FTC Looking Into App Store Rules Regarding Subscription Services

[AdonisSMU]

All of which didn't cost Apple very, very little. They didn't spread word of Spotify across the internet, didn't make it somewhat of a household name. They provided the platform, ran it through a quality check, and gave it a spot on the front page of own app store. It was Spotify who had to negotiate licensing deals with all the various record labels, build the infrastructure to support potentially millions of people streaming millions of songs through their service without any hitches or hiccups, had to spread word of the service. That costs them considerably more, and Apple taking a perpetual 30% cut of their subscription fees, their lifeblood, isn't kosher in my opinion.

I can understand them taking their 30% off apps bought through the App Store, but subscription services are another matter entirely. Think of it in terms of iTunes and the iPod, which didn't become a massive success until it was made available on Windows. Does that mean MS deserves a 30% cut of all transactions made through iTunes? They're providing the platform after all. They're the ones putting it in front of what was then a much, much larger market than what it initially had. I'd still say no, because MS is merely providing a gateway, and iTunes added value to Windows at the time. It's the same situation for Spotify and Apple.

It didn't cost Apple very very little. An engineer looking at your code is running them $200/hr easy. Then the R&D. The infrastructure etc... Then you are subsidizing all those people who put "free" not "freemium" apps onto the store. I think Apple needs to come up with some wiggle room here. Apple probably deserves more than the initial $3 for distributing your app to millions of people. However, it shouldn't be in perp. Maybe they should limit it to the first three months and any app updates but then it becomes nickel and dime or just change the rate for in app subscriptions TBQH.

 

[AdonisSMU]

Seems unusual enough in this case for the FTC to raise its eyebrows at this stage...

Also there is a difference between a retailer slapping their brand on something and manufacturing the item itself when it comes to wholesale cost.

There are an army of developers working on the music app each one costs a minimum of 200k/hr + health care and other benefits. Then factor into that the amount of time before you have even a releasable product which was about a year or longer. then don't forget the designers who all have to be paid and the record licensing and the fees etc... yeah.. much harder than manufacturing.

 

[Oletros]

Apple's policies are the same for everyone, not just the rival music streaming companies. Google charges the same amount. Seriously, just force users to sign up online. Sheesh.

Google allows the redirection to the Web and doesn't force using its payment processor. And the last thing is the important thing.

 

[AdonisSMU]

Google allows the redirection to the Web and doesn't force using its payment processor. And the last thing is the important thing.

Yeah that is important. I wonder what the hidden risks are of going this route?

 

[Oletros]

Here we go again...
Money hungry government going after Apple's money.
The 30% is for all the development tools, advertisement, AppStore, etc. expenses Apple is incurring and passing on the savings to the developers.

This is covered by the developer fee

 

[AdonisSMU]

This is covered by the developer fee

if only that was covered by the developer fee... lol... There is a reason Apple makes just over the breakeven cost on the App Store.

 

[MH01]

They shouldn't be looking into anything. Apple isn't doing anything differently than they did before other than now they have a music app with streaming. Everything else is still the same as it relates to other vendors. The article clearly states at least some of the FTC thinks the 30% cut that has been in existence since the app store itself is an anti trust violation.

Do you realize that YOU would benefit from this investigation?

remove the competition and prices go up. Why are you defending apple so hard without even knowing the facts? Nothing has happened yet, all that has happened it's popped up on the FTC radar.

Apple is doing something different ! Show me the other Apple made apps that Apple has sold to you. I thought all the Apple apps were free.... I might be wrong

 

[djgamble]

They know the rules before they got in on the App Store. They signed the agreement knowing full well that they would be responsible for 30% cut of all sales. I agree that it's not a great deal but then you don't agree to the TOS and make apps for someone else if you think you can make more money doing it somewhere else.

Exactly!! It's like setting up a stall at your Sunday markets where 30% of profits go to the group that organised the markets and rented the grounds.

If you don't like the rules then setup shop elsewhere. Or... organise your own markets across the road at another park.

 

[thasan]

Absolutely... I tried Spotify, Apple Music, and Google Play in the past two months. Spotify's method for organizing your personal music is terrible. Apple Music was missing 1 out of every 5 songs I searched for and had my least favorite UI. Play music was way too radio focused.

