It makes sense. Why shouldn't the content providers pay some form of fee?
They are instantly getting easy access to over 130 million potential buyers (not counting in the newly opened desktop App Store).
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Apple's App Store Subscription Policies Raise Antitrust Issues as Content Providers F
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It makes sense. Why shouldn't the content providers pay some form of fee?
They are instantly getting easy access to over 130 million potential buyers (not counting in the newly opened desktop App Store).
They are closing the loophole on free apps that sell subscriptions/services. Apple doesn't make one dime on an app like Kindle that is very popular, makes money for Amazon, and Apple is paying all the app distribution costs to let Amazon do it.
That's the problem Apple faces here and is trying to address.
Right, because the incremental costs of delivering a 10MB app are JUST like the incremental costs of streaming a dozen movies in HD......can I have some of whatever you're smoking?
Wrong again, largely because you missed the concept. The boxes are stored, shipped, and delivered from the same warehouse, by the same provider. Apple does not take possession and responsibility for the content/boxes at ANY TIME. It's more like "hey we delivered a catalog for you, so you have to give us a cut of all their future orders". The only kind of business that works that way is a protection racket.
What I would like to see is arguably the three biggest content delivery platforms (Kindle, Netflix and Hulu Plus) pull their apps from the store. These services were already extremely popular before the iPad.
I'm sure a lot of people will go to Honeycomb and the like cuz their favourite services don't work anymore.
That would change everything again, magically.
I'm sure a lot of people will go to Honeycomb and the like cuz their favourite services don't work anymore.
That would change everything again, magically.
I think it's a poor decision. I agree that content providers should pay something to Apple for the platform, but 30% on top of what they already pay for copyrights, staff, author's salaries, and whoever else gets a slice of the pie is either going to result in higher prices for the consumer or unsustainable subscriptions. It's not like a small software shop where the IP is basically self-contained.
How can Amazon, for example, pay publishers and distributors for the books, pay authors their royalty share, and pay 30% to Apple and still come out ahead? It doesn't seem possible, and if they raise their iPad prices to compensate, the current price of the basic Kindle is low enough that consumers would just buy that instead. OTOH, if Amazon raises ALL their prices, it will kill their e-book business.
They will either have to make a special deal with Apple or withdraw from the iPad, it seems to me, and the latter is not a good result for consumers.
How can Amazon, for example, pay publishers and distributors for the books, pay authors their royalty share, and pay 30% to Apple and still come out ahead? It doesn't seem possible, and if they raise their iPad prices to compensate, the current price of the basic Kindle is low enough that consumers would just buy that instead. OTOH, if Amazon raises ALL their prices, it will kill their e-book business.
They will either have to make a special deal with Apple or withdraw from the iPad, it seems to me, and the latter is not a good result for consumers.
It's not a loophole. Apple approved all these apps in the first place with their eyes wide open. You don't think they noticed that Kindle basically duplicated the iBookstore with the added ability to read Kindle books on other platforms? It was a strong selling point that got a lot of people to buy an iPad.
And what are the expenses that justify Apple taking a 30% cut of continuing Kindle purchases? Once you've downloaded the small app that Apple hosts, you're getting everything else from Amazon servers. Apple pays nothing for the book licenses. They're not attracting new business when you just buy another book - you probably would have bought it for your Kindle or your computer anyway. But if I spend $600 on books, Apple feels justified in taking $180 off the top. For what? It's a lot more than Amazon is clearing, that's for sure.
You make interesting leaps in logic. I agree that this may kill business models. I agree that they may not need to absorb the costs. I agree that developers, content providers, and other middle-men like Netflix and Amazon, are not going to be able to continue like they were.
But "ultimately hurting the consumer"? That is a leap. If there is a need which is backed up by $, then someone will rise to meet that need. When do you draw the line with "ultimately"? What if, when the dust settles, all of the businesses have changed, but my experience is 10X better as a consumer.
Sucks to be everyone else, but not my problem.
It's not about what you can justify, it's what you can get away with. This is how all business, and all products and services that you use, work.
Why do you suddenly care now? Tell me everything you spent money on in the last year, and I will find someone in the supply chain of that product that didn't "earn" their share. Are you suddenly going to complain about that too?
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Fine, but how does Apple get to dictate that non-iPad purchases cost the same as in-app purchases? The Apple commission is a 30% expense that doesn't exist if you buy the subscription from a website. Why should the subscriber be forced to pay that expense in an out-of-app purchase? That's the part of this arrangement that hardly seems legal, let alone fair. And that, unchanged, is what's going to destroy the iPad business model. Wait and see.
I agree that this would demonstrate that the content delivery middle-men have more leverage in this negotiation than Apple. I would also put the chances of everyone letting it come to this at <50%.
Why do they need expenses to justify they're cut?
