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Hulu Complies With Apple's New iOS In-App Subscription Rules Without Sharing Revenue
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Apples, duh
Really?
When you buy a Kindle book on Kindle for Mac or Kindle for Windows do you use Apple or MS infrastructure?
Since when did Hulu compete with Netflix? Netflix focuses on movies and some older tv shows. Hulu Plus concentrates on current seasons of hit tv shows plus entire back seasons of many of them on demand.
So Hulu's competition is the cable operators and cable networks not Netflix. Last time I checked, cable subscriptions were upwards of $75 a month and include far more ads than Hulu.
So Hulu is offering a far cheaper product as well as far less ads then their competition. Their catalog isn't as big as cable but I think the idea that people actually want hundreds of channels is fast disappearing.
Except that the amount of infrastructure Apple provides when it comes to subscriptions in minute in comparison to an app sale.
It goes like this:
User buys application, Apple takes 30%, Apple's servers provide the file, developer gets an electronic funds transfer roughly 2 months later.
User buys subscription or in-app purchase of new content, Apple takes 30%, developer's server delivers the content, developer gets an electronic funds transfer of the 70%, again roughly 2 months later.
In the first scenario, Apple provides credit card processing, hosting and fulfillment (both initially and for re-downloads) and provides eyeballs to the application.
In the second scenario, Apple provides credit card processing and eyeballs.
In my app's case, I'd be very surprised to learn that most of the folks buying it aren't buying it because of my company's efforts. We do a big email blast to our customers, sales of new content spike. They then dwindle back down until we contact the customers again.
Of course, there are some new sales, and for those Apple certainly deserves something. Buy 30% on an in app purchase is still quite steep. I'm getting less for that 30%. I feel like I should be charged less.
For Apple to have a computer OS for iOS (or potentially Mac OS), which forces outside companies to pay 30% for any transactions, sales, or to be listed for subscription is outrageous. It is anti-competitive.
it is why Apple TV isn't open, sadly it looks like Apple will continue their closed wall program. as more people move to a ipad for some everyday usage from a pc or mac, it limits what those users can do.
will Apple be anti-competitive and block Spotify App from ipad/iphone because it competes with itunes in north america?
will they block an apple tv variant? some of this smacks of anti-trust issues and being anti-competitive.
it is why Apple TV isn't open, sadly it looks like Apple will continue their closed wall program. as more people move to a ipad for some everyday usage from a pc or mac, it limits what those users can do.
will Apple be anti-competitive and block Spotify App from ipad/iphone because it competes with itunes in north america?
will they block an apple tv variant? some of this smacks of anti-trust issues and being anti-competitive.
It has more to do with who generated the customer. Apple is not in the business of driving customers to other vendors -- especially those who sell competing products. I personally think Apple should have left well enough alone but I can see their point of capturing what is, in essence, referral fees.
And? OS X belongs to Apple, Windows 7 belongs to MS and Android to Google.
Is Amazon using any of thos infrastructures when a Kindle book is bought though the Knidle app or a browser?
Windows belongs to MS. Should they get a cut of every piece of software sold to run on Windows? MS would be laughed at and then sued for anti-trust if they tried to get a cut of Netflix subscriptions.
If Apple's App Store is doing "nothing" then why are they trying to be in it? Do you think Walmart, Amazon, or Best Buy lets anyone place their products in their store for free? I think you need to rethink things a bit.
Not in the slightest is it either of these. Retail stores can do what they want.
Are Kindle books on Apple Store? I don't think so.
And tehy're are there because Apple has guidelines about free and pay apps.
I think you need to rethink things a bit.
No, you didn't. I was asking about which infrastructure was used, no which OS was used or who owns the OS?
Yes but the "anti-competitive" crap being thrown around here doesn't apply.
http://en.wikipedia.org/wiki/Competition_law
You mean like they do on the xBox?
That would be because they are a monopoly. There are different rules for monopoloies that for everyone else. What is illegal for a monopoly is not illegal for everone.
I always thought Apple would back down on the subscriptions and they did. I expect them to back down even more if the content providers keep pushing. Apple needs the content providers much more than they need Apple, especially now. If iOS ends up as the only device without Amazon books, Netflix, HULU etc, people will buy an Android device even if they wanted an iOS device.
Put simply, content is king.
Put simply, content is king.
The OS is definitely part of the infrastructure used to deliver the content to the device.
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_3 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8J2 Safari/6533.18.5)
The thing I don't understand about this argument is this: Apparently Apple owning iOS means that if I download a 3rd-party application through Apple's mechanism for downloading applications on their operating system (ie the App Store), Apple is somehow entitled revenue when I conduct an economic transaction within that third-party application and only with/between that third-party, because Apple gave them the benefit of distributing the original 3rd-party application in the App Store. Yet, if I download or buy an application from a 3rd party on Apple's mechanism for accessing acquiring applications over the Internet on a regular pc (ie downloading an application through Safari on OSX) or the same from Microsoft (downloading an application through IE on Windows), then the OS company isn't entitled revenue from the third-party transaction. (of course this is changing with the advent of the Mac App Store and Lion, but you can still access apps through the Internet on Safari and other web browsers, to be installed in the OS, whereas on an iOS device, you have to go through Apple's official mechanism of the App Store, as far as I know).
