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U.S. and European Regulators 'Looking At' Apple's App Store Subscriptions Program

here's what irks me. i work for an software company that has recently had me develop modules (per our customer's requests) that we planned to offer to them through the app store. BUT, since our software carries a yearly maintenance agreement AND that can be paid for on our webpage, Apple has informed me that our apps must include an in-app option for users to pay their yearly maintenance. I was told it was considered a "subscription".
Our maintenance agreements are $1500+/company depending on how many users they have. Yes, I understand that Apple is hosting the app that WE made, but how the duck does that entitle them to potentially $500 for each of our users?!?!
Needless to say, I've wasted my time developing the apps (at least whatever parts we can't port to Android)
:mad:

(but to be fair, this was one of their developer phone reps that told me this and we are still seeking clarification from a (hopefully) more knowledgable person)
 
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No sympathy for Apple, I like Apple but I could never love them nor others like Dell G.E. etc. If Apple wins the'll have more 12 year olds working for them.
 
I'm wondering how long it will take Apple to bring this set of rules "Back to the Mac" with the MAS? Looking forward to the MAS failure when thet try to implement these new rules. ;)

Ps. I guess I can kiss an iOS version of MLB At-Bat 2011 goodbye. :(

GL
 
The sky is not falling.

This will be better for consumers who will get a smoother buying experience, and not have their personal details sold-off to advertisers.

This will be better for almost every publisher, who will receive bigger revenues, and access to a large, active and very well-heeled audience.

It's worse only for the middle men. Those companies who re-sell other people's content and expect the app store to do it for free. For them, this is bad news.

C.
 
Carniphage said:
The sky is not falling.

This will be better for consumers who will get a smoother buying experience, and not have their personal details sold-off to advertisers.

This will be better for almost every publisher, who will receive bigger revenues, and access to a large, active and very well-heeled audience.

It's worse only for the middle men. Those companies who re-sell other people's content and expect the app store to do it for free. For them, this is bad news.

C.
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Netflix, Spotify, Pandora are middle men?

Amazon is middle men? I think the one who wants to be middle men is Apple and take a cut

And they don't expect to do it for free, the app store does nothing for them

I can understand why people is so blind regarding Apple
 
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Oletros said:
Netflix, Spotify, Pandora are middle men.

Amazon is middle men? I think the one who wants to be middle men is Apple and take a cut

I can understand why people is so blind regarding Apple
Click to expand...

If you own content - and want to get it on the Kindle. You should sell it to Amazon. Amazon has built designed and sold a collection of fine electronic book readers. They have invested heavily in creating the device and deserve to benefit from it.

But If you own the rights to a book and want to get it onto the iPad, you might get a better deal selling it directly on the app store. Amazon in this case is a middle man, and unlike with the Kindle reader, should not be able to get a free ride.

C.
 
Carniphage said:
If you own content - and want to get it on the Kindle. You should sell it to Amazon. Amazon has built designed and sold a collection of fine electronic book readers. They have invested heavily in creating the device and deserve to benefit from it.

But If you own the rights to a book and want to get it onto the iPad, you might get a better deal selling it directly on the app store. Amazon in this case is a middle man, and unlike with the Kindle reader, should not be able to get a free ride.

C.
Click to expand...

Which free ride? They don't have any free ride, they have paid Apple

And they are not selling through the app store, they are selling through Amazon servers.

Is spotify a middle man?
 
Oletros said:
Which free ride? They don't have any free ride, they have paid Apple
Click to expand...
How? The $99 developer fee? That doesn't cover the costs of XCode, never mind the submissions processing. Try submit a game to Sony and see how much it really costs.

Oletros said:
And they are not selling through the app store, they are selling through Amazon servers.
Click to expand...
If their content is consumed on the iPad then it means that they don't have to design, build and sell their own device. They are getting a free ride.

Oletros said:
Is spotify a middle man?
Click to expand...
Do they own content?

C.
 
Carniphage said:
This will be better for consumers who will get a smoother buying experience, and not have their personal details sold-off to advertisers.
Click to expand...

Will it be better for consumers if the likes of Netflix, Spotify, Pandora and Kindle are forced to leave iOS or have to increase their prices to allow for Apple's 30% cut?
 
It's about time someone looked at the nefarious actions of Apple.

Too bad nothing will come of it, when your Steve Jobs, there's no one you can't pay off.
 
OllyW said:
Will it be better for consumers if the likes of Netflix, Spotify, Pandora and Kindle are forced to leave iOS or have to increase their prices to allow for Apple's 30% cut?
Click to expand...

That's a good question. But my guess is that most vendors will work to stay. Leaving the app store would cost them even more.

But even if some vendors leave, the content they resell will stay.

If you own content, then not having it on the iPad is nuts. It's kissing money goodbye. In fact I think this move will encourage more publishers to move to the iPad. Which in turn will bring more content to iPad users.

C.
 
Carniphage said:
Can you provide a concrete example?

C.
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Amazon, Netflix, Pandora and Rhapsody will all lose money on every single transaction they make under this system.

Indeed, everybody who sells ebooks would, since the standard agency model split is 70/30 between the publisher and distributor. Any e-book seller must therefore pay out 100% of their revenue from every sale to third parties, and they must the pay support and transactional costs. Hence losing money on every single sale.
 
