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

[Squeak825]

Textbook publisher publishes to HTML with small standard HTML code extension.
Publisher signs with google for 10% (and has option to advertise and deal with payment systems elsewhere too.)
Google handles marketplace, payments, subs.

The Ipad has a browser and can reach google. Its just standard tech, and it never touches the app store.

http://googleblog.blogspot.com/2011/02/simple-way-for-publishers-to-manage.html

Textbook publishers could do that right now, without the need for Google. They already have their own authentication mechanisms for websites.

But, it limits the textbooks to being HTML-based.

My point was this policy of Apple's severely limits publishers abilities to create a native app that provides for a higher-level of interactivity.

For example, an Algebra program like this:

http://mindshift.kqed.org/2011/01/algebra-meet-the-ipad-a-year-long-study-explores-learning/

Publishers traditionally cannot allow end customers to purchase that in-app (cannot afford the 30% haircut), so they removes their ability to charge for it out-of-app.

 

[lilo777]

Sorry, that's simply not true. It is not difficult to code a website to play H.264 video (which the app uses).

The real reason is that the app generates way more eyeballs. When was the last time you hear about any news about a mobile website? Yet, an app gets attention.

All 350K of them? Netflix, YouTube and so on are all popular web sites on their own. Existence of app adds nothing to their business. It's just a temporary stage of mobile tech development. Compare the two scenarios:

* We have 1 million web sites that provide content. For that to work, we need 1 million (simplifying here) creative people to do the content
* We have 1 million applications that provide content. We need 1 million creative people and 1 million programmers to keep this thing going. Stupid, inefficient with no real benefits to users. Also, users need to learn 1 million interfaces.

 

[cote32mt]

Against 30% subscription commission

As an owner of Apple products since the Mac IIsi and a shareholder almost as long, this news is a real slap in the face to "independently" thinking computer users. I can't imagine where Apple thinks it is going with this obscenely outrageous surcharge.

 

[pundit]

About the netflix blocking android thing:

Some android browsers can spoof the user agent. Wouldn't this allow netflix to work?

I've seen some youtube demos of jailbroken solutions, yup, but I haven't verified that it can be done myself.

Textbook publishers could do that right now, without the need for Google. They already have their own authentication mechanisms for websites.

But, it limits the textbooks to being HTML-based.

My point was this policy of Apple's severely limits publishers abilities to create a native app that provides for a higher-level of interactivity.

As for being able to do it now... the google solution provides a globally recognised market place (you'd have to live under a rock to not be aware of google,) and will handle both authentication and a vast variety of subscription, ala carte and try before you buy options... all in a package deal.

Although a small publisher may be able to do a bespoke payment and authentication system, they don't have the reach of google.

Regarding the tech stuff; HTML is tres versatile... even without flash. If you can print it, you can render it... and you can make it interactive too (the google mail/chat site is a good example.)

For more technical applications, you'll see HTML frameworks spring up to fulfill demand.

 

[johnqh]

Cloud based yes, but not necessarily internet based. Theoretically for something like a campus you might license the content on a server, so you never need to leave the campus WAN.

And you cannot go to an off-campus cafe to study. Does that make sense to you?

As for being able to do it now... the google solution provides a globally recognised market place (you'd have to live under a rock to not be aware of google,) and will handle both authentication and a vast variety of subscription, ala carte and try before you buy options... all in a package deal.

Although a small publisher may be able to do a bespoke payment and authentication system, they don't have the reach of google.

Regarding the tech stuff; HTML is tres versatile... even without flash. If you can print it, you can render it... and you can make it interactive too (the google mail/chat site is a good example.)

For more technical applications, you'll see HTML frameworks spring up to fulfill demand.

For textbooks, why does anyone need the reach of Google? The students don't get to decide which books to buy.

 

[macaroo2]

Hrm.....

For the record, I'm uneasy about this move on Apple's part. It will alienate a lot of developers who will start looking at WP7/Android/WebOS as their primary platform to develop for.

That said an easy workaround to this issue is to just turn off all purchases in an iOS app. Put the readers on the iOS devices but sync the content using 3rd party software/cloud.

As for print subscriptions, just don't do subscriptions. Sell it per issue like at newsstands. Apple's 30% cut comes out of the higher price per issue over subscriptions, publishers save money on printing, distribution, newsstand profit cut.

Ultimately the print/audio/movie industries should just build their own digital distribution systems. Something like the kindle app but with social APIs.
Hook into all the popular payment systems - Paypal, etc - and allow the netizens to open digital storefronts selling their content for a small cut, say 10% of every purchase. Be device agnostic.

