Financial Times Won't Give Apple A Cut, Drops iOS for Web App

[nevir]

Apple should simply allow the user to decide if they want to use the in-app purchase process (and pay a premium) or get the books, mag copies, etc in whatever way the vendor designs it.

Apple is unwilling to budge on this: It fractures the user experience and we go back to a ghetto of a myriad of vendors using a myriad of payment methods. Smaller developers will probably opt to stick with in-app purchasing, because it's easier and likely cheaper. Large dev houses will opt to roll their own, for a lower margin and their own lock-in. That wouldn't bode well for Apple; it's the larger dev houses that are going to be driving the sales of in-app items/subscriptions (with a few popular outliers that quickly become large dev houses. Like Rovio.)

Apple simply should also demand fairness -- that the customers price will be no more than the lowest in-app purchase price on any other device.

For the books business, apple already is demanding a price guarantee. They're also demanding a 30% cut. I would be terrified if they entered any other markets and pulled the same move. Here's the math:

• Apple got most book publishers to switch to the agency model: Publishers decide on the consumer-visible price of a book; distributors (Apple, Amazon, B&N, etc) get a 30% cut and cannot change the price, even for promotions.

• Apple drops the bomb about requiring in-app purchases if an app provides any sort of link to an out-of-app purchasing experience. In essence, Apple is now asking for a 30% cut of every book.

• And of course, the agency pricing model dictates that those books be sold for the same price (in-app and out of app)

Aka: screw you Amazon/B&N/etc, you can't mark up the prices of the books. If you want to sell books via your native app, you have to take your 30% cut as a publisher and turn every single penny of it over to us.

The current language simply will not fly and loss of companies like Amazon/Kindle, Barnes and Noble/Nook will essentially kill the iPad, and with it Apple. If Apple does not become reasonable in their contract terms, you will see Apple stock drop like a rock and bankruptcy soon to follow.

Doubtful. For one, Apple has enough cash on hand to last a very long time. They're also very shrewd, and only bully other businesses around when they have a successful vertical that competes (now or soon). Aka, their hope is that most users won't care, and will just switch to iBooks (and it seems very likely).

Secondly, Amazon has clout, but is unwilling to be overly aggressive to other businesses. Apple may have screwed them for now, and they're almost certainly going to drop the native app for a web app, but they're not going to give Apple the finger via press release or otherwise.

And if Apple does start to fail due to this, all they have to do is reverse the decision. They have the users to allow those businesses to jump back in without a second thought.

 

[JayMBP]

I personally think it's a good move by FT. Apple was getting too greedy with the 30% cut.

People have to realize, what Apple is doing with the 30% cut is because they think they can. App store has grown so big that Apple think it's ok to charge so much.

How much do bandwidth cost? About 7 dollars per mbps, roughly 320GB of transfer. How many mags can 320GB send? tens of thousands if not more (not sure how heavy FT is, but I can't see a magazine being more than 50MB each)

Even with the cost of servers and support factored in, 30% cut is ridiculous by any calculation.

And why Apple doesn't deserve 30% on CONTENTS? Because these publications invest money (hire reporter to write, establish sources for their news, hire photographers for pictures... etc) to create these contents, Apple in no way facilitated the creation of contents but merely the delivery of them.

If Apple starts charging devs for bandwidth/support, all their right to do so as they are in fact, value added by Apple. However, Apple took no role in creating the contents, making their 30% cut on contents unreasonable if not plain robbery.

It's an insult to content creators and users like US. We are the reason App Store became so powerful, Apple should get money for service they provide and not capitalizing on the quasi-monopoly it has because of its users.

 

[ChazUK]

Html5

I may be speaking out of line, but after reading the complaints in this thread I can't believe that some people are so anti flash here.

Everyone has been pushing HTML5 in the crusade against Adobe but here we have a company embracing HTML5 which has a tiny detrimental effect on Apple and they complain against it.

I certainly want open standards to replace flash but the app based model will become the new plug in, restricing content to certain platforms.

What would you all prefer, a world where apps were restriced to a platform "We only support iOS and Android as it's not worth the development time producing an app for WebOs, Windows Phone, Meego etc" or one where any platform with a standrds compliant browser can access the content?

In this case im glad there isn't an "app for that". It's also telling that some people don't realize that HTML5 supports off line caching with their comments.