But if you need expenses, there is the billions of free app downloads and updates that Apple serves up. In addition to hosting and promoting the app pages.
Apple has continually said that they operate the store a bit over break even. I think it was Gartner that estimated that Apple had made a gross profit of 189 million in the first two years of the App Store. Take out overhead, taxes, and interest from that number, and it's seems Apple is telling the truth. Millions of dollars being relative of course to their multi-billion dollar quarterly profits.
They don't. They dictate the prices in their store. They aren't willing to sell a product or service if you are going to sell it somewhere else cheaper. Nothing nefarious about it.
What does that mean? They aren't forced to pay any expense. They are offered a product or service at a price. They choose whether or not to buy it at that price.
What you are arguing is so common, it's silly. If you offer a product in a retail store, you pay a commission. If your customers buy it direct, you don't have to pay the commission. How come it's cheaper to buy a lot of products at Amazon than direct from the manufacturer?
Strange how it only "seems" unfair when Apple does it. The fact that it's common retail practice goes out the window.
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It really isn't. 1.46 x the expense is not worth not having to enter a credit card number. That is BAD for me as a consumer.
If Apple and you are so sure that this is a good deal, make it optional rather than anti-competitively compulsory. If it's such a good offer everyone will use it anyway and companies will go the way consumers demand.
But we both know this mechanism can't stand on it's own two legs, because it's bad for customers.
Phazer
Where do you get the 1.46x? Are you operating under the assumption that companies don't routinely pay retail commissions? That they don't pay for advertising and promotion? What guarantees that prices will go up at all?
I think this is a crappy policy if you want retailers like Amazon to have a presence on iOS. But it's yet to be seen if it's bad for consumers to not have retailers taking a cut between Apple and the content provider. But it's a reasonable policy when dealing with the content providers directly.
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Umm apple makes money off the kindle app. A lot of people choose to buy an iPad for example BECAUSE it could read their kindle books (along with do other stuff) if it did not read the books no iPad purchase. That alone makes money for Apple.
Amazon pulling the kindle App from Apple followed by making it crystal clear it is 100% Apple issue puts pressure on Apple. I would not be surpised to see multiple services start pullling away from Apple.
This just gives more power to android. kindle is on Android. Netflix has an Android App coming. neither Amazon nor Netflex can afford to give Apple 30% straight cut off the revene. That is more than they make off the stuff.
Apple is being greedy here and is abusing their power. I will call Apple unethical abusing their power getting into place then changing the rules to kill competition.
I will say it has been run reading the multiple post from Apple Appoligist trying to justify this move and most if not all of them have really been weak at best.
Apple has every right to charge for a service they provide. The market will tell Apple if the price is too high or just right. Fortunately, Apple is not a monopoly, so you, the consumer, and you, the software vendor, and you, the content provider, and you the publisher, ..., have multiple options available to you if you choose to not play by Apple's rules. Yay!
[rant]
When did it become "wrong" to charge for a service that you provide? The 90s really screwed us... if you are being provided a service, you should count on paying for it. If you think it's too much, find an alternate vendor. Done.
[/rant]
I feel better.
umm you do not need to be a monopoly to get busted for Antitrust. Walmart has been busted multiple times for AntiTrust.
They go into an area sell at a lot to drive out competitors and shortly afterwards they raise their prices back up. Strong arm suppliers.
To be busted for antitrust you just need to have enough market power to hurt consumers and in this case Apple has enough power to really hurt consumers.
Back to the walmart example Apple intentionally sold stuff at a loss (free kindle app) for example to get entrench into the market. Once they are they Apple decides to jack the prices up and all consumers can do is bend over and take it up the rear so to speak because they kill off competion first. That is antiTrust and Apple can and should be busted for it.
as for Apple cost on lets say Kindle. That Apple is what a few megs at most. That means server storage cost is less than 1 cent per time it is downloaded. You are going to be very hard press to explain to me why Apple should be getting a huge extra cut now after that App along got them tons of sells. Apple did not invest time and money into developing the App.
What service? I'm installing a piece of software on my computer and then, I'm buying a bunch of books from a separate website that sells books, and then I'm loading them into MY computer to read them with said piece of software...
iTunes runs on Windows, maybe Microsoft should start charging Apple a percentage from each song sold through THEIR platform...
Edited to add: Hell, the only "service" I used from apple, was to download the Kindle app in the first place, and that was, because Apple won't allow you to install apps from anywhere else, otherwise, Amazon would gladly host it in it's own severs...
One point of clarification--the Kindle app way way predated iBooks and the iBookstore. Apple copied Amazon.
Oh nothing -- just an integrated hardware, os, application framework and app distribution service. That really isn't much is it. That's why there are a ton of them out there today. Fortunately, if you don't value the integrated platform, you have other, non-integrated choices. Enjoy those choices.