So easy in theory. Why does it seem so hard in practice I wonder?

 

[pundit]

And you cannot go to an off-campus cafe to study. Does that make sense to you?

Google Docs has an offline feature.. that they are redoing in HTML5 later in the year. I don't know if plans for One Pass include something similar. My magic 8 ball is broken.

 

[Rodimus Prime]

And you cannot go to an off-campus cafe to study. Does that make sense to you?

tell you the truth you could. It would just require you setting up a VPN back to campus. I know multiple colleges that require you to that to use some software installed on ones computer. You either need to be on the college's network or VPN back to the the network. It is not hard to only have certain programs route threw the VPN. I had to do that for my email to work one university I was at. I told outlook to go threw a VPN for that one account and it solved all the problems. I know others who have VPN set up so they could get autocad to work. not that hard to set one up and the university did supply some very nice step by step instructions with pictures.

 

[pundit]

For textbooks, why does anyone need the reach of Google? The students don't get to decide which books to buy.

Good point, although having a single source is always better than multiple sources... which google would provide here.

 

[rolphi]

Why are we reacting to this like they are a sports team or your local government or a charity?

Apple is a corporation. They do not represent you. They do not owe you anything. You are not on their team.

Greed and arrogance are terms used to describe human personalities not businesses. For Apple or any for-profit business, doing things that seem like greed and arrogance are just business decisions. If they work are result in profit, then they stay. If they don't work, they change. If the mistakes are serious enough, they go out of business.

But never would it occur to them to take less profits for fear of "arrogance". Want to know why K-Mart tanked? Because another company called Walmart was more greedy and more arrogant and ate their lunch.

I know some people would like to believe we live in a world where people care about how nice the companies that make our stuff are to each other, but that is not the case. In this world, the market is pretty good at deciding winners and losers.

When half your apps go bye bye on your iPad, let's see how much of a fan boy you are then.

I don't recall Apple saying they would delete apps from anyone's iPad.

And Google made it's own phone to... hey, to launch a whole new platform and echo system. Yeah, that's working out so poorly for them isn't it? Considering based on numbers alone by this time next year Android will have more apps and users than Apple.

And Google sells Android for how much per copy? Oh right, they give it away for free. And yet they still consider this a success? Is this altruism? Are they the white knight to Apple's black hearted arrogance?

Or do they know that the real value is in the personal information that they gather about you and sell to advertisers? And the real value is in the personal information that the companies who sell you apps gather about you and sell to advertisers? And the real value is in the personal information that the newspaper publishers and magazine publishers gather about you and sell to advertisers?

I think it just shows that people are willing to sell their privacy very cheaply. That is a devil they have dealt with for so long now, it doesn't seem so bad a deal. At least that's what the publishers, and the news sites, and the bloggers, and the developers, and Netflix, Hulu, Amazon, and all want very desperately for you to continue to believe. They make BILLIONS that way. But at least they're not arrogant, I guess.

This is exactly what got Apple in trouble with the PC market years ago.

No it's not. I would explain why, but since you're asserting facts without evidence, I can too. Also, anti-trust and anti-competitiveness all depend on how you define the pertinent market. If we are to believe the anti-Apple folks, they soon will be in the minority position in every market you might apply, so all of those arguments are moot too. Also, being a really good competitor is not anti-competitive.

So am I a fanboy or a troll? Probably both.

Bottom line: companies in this world are going to do things to try and make money. If they sell something you want, buy it. If they don't sell something you want, but some other company does, buy from the other company. Everything else will sort it self out.

 

[marksman]

All 350K of them? Netflix, YouTube and so on are all popular web sites on their own. Existence of app adds nothing to their business. It's just a temporary stage of mobile tech development. Compare the two scenarios:

* We have 1 million web sites that provide content. For that to work, we need 1 million (simplifying here) creative people to do the content
* We have 1 million applications that provide content. We need 1 million creative people and 1 million programmers to keep this thing going. Stupid, inefficient with no real benefits to users. Also, users need to learn 1 million interfaces.

LOL. Me thinks you don't understand web site development.

 

[pundit]

tell you the truth you could. It would just require you setting up a VPN back to campus. I know multiple colleges that require you to that to use some software installed on ones computer. You either need to be on the college's network or VPN back to the the network. It is not hard to only have certain programs route threw the VPN. I had to do that for my email to work one university I was at. I told outlook to go threw a VPN for that one account and it solved all the problems. I know others who have VPN set up so they could get autocad to work. not that hard to set one up and the university did supply some very nice step by step instructions with pictures.