 

[EzJe]

In this case im glad there isn't an "app for that". It's also telling that some people don't realize that HTML5 supports off line caching with their comments.

Having actually used the FT's new "App" I can tell you the offline browsing works. However the "App" (even on the iPad2) is a juddering mess when you try and scroll and flickering abounds.

Would I pay for access like this...? Perhaps if someone else was paying but not myself...

 

[arcite]

As others have mentioned in this thread... the 30% was not the main issue with FT. FT wanted to information of the users from Apple. This is not a unknown situation... back in April, FT was making comments about it. http://uk.reuters.com/article/2011/04/04/tech-us-financialtimes-apple-idUKTRE7332D720110404

I personally let my FT subscription expire and moved to WSJ and Barrons (both on the iPad). Personally, I prefer the iPad experience over the web or an actual paper now.

This is what FT doesn't get. People aren't buying physical 'papers' anymore. Its all digital. The information can be replicated and replaced by a myriad of other news providers, some of them even free. It is Apple who is saving these archaic magazines/papers, most of them are currently/near bankrupt anyway. Newsweek was sold for $1 and NYtimes is funded by the goodwill of Carlos Slim. Magazines are increasingly becoming irrelevant. Innovate or die.

 

[ChazUK]

Having actually used the FT's new "App" I can tell you the offline browsing works. However the "App" (even on the iPad2) is a juddering mess when you try and scroll and flickering abounds.

Would I pay for access like this...? Perhaps if someone else was paying but not myself...

I can't vouch for the iPad 2 edition but the web app on my iPod touch seems fine.

If there are quality issues then certainly, complain away and vote with your wallet, I wouldn't disagree with that at all.

 

[caspersoong]

This would be really bad for customers. This reduces user experience.

 

[dubnde]

post deleted

 

[manu chao]

When people mention it working offline, do I have to have opened the website? Opened the specific article? Or will going to the website cache every article?

http://apps.ft.com/ftwebapp/faq.html
"Once downloaded you will be able to access all of the articles... Note that videos are not downloaded for offline access as this would make the download time far too long."

Are you able to start the webb app offline? Works brilliantly if I go offline having started online. But fails to start offline.

The native app also cannot download new stuff without being opened first while being online (thought that looks like changing with iOS 5).

People seem to forget the 30% is for new subscribers that come through the app store only...

And for people renewing via the app.

Let them know that you are willing to pay a 50% surcharge over the regular subscription price for the app.

Except that FT cannot do this, they cannot charge 50% more for access through their iOS app compared to website access if they want to bundle app and web access (and who would like to pay separately for both?). Apple requires price matching.

 

[shotts56]

Exactly its their loss. Either way I don't think these very specific newspapers with limited readership care as much. I do know about the newspaper but have never really cared about getting it. WSJ is more of my taste but again limited client el.

NY Times is a complete different animal and who does not read it?

Eh, people in the UK ? You do know that the FT is a London-based publication ... the vast majority of people in the second-largest financial services location in the world read the FT.

I know of very few people who read the NYT. Its full of silly Americanisms like the temperature in farenheit and the insistence in putting the country name after a city name everytime it is mentioned. (We know where London/Paris etc are, you don't need to call them "London, England" and "Paris, France" every bloody time[!])

Joking aside, I can understand why the FT have done this, but I did prefer the old app than the new web app. I've already had the web app crash on me this morning, something the app never did, and the web app just seems jerkier, slower and less stable on my iPad 1. Pity.

 

[dubnde]

I'm having the same problem...If I turn off the internet, the web app says it can't connect and offers the option to "Close" or "Retry." This is no solution at all. If I can't exit the web app at some point while I'm offline (on a plane for instance) to do other things, then have the ability to come back to the app to read, it's worthless.

ok. Got a response from FT and they suggest the following which worked for me:


1) Go to settings on your device:

2) Go to 'Safari':

3). Clear history/cache/cookies. Please note that clearing these will also clear any stored information you have for other websites.

4). Clear all the databases entries under app.ft.com

6). Restart the device

7) Then open the Web App again from the home screen, increase your database if requested and allow content to be downloaded again from scratch.

Then try offline mode (start the web app in airplane mode)

 

[KnightWRX]

In this case im glad there isn't an "app for that". It's also telling that some people don't realize that HTML5 supports off line caching with their comments.