Carniphage said:
That's a good question. But my guess is that most vendors will work to stay. Leaving the app store would cost them even more.
Click to expand...

I think the straight 30% fee is the big problem. I don't see a problem with Apple taking a handling fee for processing in-app subscriptions but that is a huge cut in income for the companies in question. For some, the only way they will be able to stay in is to jack up to prices to compensate. :(
 
The Phazer said:
Amazon, Netflix, Pandora and Rhapsody will all lose money on every single transaction they make under this system.

Indeed, everybody who sells ebooks would, since the standard agency model split is 70/30 between the publisher and distributor. Any e-book seller must therefore pay out 100% of their revenue from every sale to third parties, and they must the pay support and transactional costs. Hence losing money on every single sale.
Click to expand...

Amazon's model is a lot more complicated than that. And often Amazon net a 50% or greater share.

Amazon as well as other re-sellers have the option of re-negotiating their contracts and re-partitioning the revenue share.

Remember that ebooks have no intrinsic value. So to to publishers, selling fewer copies is going to lose them money. They may prefer to remain selling more copies for a reduced cut.

Every publisher only really cares about the total revenue. Put simply, 70% of a very large pie is more than 100% of a much smaller pie.

C.
 
OllyW said:
I think the straight 30% fee is the big problem. I don't see a problem with Apple taking a handling fee for processing in-app subscriptions but that is a huge cut in income for the companies in question. For some, the only way they will be able to stay in is to jack up to prices to compensate. :(
Click to expand...

I suspect that behind closed doors, the 30% headline rate is a baseline for negotiation.

Remember that the 30% is not charged for handling processing, or running servers. The 30% is being charged for access to the customers. That sort of cost is cheaper than many other forms of distribution, including Amazon.


C.
 
Carniphage said:
I suspect that behind closed doors, the 30% headline rate is a baseline for negotiation.

Remember that the 30% is not charged for handling processing, or running servers. The 30% is being charged for access to the customers. That sort of cost is cheaper than many other forms of distribution, including Amazon.


C.
Click to expand...

No matter what they charge, if it's a substantial amount then I can only see it being passed on to the consumer.
 
OllyW said:
No matter what they charge, if it's a substantial amount then I can only see it being passed on to the consumer.
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We will see. But if the market for this kind of content grows as much as I think it is going to grow, I think we will see the exact opposite.

Prices are set by markets, not by companies. Companies are compelled to set a price point that maximises revenue.

Look at game prices on the app store as an example.

C.
 
Carniphage said:
That's a good question. But my guess is that most vendors will work to stay. Leaving the app store would cost them even more.

But even if some vendors leave, the content they resell will stay.

If you own content, then not having it on the iPad is nuts. It's kissing money goodbye. In fact I think this move will encourage more publishers to move to the iPad. Which in turn will bring more content to iPad users.

C.
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You mean all those content owner that didn't strike a deal with Apple and iBooks til now, or all the movie industry that has just been held back by a problematic billing system or the music industry .. any of those is going to come to iOS now, because of this ridiculous subscription service?

I don't think so. Especially the movie and music industry have in the past been working mostly against Apples dominance in the digital sector .. there is no way they are jumping on board now. For all we know has Apple been working hard to get more books and magazine to come to iOS and iBooks. I don't think it was a problematic middleman holding anyone back. They just don't like Apples terms and lets face it, the terms didn't get any better for them now.

This move is not benefiting the customer at all and I am baffled that anyone would actually think that. The only positive thing for the customer is possibly that one click less to get the subscription going. Somebody will have to pay Apple and guess who is that going to be in the long run .. the customers. Every company has to balance their accounts eventually and then these 30% that are now Apples have to be found somewhere. They may take a part of it .. but the largest part will be passed on to the customers. How is that benefiting the customer again? Probably less, but more expensive content.

T.
 
Carniphage said:
How? The $99 developer fee? That doesn't cover the costs of XCode, never mind the submissions processing. Try submit a game to Sony and see how much it really costs.
Click to expand...

So, they can start to make the developers pay for the hosting and bandwidth associated with their apps.

XCode has been given away even before the App Store existed, so it's not a point.

Carniphage said:
If their content is consumed on the iPad then it means that they don't have to design, build and sell their own device. They are getting a free ride.
Click to expand...

So, Sony can get a cut of every iTunes purchase made on a Sony Vaio, the same for Dell, isn't?


Carniphage said:
Do they own content?

C.
Click to expand...

Does Apple own or EVEN, store and distribute the content?
 
OllyW said:
Yes, we will see.

It's got to get past the regulators first so some aspects may have to change before it's implemented in June.
Click to expand...

There's nothing for the regulators.

Are Amazon going to be investigated for failing to open their Kindle to rival booksellers.? Should Microsoft be investigated for wanting a 70% share from XBLA games. Should Sony allow rival games platforms to come to the PS3 for free?

C.
 
tatonka said:
You mean all those content owner that didn't strike a deal with Apple and iBooks til now, or all the movie industry that has just been held back by a problematic billing system or the music industry .. any of those is going to come to iOS now, because of this ridiculous subscription service?
Click to expand...
No. They are going to come because the terms are advantageous and they want to get access to the 45million iPad customers, and who knows how many iPod and iPhone users.

tatonka said:
I don't think so.
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You don't understand publishers then. They all understand that 70% of a lot is worth a lot more than a 100% of nothing at all.

C.
 
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