My wife's work set up a VPN for her PCAnywhere so she could work from home. They didn't know (enough) about security, so rather than using PCA into the dog-slow POS at her work desk, I just had her use word/excel to access the network shares natively.... completely seemless.

Also I loved the citrix installs I dealt with. Nothing quite like a program executing in a completely different state, but appearing to be local.

 

[rolphi]

As an owner of Apple products since the Mac IIsi and a shareholder almost as long, this news is a real slap in the face to "independently" thinking computer users. I can't imagine where Apple thinks it is going with this obscenely outrageous surcharge.

I don't mean to pick on a person with such Apple credentials such as yours, but I have to know: do you really examine what percentage each middle-man takes in every good or service you buy? Really?

How then, if I wish to be an "idependently" thinking computer user, am I supposed to feel about the 100% markup that Best Buy takes on USB cables?

And the shipping company that brought my headphones from China added about 10% to the cost. What should their take have been? Can we debate that? What seems reasonable?

I'm not sure that is yet obscenely outrageous. Is that only when we get to 30%?

And a barrel of crude oil costs $85/barrel but gasoline is $126/barrel. I'm not sure if it's the refiner or the pipeline company to be mad at about that one. Any help?

 

[pundit]

*SNIP*
How then, if I wish to be an "idependently" thinking computer user, am I supposed to feel about the 100% markup that Best Buy takes on USB cables?
*SNIP*

Don't dare criticize Best Buy cables. They are THE BEST!

http://reviews.bestbuy.com/3545/126...ting&suppressscroll=true&showcomments=3569793

 

[rolphi]

It's asking or it's telling?

It's saying to Amazon. No, it's TELLING Amazon. If you price a book at $10 in your iOS app, we Apple are telling you, you are not allowed to sell this same book for less, your book, on your web site, for less.

How on earth can that ever be right?

This happens all the time. BOSE headsets are the same price at Walmart, Best Buy, the Apple Store, in catalogs, in BOSE stores, on websites, etc.

Think this is a huge coincidence?

In this game, you get to tell other companies what to do if you think you can get away with it. It's called leverage.

But since Amazon is free to walk away and has MANY other options for selling their goods, it is not illegal, nor particualrly unusual, nor wrong, that these two for-profit giant multi-national corporations are going to try and get a better deal from each other.

The surprising thing is that anyone might have a personal opinion about it.

i think the point is its ok for apple to charge 30% when its providing something similiar to amazon for example in iBooks. It's not ok for apple to charge 30% for being the "credit card" used to purchase a good through Amazon's service. there's a difference.

That sounds reasonable. When is the election where we get to vote on this?

 

[ThisIsNotMe]

People are idiots.

What do you think the markup on Windows 7 is at Best Buy compared to what Best Buy pays for it.

Hell, Windows 7 Pro is $299 at Best Buy yet Amazon sells the same product for $259 or 15% right there and they are still making money.

30% is nothing for the work that Apple does.

 

[Deliverator007]

This happens all the time. BOSE headsets are the same price at Walmart, Best Buy, the Apple Store, in catalogs, in BOSE stores, on websites, etc.

Think this is a huge coincidence?

In this game, you get to tell other companies what to do if you think you can get away with it. It's called leverage.

But since Amazon is free to walk away and has MANY other options for selling their goods, it is not illegal, nor particualrly unusual, nor wrong, that these two for-profit giant multi-national corporations are going to try and get a better deal from each other.

The surprising thing is that anyone might have a personal opinion about it.

You are confusing vertical price fixing and horizontal price fixing. Bose headsets are the same price because the manufacturer requires this of its retailers, so the retailers don't undercut each other. This is generally ok. What Apple is doing may be closer to horizontal price fixing, which is multiple retailers agreeing not to undercut one another's prices, to maintain both of their profit margins. Horizontal price fixing is an antitrust violation.

That sounds reasonable. When is the election where we get to vote on this?

We get to vote every time that we are faced with a decision to purchase an iOS device or a competing device.

 

[pundit]

People are idiots.

What do you think the markup on Windows 7 is at Best Buy compared to what Best Buy pays for it.

Hell, Windows 7 Pro is $299 at Best Buy yet Amazon sells the same product for $259 or 15% right there and they are still making money.

30% is nothing for the work that Apple does.