A lot of "Apps" on the app store are just glorified websites. Seriously, a bunch of drink recipes with more added everyweek ? Hello, that screams "just make a darn website". Same for weather, stock, streaming and all other kinds of informational apps (Apps for restaurants... or your carrier's billing solution, or online banking...). A lot of these don't even work if you don't have an active connection... tell me what's the point of going Native besides getting into the App Store ? At least Google got it right with the Chrome app store.

You can also just store a website bookmark as an icon on your springboard on iOS too, which just launches Safari with a URL, making it look like an "app". And iOS since version 2.1 has supported the Offline mode for HTML5 applications, as defined in the HTML5 working draft :

http://www.whatwg.org/specs/web-apps/current-work/multipage/offline.html

iOS 2.1 guys. We're 2 years later. Native apps are good for things that aren't quite up to snuff yet, things like games and managing local content/hardware (the iPod app, the Phone dialer, camera apps, photo galleries, etc..). The rest can easily be made on the Web. Heck, most could've been made in the browser 10 years ago with ease and what we had back then as far as Web stuff went.

 

[ChazUK]

You can also just store a website bookmark as an icon on your springboard on iOS too, which just launches Safari with a URL, making it look like an "app".

That was one of the first things I did when I came back to the world of iOS with Google's web apps.

One great example is the YouTube web app which is far better than the native iOS YouTube app IMO. I also think it's great that it works and looks exactly the same on my Nexus S/ZTE Blade.

I'd assume it works just as well on WebOS too.

It's good to see such cross compatibility from a single source.

 

[Flitzy]

I'm glad they are doing this. Apple is being a bit too greedy.

And FT isn't being greedy?!

The 30% also covers marketing and handles any upgrading and file storage.

They can do what they want but to pretend they're not going to be paying that somehow is just foolish.

I love watching companies complain about this though - Apple pretty much gives them access to a huge customer base and they just turn their noses up at it.

 

[kyeblue]

Apple provides some infrastructure (billing, hosting) value and some marketing value to publications that use their service. For a small publication, the marketing value may be large compared to revenues. For a publication which already has a huge readership base, the marketing value is going to be much smaller relative to the companies revenues.

Let's take two examples. Publication A is new and has zero circulation. Through an app, they can gain 10,000 readers at $50 per year. That's 10,000 readers and $500,000 more than they would have without the app.

Publication B is, say the FT. I don't know their circulation/rates, but just for sake of argument let's say their current circulation is 200,000 per year at $100/year= $20M. If they add an app, they could gain maybe 10,000 more subscribers. However, of their current 200,000 perhaps 50,000 already have iPads (they have an affluent readership) and will use the app as well. So, unless there is an additional surcharge for the app subscription BEYOND the regular subscription,

they gain 10,000 new readers X $100 X 70%= +$700K

they lose the Apple surcharge for 50,000 app converts X $100 X 30% = -$1.5M.

The above isn't meant to be accurate in the specific numbers. I'm just trying to demonstrate how an established publication can lose from having an app with a 30% blanket surcharge. You can create other scenarios and assumptions where this is true as well.

This only happens in your fantasy. FT is an established brand (on par with Apple in its own world) with loyal high-end business readers. I don't think that they rely on apple to get their readers.

 

[kyeblue]

And FT isn't being greedy?!

The 30% also covers marketing and handles any upgrading and file storage.

They can do what they want but to pretend they're not going to be paying that somehow is just foolish.

I love watching companies complain about this though - Apple pretty much gives them access to a huge customer base and they just turn their noses up at it.

FT is not foolish. What exactly has Apple done for FT, promote its App as one of millions of Apps. To the contrary, App needs big clients like FT, WSJ, NYT to market its iOS devices.

 

[ChazUK]

And FT isn't being greedy?!

The 30% also covers marketing and handles any upgrading and file storage.

Apple would only store the app, wouldn't they? The video and article content is hosted by the FT themselves which would make up the bulk of their bandwidth needs.

As for the rest, they manage to handle it all prior to the impending 30% cut of future subscriptions through he app store.

Im sure if someone subscribes to the FT, they'll be able to inform their customer base about the web app without the Appstore's help.

 

[kyeblue]

Eh, people in the UK ? You do know that the FT is a London-based publication ... the vast majority of people in the second-largest financial services location in the world read the FT.