If Apple Music can just match Spotify's catalog, I'll deal with the UI. I listen to a lot of smaller bands though.

I tried a few small international bands that I never found in spotify. Never going back to spotify, again!

 

[MacrumoursUser]

if you don't like the app store, don't put your app on it.

What a load of crap.

 

[Renzatic]

It didn't cost Apple very very little. An engineer looking at your code is running them $200/hr easy. Then the R&D. The infrastructure etc... Then you are subsidizing all those people who put "free" not "freemium" apps onto the store. I think Apple needs to come up with some wiggle room here. Apple probably deserves more than the initial $3 for distributing your app to millions of people. However, it shouldn't be in perp. Maybe they should limit it to the first three months and any app updates but then it becomes nickel and dime or just change the rate for in app subscriptions TBQH.

I'm sure running The Process isn't a cheap one, and is probably one of the major reasons why the App Store only operates slightly in the black. But the cost of running a service like Spotify or Netflix isn't entirely a one sided affair.

I think what you're proposing would be a far more fair solution for everyone involved. Apple could take their 30% cut for the first first 3-6 months of a subscription through the App Store, then drop it. They'd make a goodly bit of money off of initial signups, and subsidize some of their server costs like you said, while not remaining a permanent burden on the bottom line of 3rd party services. It's a good compromise.

 

[MH01]

if only that was covered by the developer fee... lol... There is a reason Apple makes just over the breakeven cost on the App Store.

Though you are fine with spotify having to charge $12.00 to compete with Apple music?

Here is the irony , at 9.99 spotify cannot breakeven through the App Store.

Hence the email to its users..... Hence the FTC saying "wait a minute ....."

Sure Apple helped spotify grow, they also made 30% profit for their generosity

 

[thekev]

The government needs to stay out of it and let the free market sort this stuff out TBQH. I hate when the government gets involved in picking winners and losers with the interpretation of the law. Apple's 30% cut is standard retail practice. The maintenance of such a HUGE app ecosystem alone is a HUGE expensive undertaking. The 30% covers the cost and offers Apple what is at best a slightly above break-even proposition. Apple has not done anything wrong to Spotify other than offer up more competition in the music streaming market seeing as Spotify's efforts to get users to stream their music have been unprofitable for pretty much everyone involved.

I highly doubt that. Others do payment services for much lower percentages. Anyway I like Spotify. I hope they hold up against Apple.

 

[MH01]

There are an army of developers working on the music app each one costs a minimum of 200k/hr + health care and other benefits. Then factor into that the amount of time before you have even a releasable product which was about a year or longer. then don't forget the designers who all have to be paid and the record licensing and the fees etc... yeah.. much harder than manufacturing.

What's your point ? All steaming services have to do the same.

200k/h ....?? They do not even come close to making 200k per year, no where near it . And it's not an army, it's resources you move among projects.

 

[Oletros]

Exactly!! It's like setting up a stall at your Sunday markets where 30% of profits go to the group that organised the markets and rented the grounds.

If you don't like the rules then setup shop elsewhere. Or... organise your own markets across the road at another park.

Wrong analogy, regarding subscriptions Apple is not renting anything and they are not organizing anything

 

[MH01]

Exactly!! It's like setting up a stall at your Sunday markets where 30% of profits go to the group that organised the markets and rented the grounds.

If you don't like the rules then setup shop elsewhere. Or... organise your own markets across the road at another park.

And if the group organising the markets and ground, one week turn up selling the same goods as you for the same price while taking your 30%..... Issue maybe? I would feel hard done by they can use your 30% to undercut you

 

[Martinez74]

Not allowed to redirect users to sign up via the web in an app.

Why should Apple allow people to circumvent Apple's own system by inserting a link?
Apple created that market. Apple built, secures and maintains the app store. App builds the iPhone that access that online store. So why should Apple allow companies that profit off that platform to circumvent the payment mechanism built into the platform? Surely you can't expect companies profiting off the app store to be allowed to circumvent Apple when it comes to payment.