Directly comparing Bricks and Mortar vs Online Pricing? Fail.

 

[Deliverator007]

People are idiots.

What do you think the markup on Windows 7 is at Best Buy compared to what Best Buy pays for it.

Hell, Windows 7 Pro is $299 at Best Buy yet Amazon sells the same product for $259 or 15% right there and they are still making money.

30% is nothing for the work that Apple does.

If you are willing to pay 43% more for your content for the "work" that you believe that Apple does, then have at it. In my opinion, they got paid for their work when I gave them $600 for my iPad, and I am not willing to pay a 43% surcharge for me to access content on that iPad, just because Apple has now decided that they want more.

 

[saxamoophone]

People are idiots.

What do you think the markup on Windows 7 is at Best Buy compared to what Best Buy pays for it.

Hell, Windows 7 Pro is $299 at Best Buy yet Amazon sells the same product for $259 or 15% right there and they are still making money.

30% is nothing for the work that Apple does.

So how do I download applications from Amazon for my iPhone?

Is the only "choice" I have the OS?

Why are these portable computers locked? I already paid Apple for my phone!!!

 

[bmastudent]

For the record, I'm uneasy about this move on Apple's part. It will alienate a lot of developers who will start looking at WP7/Android/WebOS as their primary platform to develop for.

That said an easy workaround to this issue is to just turn off all purchases in an iOS app. Put the readers on the iOS devices but sync the content using 3rd party software/cloud.

As for print subscriptions, just don't do subscriptions. Sell it per issue like at newsstands. Apple's 30% cut comes out of the higher price per issue over subscriptions, publishers save money on printing, distribution, newsstand profit cut.

Ultimately the print/audio/movie industries should just build their own digital distribution systems. Something like the kindle app but with social APIs.
Hook into all the popular payment systems - Paypal, etc - and allow the netizens to open digital storefronts selling their content for a small cut, say 10% of every purchase. Be device agnostic.

So easy in theory. Why does it seem so hard in practice I wonder?

Hard in practice because Apple ultimately decides what apps you can and cannot install on your device.

 

[rolphi]

The problem is, potentially it's very bad for the consumer, you and me.

Say I sell my item via Apple and it's $10 on my web site to buy some in app data.
I can't do this anymore as I have to allow the data to be sold in app. Meaning Apple with want a 30% cut.

I know everyone wants to paint the future scenarios with their own bias, but what about the parts that, potentially, are very good for the consumer, you and me?

It sounds like in your scenario, your app+data is the whole product, but you sell if for free (and pay Apple $0) to distribute it in the App Store. Then you charge $10 to make the app useful from your website and again pay Apple $0.

And now I'm supposed to think you're in it for the consumer?

As a consumer, I now have to have a business relationship with you, give you my credit card information, and likely my email address to create an account, and be subjected to advertisements from you or from whomever you sold my email address to.

And I have the pleasant experience of thinking I was getting a free app, but then getting slapped by a $10 charge to make it useful.

The case here isn't so black and white.

 

[cav23j]

If you are willing to pay 43% more for your content for the "work" that you believe that Apple does, then have at it. In my opinion, they got paid for their work when I gave them $600 for my iPad, and I am not willing to pay a 43% surcharge for me to access content on that iPad, just because Apple has now decided that they want more.

the $600 for your iPad is small compared to the amount of money they spent on developing and manufacturing it

They're all suing everyone, and none of them end up going far. Even Apple is being sued.

Patent law needs to be modified to better suit modern technology but that's another issue for another thread.

except this time Oracle actually has a case

 

[pundit]

the $600 for your iPad is small compared to the amount of money they spent on developing it and manufacturing it

Yes. Its a shame they only sold 1.

 

[aristotle]

Some people in the industry have commented anonymously and pointed out that a lot of publications end up sending 120% of subscription revenue on cold calling, spam and junk mail advertising their dead tree editions along with distribution (mailing) costs. The only thing that saves them is the advertising revenue.

So 30% on subscriptions where there is no mailing costs or need to do direct marketing means that they get to keep a significant portion of that 70% for themselves and still get advertising revenue is actually a good deal. The publishers are just being greedy.

Not only can the more than break even before advertising revenue is factored in but the iOS specific versions can be created to have targeted dynamic advertising based on the reader's profile.

Amazon is currently charging 30% for subscriptions on the kindle hardware for newspapers and magazines and they are not even dynamic. They are just static graphical versions of the dead tree editions whereas Apple is offering a platform that can provide interactive content and advertisements.