Rodimus Prime: fine, bring on the Trust Busters. That will lower prices.
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Both apps offer in-app links that take you directly to their purchasing page. Apple wants customers to be able to have a seamless experience and protect their own personal data. Apple also wants to make more money and put the squeeze on some of their competition. Sure Apple wants me tied into their platform, but at the same time the trade off is they are giving me a more seamless way of doing business with third parties. This was great for the music customers, but bad for the music industry. Apple was forced to put in DRM initially to appease the music industry, and then was able to negotiate its removal once iTunes was the largest digital music store on the planet. This was good for the customer.
Personally, I don't trust any of these guys. If the music labels and movie industry had their way they would charge me for every time I viewed/listened to a media they produced. They certainly want to charge me full price to sell me the same content on a new format (VHS, DVD, Blue-Ray, digital download or Cassette, CD, digital download). If Amazon had their way and became the dominant digital book producer, then those super-cheap prices you remember (where they sold at a loss) would disappear and since your entire collection would be on Kindle you would be stuck. Heck, they could even pull their Kindle apps and make you buy their hardware if most of the books you owned were with Amazon -- don't kid yourself about the short-term cheap prices that Apple made go away. Those prices were going sooner or later, and if they went later it would have been after Amazon had their stranglehold.
So personally I don't care much for what makes these guys upset. Ultimately it comes down to one thing. If they are making money then they will bow to Apple, if they have alternatives then they will leave and call Apple's bluff. Something is going to give. If they leave, Apple will surely relent and they will be back.
I'm just not glad that Apple is not using my personal data is a bargaining chip at the table with these guys (at least not yet).
And as a software developer, I must say that Apple giving a channel to sell software to the world without any major investment in distribution costs (only marketing and development costs) is awesome at a 30% cut. I'll take it all day long.
the point your missing is that the developer when they are selling these add on features/etc isn't leveraging the app store at all and apple doesn't support it, they just expect to get paid. Initial app sales, i agree, follow on is the dev's responsibility and now apple is they are saying they want a 30% cut across the board no matter what
Where does your understanding of antitrust law come from? Antitrust claims in the US require "significant and durable market power." Which is how the FTC defines a monopoly. Can you provide an example of a successful antitrust prosecution in the US with less than 50% market share? If so, how does that percentage compare to Apple's percentage in whatever market you are talking about?
http://www.ftc.gov/bc/antitrust/single_firm_conduct.shtm
As pointed out, the market is a huge question in the discussion. And if you read almost any comment from actual experts that have commented on possible antitrust actions against Apple, the likelihood is that Apple does not have sufficient market dominance.
That's actually a really good article. I wish it were required reading before posting here, as he sums up what I have been saying this whole time, namely that it isn't worth discussing whether this is their right (because it is), or ignoring antitrust issues (because there aren't any), this just feels wrong.
FTFA "Lets hope some of these arguments do something to allay the sinking feeling Ive got in my stomach as I imagine a world where a significant number of the worlds computer users are locked behind a 30% toll being enforced by one of the most monolithic companies around."
That's at least honest.
And poking holes in someone's bad logic <> defending Apple. This is a false dichotomy (either you're with me or against me).
I can dislike Apple and still call your arguments moronic simply because moronic arguments offend me personally.
I don't know why people care, if for for example, this hurt Amazon in the e-Book business.
Due to contracts, Amazon and iBooks sell the books for the same exact price. So to the consumer it doesn't matter at all. They can buy the books for the same cost.
From Apple's perspective they are a direct competitor of Apple's in the e-book space, and thus got to pay to play.
Apple controls this particular retail space and can charge or require whatever they want for access, just like any other store can do the same. Companies can meet those requirements or not sell there. It may require changes to some businesses, but the world changes and evolves. It is what it is.
Safeway is not required to carry any product that someone else is selling. They can even put requirements on the distributers and manufacturers for getting access ot their shelf space. It is how business works.
This whole thing has zero anti-trust legs at all. Retailers are not required to carry someone's product just because someone wants them to do it. The App Store is a STORE. A Retail Store.
Due to contracts, Amazon and iBooks sell the books for the same exact price. So to the consumer it doesn't matter at all. They can buy the books for the same cost.
From Apple's perspective they are a direct competitor of Apple's in the e-book space, and thus got to pay to play.
Apple controls this particular retail space and can charge or require whatever they want for access, just like any other store can do the same. Companies can meet those requirements or not sell there. It may require changes to some businesses, but the world changes and evolves. It is what it is.
Safeway is not required to carry any product that someone else is selling. They can even put requirements on the distributers and manufacturers for getting access ot their shelf space. It is how business works.
This whole thing has zero anti-trust legs at all. Retailers are not required to carry someone's product just because someone wants them to do it. The App Store is a STORE. A Retail Store.