I know of very few people who read the NYT. Its full of silly Americanisms like the temperature in farenheit and the insistence in putting the country name after a city name everytime it is mentioned. (We know where London/Paris etc are, you don't need to call them "London, England" and "Paris, France" every bloody time[!])

Joking aside, I can understand why the FT have done this, but I did prefer the old app than the new web app. I've already had the web app crash on me this morning, something the app never did, and the web app just seems jerkier, slower and less stable on my iPad 1. Pity.

There is a London in Ontario, Canada, not as grand but not a tiny place either.
There are at least three cities named Paris in US, on in Texas (namesake of the famous 1984 movie starring Nastassja Kinski), one in Illinois and one in Tennessee.

Joking aside. Can FT still have an iOS application but just take away its subscription function?

 

[Frobozz]

LOL.

The countdown clock until they buckle under has officially started. Why fight it, FT?

 

[kcwookie]

I'm tired of going through the App store looking for magazine content. I subscribe to the Nation, but hope they transition to the NewsStand. One of the best thing is the ability to read publications from outside the US. I enjoy the British press and also like the English publications from Asia. No, it's FT that is making the mistake, they will follow NBC's footprints and be back.

One thing about subscriptions, if they are reasonable, like the Nations, I'm more likely to buy on a whim.

 

[widEyed]

Ermm.. it does keep offline content no problem. I'm using it as we speak

I know HTML5 includes a locally cached database (SQLite up to 10MB or something) but I'm wondering how you access the FT content when you are offline? Do you just enter the same old http:// uri or is there some other trick to it?

 

[Brother Esau]

Good luck finding someone that makes advert for you for free.
Are you really having a business and don't know how economy works?

Thank you for going out of your way to be rude and obnoxious!

Actually, I do not expect anything to be done or given to me for me for free in life and I never have!

Secondly, I would build my own app because I can never find anyone that actually does what they claim they can do. My standards are very high and every time I employ someone to do a job for me they either completely fall short on what they say can do or are excellent at what they do and I end up playing tail chase with them to get the job done, so in the end, each and every time, I wished I had of just done it myself to begin with!

I command a good wage for my work and I have absolutely no problems paying well for quality workmanship done for me because I myself expect to get paid well for my education level and skill ability.

I know full well about advertising there buddy, I spend $10,0000.00 a year just on my Yellow Pages ad that I designed and am on the front page of GOOGLE , BING & YAHOO for anything Computer Repair Related in Wilmington NC and surrounding cities via compliments of my SEO Skills and none of that is a attributed to single purchased back link, it is all strictly from organic S.E.O

 

[donny77]

So by using itunes, FT loses 30%. The App store would need to boost the amount of purchases by 1/3 for FT to break even. Counting the cost of maintaining a server, download management, customers who leave beacause its "too hard" to download, decreased visibility, etc etc (because Apple DOES give you something for that 30%), I would guess (completely guess since I don't do this for a living) Apple would maybe really only have to boost your business by a 25% or maybe even 20% or 15%.

Personally I think the App store would boost apps by at least enough to make it worth it, but maybe not. I'd love to have nerdy number talk from both sides...I have no idea about how cost of running a download service, HTML 5 website, transaction processing, customer service for said downloads, server space and all that junk compares to profit

It's not even that. Apple gets 30% of subscriptions CREATED through iTunes. FT loses NOTHING on current subscribers!

 

[mingoglia]

I too think this is awesome news. Apple is getting far too greedy. I look at it this way. Right now those selling apps are "sharing" 30% with Apple. Slowly, this 30% will be built into the price of a given application (if we continue down this path). In the end, the end user gets screwed. Companies aren't going to "lose" 30% of their revenue, they're going to eventually pass it on. I refuse to allow Apple to elbow their way in as just another middle man. I'm happy paying for an app that does something useful... Turning web pages into stand alone apps IMHO is going backwards, not forwards.

 

[Rigby]

LOL.

The countdown clock until they buckle under has officially started. Why fight it, FT?

It seems Apple are the ones buckling. Heise News (biggest IT news site in Germany) reports that Apple is dropping the requirement that external subscriptions have to be also offered as an in-app purchase at equal or lower price .

http://www.heise.de/newsticker/meldung/Apple-streicht-umstrittene-In-App-Kaufvorgabe-1257422.html