I like going through the App Store this way I can say no to providing my contact information to the publisher.

I would never buy the apps I buy on my Mac, iPhone, iPad if not for the App Stores, so why shouldn't Apple benefit from this to further develop the stores and services.

I side with Apple on this one.
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I agree with you 100 percent and most IOS users are in this boat.
 
DotComCTO said:
I feel you can argue this point a few ways, but I personally feel that Apple is overstepping their power here.

Apple's perspective is along the lines of: we provided the hardware, created a huge market and are now providing a payment infrastructure; therefore, we deserve a piece of the action since the publishers wouldn't even have this market if we (Apple) didn't create it.

Of course, the publishers feel that they've created the content and their own consumer market. Why should Apple get a cut at all? This is our business - not Apple's.

Frankly, I tend to side with the publishers on this one. While it's a symbiotic relationship, I can't see that Apple should be entitled to such a huge "finder's fee" (plus processing charge for recurring billing) for bringing in new subscribers. I think this is going to cause content publishers to leave the platform or find another way to work around the restriction.

In Amazon's case for the Kindle app, Apple is saying that any books they sell online must have a corresponding store to access within the application for IAP (and Apple's 30% cut). It's just not going to happen. The only thing I can see happening is that Amazon will remove the option to buy books from the app altogether. People will have to go to Amazon's site and buy the book from the website (which you have to do already) and just send the book to your iOS Kindle app.

Actually, if I extend Apple's logic for driving subscriptions further...should Apple feel entitled to take a cut of the action for any app that allows consumers to shop someone's web site? I mean, Apple's device drove the consumer to the site, right (thinking of the Amazon shopping app, eBay, etc)?!

Apple's approach on this one is just too draconian for my taste. Nothing good will come from this.

:(

--DotComCTO
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Even this isn't allowed. If you sell something on your website, you must sell it in the app.
 
Can content providers advertise a not-so-secret secret promo code (without giving links) to give people a 30% discount while purchasing from their website?

For example:

In the iOS app, display a notification that reads "Pay here at full price. Alternatively, go to our website to purchase the same content. Type in 'FxxxAPPLE' upon checkout and get 30% off!"
 
The real problem I have here is that iOS is a platform, not just a delivery mechanism.

What if Microsoft claimed that anyone selling software for Windows 7 was required to pay 30% of their revenue to them?

iOS and iTunes need to be looked at differently. Unfortunately, Apple has built a world where the ONLY way to get software installed on their platform is through iTunes.

IMO, iOS = operating system. If you demand 30% for everything that comes from iTunes, that's fine, but then you must also provide an alternative for people to install software by alternative legitimate means.
 
nyctravis said:
I think the 30% cut is quite heavy. But in terms of anti-trust, I'm confused. Apple still allows them to obtain subscriptions on their own and keep 100% of revenues, they are just saying they also have to offer the option via the AppStore. But with allowing developers their own pathway it seems to that Apple isn't forcing anyone to use the AppStore so I'm not sure how this is anti-trust. I'm sure I'm missing something, though, and someone can enlighten me.
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Exactly. I can still go pay for Netflix monthly service on their website and charge my credit card, and nothing has changed as I have to do that now.

Publishers have choices, they didn't have devices like iPhone and iPad a few years ago and if it were not for Apple they wouldn't be making the money they do now. You think Angry Birds is making a movie if not for the iPhone and iOS, not.

If a magazine publisher now goes to sell on iOS don't you think it has saved them money from not printing each issue on glossy paper, so who should benefit from that?
 
I'm OK moving to Android if Kindle and Netflix are forced off the iPhone.

I'll decide in June when the next iPhone comes out.

Steve can't be stupid enough to force people off of the platform. Android is getting too much momentum as it is.

But if he is that stupid, I'll switch.

I assume they'll work it all out by June.
 
Zero!sOne said:
The point is that subscribing through Apple to have one bill for multiple different services is infinitely easier to the consumer than handling that many different subscriptions separately. A large number of subscribers will probably switch to the easier-to-them model, which means services like Rhapsody and Netflix have to adjust their pre-existing pricing model to accommodate this loss in revenue.

If service providers were allowed to offer better deals on their own websites, the "100% revenue" comment would be useful. As it is with Apple's current rules, however, they can't.
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I would think one option would be to have a different--and higher--price for services rendered if you also want to have the service on your IOS device. Same price on web as within IOS but still higher than if you don't want the IOS option. Then the customer can decide if the extra fee is worth it.
 
I can see both sides, and ultimately I think Apple is being a bit too greedy. This will either ultimately lead to increased prices, or devs leaving apple.

What Apple should do is compromise. Either a) lower their percent cut. Maybe down to 15%, I think that would be reasonable OR b) make the revenue share temporary. Like, Apple gets 30% of the revenue for the first 6 months of every subscription purchased through the App store. That way Apple still gets its cut for bringing the subscriber, but it is up to the dev through good service to keep the customer for more than 6 months, therefore the dev should take over full credit for the revenue.

I think option b makes the most sense. This way Apple gets their money and devs would be happy to bite the bullet for 6 months if it means a greater subscription base
 
chrono1081 said:
As much as I love Apple I do have to agree with the Anti-trust.
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I don't how anti-trust could even be considered. Every survey out there indicates that the Android platform now dominates the smartphone market. There are literally dozens of Android tablets coming on the market as we speak. Developers are perfectly free to leave the iOS world if they so choose. I don't see Apple dominating any market in terms of iOS, now or in the future. Even the majority of experts quoted in this article don't see an anti-trust issue.

Just because you don't like what Apple is doing doesn't mean it's illegal. Apple HAS dominated the digital music distribution market for years now and no one is screaming very loudly about it. If developers don't like handing over 30% to Apple they are free to leave and go elsewhere. there are plenty of options for developers outside of the Apple ecosystem.

Why scream ANTI-TRUST/MONOPOLY every time Apple makes a business decision that irks developers and users? It just ain't so.
 
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