The 30% fee can be contested (too high for subscription services imo), but circumventing the system by inserting a link is a no go area. Apple have every legal basis to prevent companies from circumventing it's own system.

 

[rp2011]

Why should Apple allow people to circumvent Apple's own system by inserting a link?
Apple created that market. Apple built, secures and maintains the app store. App builds the iPhone that access that online store. So why should Apple allow companies that profit off that platform to circumvent the payment mechanism built into the platform? Surely you can't expect companies profiting off the app store to be allowed to circumvent Apple when it comes to payment.

Why? It's called symbiosis.

 

[ScottishDuck]

The government needs to stay out of it and let the free market sort this stuff out TBQH. I hate when the government gets involved in picking winners and losers with the interpretation of the law. Apple's 30% cut is standard retail practice. The maintenance of such a HUGE app ecosystem alone is a HUGE expensive undertaking. The 30% covers the cost and offers Apple what is at best a slightly above break-even proposition. Apple has not done anything wrong to Spotify other than offer up more competition in the music streaming market seeing as Spotify's efforts to get users to stream their music have been unprofitable for pretty much everyone involved.

The free market doesn't work. It especially doesn't work when applied to an already very imbalanced market like we have here.

 

[Renzatic]

Why should Apple allow people to circumvent Apple's own system by inserting a link?
Apple created that market. Apple built, secures and maintains the app store. App builds the iPhone that access that online store. So why should Apple allow companies that profit off that platform to circumvent the payment mechanism built into the platform? Surely you can't expect companies profiting off the app store to be allowed to circumvent Apple when it comes to payment.

The situation isn't at all Apple giving in to greedy services. Apple has ultimately created a market that serves its own needs, and allows others to take part in it. While it's popularity does make it attractive to 3rd parties, it's not like they're leeching off Apple's good graces by using it. The services are directly responsible for the popularity of the platform. The more there are, the more appealing the platform becomes, and thus the more likely it is consumers will buy into it.

Do you think the iPhone would have been as popular without the App Store? The iPad? They would've been dead in the water after the initial hype wore off.

 

[Oletros]

Why should Apple allow people to circumvent Apple's own system by inserting a link?
Apple created that market. Apple built, secures and maintains the app store. App builds the iPhone that access that online store. So why should Apple allow companies that profit off that platform to circumvent the payment mechanism built into the platform? Surely you can't expect companies profiting off the app store to be allowed to circumvent Apple when it comes to payment.

The 30% fee can be contested (too high for subscription services imo), but circumventing the system by inserting a link is a no go area. Apple have every legal basis to prevent companies from circumventing it's own system.

Yes, because Apple doesn't benefit of the apps being on their platform.

And what circumvent are you talking about?

So you're a lawyer when you are so sure that Apple has all the legal basis covered?

 

[ShadovvMoon]

It didn't cost Apple very very little. An engineer looking at your code is running them $200/hr easy. Then the R&D. The infrastructure etc...

I don't know if I've misinterpreted you, but an Apple engineer doesn't look at code for a binary you submit to the App Store...

 

[ScottishDuck]

if only that was covered by the developer fee... lol... There is a reason Apple makes just over the breakeven cost on the App Store.

You are severely misinformed on what Apple makes from the App store, lol

 

[thekeyring]

I used to work at a sneaker store. We'd buy a pair of, say, Vans Authentics for £20 and sell them for the RRP of £45.00. If we had decided to become a sneaker manufacturer, too, we could have sold our own sneakers for £20.00 and made the same amount of money as Vans did. That's allowed. So why isn't the App Store?

How long before the FTC cause Apple so much **** that they decide to leave America?

After all, as Spotify have shown, there is a way around the 30% fee.

 

[Oletros]

I used to work at a sneaker store. We'd buy a pair of, say, Vans Authentics for £20 and sell them for the RRP of £45.00. If we had decided to become a sneaker manufacturer, too, we could have sold our own sneakers for £20.00 and made the same amount of money as Vans did. That's allowed. So why isn't the App Store?

How long before the FTC cause Apple so much **** that they decide to leave America?

After all, as Spotify have shown, there is a way around the 30% fee.

Apple is not selling Spotify subscription