I just don't understand how it was found anti-competitive back in the day for MS to only offer IE pre-installed on a Windows PC, and yet today Apple can lock down iOS devices and set all the rules for dealing with applications installed on their devices to their hearts content. I really enjoy Apple and iOS devices, but I'm just so curious if anyone can explain the legal distinctions to me. Thanks!
BaldiMac said:
The thing I don't understand about this argument is this: Apparently Apple owning iOS means that if I download a 3rd-party application through Apple's mechanism for downloading applications on their operating system (ie the App Store), Apple is somehow entitled revenue when I conduct an economic transaction within that third-party application and only with/between that third-party, because Apple gave them the benefit of distributing the original 3rd-party application in the App Store. Yet, if I download or buy an application from a 3rd party on Apple's mechanism for accessing acquiring applications over the Internet on a regular pc (ie downloading an application through Safari on OSX) or the same from Microsoft (downloading an application through IE on Windows), then the OS company isn't entitled revenue from the third-party transaction. (of course this is changing with the advent of the Mac App Store and Lion, but you can still access apps through the Internet on Safari and other web browsers, to be installed in the OS, whereas on an iOS device, you have to go through Apple's official mechanism of the App Store, as far as I know).
I just don't understand how it was found anti-competitive back in the day for MS to only offer IE pre-installed on a Windows PC, and yet today Apple can lock down iOS devices and set all the rules for dealing with applications installed on their devices to their hearts content. I really enjoy Apple and iOS devices, but I'm just so curious if anyone can explain the legal distinctions to me. Thanks!
It's an unfortunate compromise, but I see both sides of argument here.
Hulu cannot afford to give away 30% of it's subscription revenue, it's not profitable that way.
But, from Apple's perspective, we are talking about someone who was NOT a Hulu plus subscriber, and only wanted to become one AFTER they started using an app downloaded through the Apple App Store on an Apple device, using Apple-provided in-app purchase APIs and infrastructure. So if you're Apple, your thinking hey, we brought you a customer, you're using our payment system, we deserve a cut. Not to mention, these services are directly competing with iTunes for content dollars; Apple would literally be insane to let them do this for free.
30% seems high to me but I'm not in the business. I suspect only high-profile services with established customer bases will be able to get away with not having an in-app subscription option. Having an app in the App Store gets you access to 100+ million iOS users, the business model for iOS content is low margins and high volume.
The big problem that content middle-men like Netflix and Hulu have is that an additional subscriber has a much larger marginal cost to them, because they have to turn around and pay the studios and networks. Contrast to a newspaper or magazine buyer, the additional subscription costs the publisher basically nothing (just bandwidth really), so they're more inclined to let Apple take 70% rather than nothing.
Anyways, the stakes here are huge. Apple created the iPod, a device people loved and wanted to use to listen to their music. They leveraged this into iTunes store, and now they are the largest music retailer in the world. With the iPad, they are going for world domination - they want to become to movies, tv shows, books, magazines, and newspapers what they already are for music.
Hulu cannot afford to give away 30% of it's subscription revenue, it's not profitable that way.
But, from Apple's perspective, we are talking about someone who was NOT a Hulu plus subscriber, and only wanted to become one AFTER they started using an app downloaded through the Apple App Store on an Apple device, using Apple-provided in-app purchase APIs and infrastructure. So if you're Apple, your thinking hey, we brought you a customer, you're using our payment system, we deserve a cut. Not to mention, these services are directly competing with iTunes for content dollars; Apple would literally be insane to let them do this for free.
30% seems high to me but I'm not in the business. I suspect only high-profile services with established customer bases will be able to get away with not having an in-app subscription option. Having an app in the App Store gets you access to 100+ million iOS users, the business model for iOS content is low margins and high volume.
The big problem that content middle-men like Netflix and Hulu have is that an additional subscriber has a much larger marginal cost to them, because they have to turn around and pay the studios and networks. Contrast to a newspaper or magazine buyer, the additional subscription costs the publisher basically nothing (just bandwidth really), so they're more inclined to let Apple take 70% rather than nothing.
Anyways, the stakes here are huge. Apple created the iPod, a device people loved and wanted to use to listen to their music. They leveraged this into iTunes store, and now they are the largest music retailer in the world. With the iPad, they are going for world domination - they want to become to movies, tv shows, books, magazines, and newspapers what they already are for music.
The OS is definitely part of the infrastructure used to deliver the content to the device.
Ohh, pushing the meaning of words?