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

lPHONE said:
can someone summarize this thread?
Click to expand...

Fandroids ..
Apple is this super evil villian company. They are just greedy and try to push competitor from iOS. Amazon, Netflix and co. are working on super tiny margins because they only care about the customers.

Fanboys ..
Amazon, Netflix and co are parasites, getting free rides on Apples back. Apple is only defending its own shop and rights and Amazon and Netflix should get their business model right.

And a few opinions in between ..

(it is been fun though)
 
ten-oak-druid said:
I think it is a good idea to have the agencies look into this now. It needs to be cleared up one way or the other. It is a new market and it doesn't do any good to have this issue linger.

To say there is nothing to look into is absurd. It matters not, what side of the issue you are on, it should be obvious this needs to be considered by regulatory agencies.
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Not really. If you understand how business works, and what Apple is doing here, and what the US regulators do, there really is nothing for them to look into in this issue.

As for Europe, who knows, they are crazy. But there is not going to be anything to come of this in the US, because it doesn't fall under their jurisdiction in terms of what is happening, plus the US Government has never been involved in telling a retailer what they can sell in their own stores. If you can't see that, well then you don't understand what is going on.

Apple could have unfair and uneven policies for allowing apps in the app STORE, and the government still wouldn't have any grounds to do anything. The fact that they are applying the same standards to everyone though, just means any US government official saying they are "looking into it" is just posturing and responding to a media members question. That is what they always say. It does not mean there is any validity to the actual issue at all.

I don't think most of you understand the repercussions of the government being able to force retailers to carry products in their store they do not want to carry or who do not meet their standards or guidelines for being in the store. Even if say the FTC made some kind of judgement against it, legislation would come up and squash it so fast as to make it meaningless. It is never going to happen.

Heck Amazon would fight against any kind of ruling that forced Apple to carry the Kindle App for free. Which is what some of you are asking for here, essentially.
 
AaronEdwards said:
So, any guesses about WHY they didn't do it from the START?
Why would Apple say no to their 30%?
Why would Apple allow these companies to "CIRCUMVENT" and be "FREELOADERS"?

But then the answer is obvious, isn't it?
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Yeah they were not ready with subscription pricing for their internal systems, and had to work it out and decided to tie it in once they were in a position to offer more content that actually would use subscription pricing.

It is pretty clear.

Apple never told these companies to give away their apps for free and make money by using Apple's App Store and resources for free. Those companies chose to do that.

There should be no sympathy given to them at all. They made their own beds. And as has been noted by others, this only impacts distributors/middlemen. So Apple wants more content creators to come directly to the App Store. Ultimately that is a good thing for consumers because it does mean lower prices.
 
ictiosapiens said:
So you are saying, that every Record Label, Publisher, Distributor, etc, should pack in and close shop, because the only way to make profits in this future of yours, is for the content creator to sell directly to the consumer?

Have you any got any idea, of the investment necessary to produce content and market it? Specially during this transitional period where you have to continue producing both physical media as well as digital...

IT IS NOT GOING TO HAPPEN in an instant just because Apple decided it was "The Time". At the moment, there are alternatives for this "Obsolete" businesses, and they will use them, at the detriment of Apple.

What can I say man? You live way further into the future than I do...
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You clearly did not understand what he was saying. He was talking about content resellers and distributors. A publisher is not a reseller, they are the seller. The people who create and sell the content can make a ton of money with Apple's model because in most all cases it is less expensive then going the way they have been going over the years.

If a wholesaler/distributor adds no value to the product chain and just increases the prices of things, yes they are going to get cut out... That is the fault of their own business model. Middle men companies exist in business because of inefficiencies in the supply chain, which allows them to fill a gap, and still make money.

Apple's model takes a lot of that inefficiency away, which means those middle man businesses which relied on it to make their money are SOL.

So if the record label, movie studio, game creator or anyone else wants to go directly to Apple with their product they can, and they will end up making more money. If they want to go to a traditional wholesaler or re-distributor, that company is not likely to make money going to the App Store. So ultimately the content creators who want their products sold will go to Apple directly, because they will often be paying less of the pie to Apple than they currently do to wholesalers and resellers.

Ultimately all this is is a supply chain correction, and consider it a game of musical chairs. Now the guy in the middle has no place to sit because he offers no value and just makes everything more expensive.

If companies currently doing the aggregating and distribution don't have sufficient business models to let them thrive in this environment they will end up suffering. They will either be replaced by content creators going directly to Apple and other retailers like them, or else they will be replaced by a new breed of middlemen distributors whose business model allows them to thrive in this new configuration.

In many cases these are businesses apple are already in or will expand into as well so there will be comparable and affordable services offering similar things of value.

I don't think people realize how much tv show purchases and music purchases would be if it were not for Apple. It would be significantly more expensive then it is now.
 
marksman said:
Yeah they were not ready with subscription pricing for their internal systems, and had to work it out and decided to tie it in once they were in a position to offer more content that actually would use subscription pricing.

It is pretty clear.

Apple never told these companies to give away their apps for free and make money by using Apple's App Store and resources for free. Those companies chose to do that.

There should be no sympathy given to them at all. They made their own beds. And as has been noted by others, this only impacts distributors/middlemen. So Apple wants more content creators to come directly to the App Store. Ultimately that is a good thing for consumers because it does mean lower prices.
Click to expand...

And once again.
Apple has total control over which apps get allowed into the AppStore.
These apps were approved by Apple.
But it was their fault somehow.

Love your logic. Rather faulty, but fun.
 
AaronEdwards said:
And once again.
Apple has total control over which apps get allowed into the AppStore.
These apps were approved by Apple.
But it was their fault somehow.
Click to expand...

I've been trying to go back and figure out where this argument started, so forgive me for asking. Why does this matter if Apple changed the terms or had the terms from the beginning?
 
BaldiMac said:
I've been trying to go back and figure out where this argument started, so forgive me for asking. Why does this matter if Apple changed the terms or had the terms from the beginning?
Click to expand...

Some seem to have the idea that these companies "circumvented" something and that they have been "free loaders" and that it was all their fault.

Apple has totalt control of the AppStore. Apple let them in. And it did it because those apps would make people buy the iPhone and the iPad. And now Apple is changing the rules.

Apple could have refused those apps. Apple could have demanded the AppleTax from day one. It did neither.
 
AaronEdwards said:
Some seem to have the idea that these companies "circumvented" something and that they have been "free loaders" and that it was all their fault.

Apple has totalt control of the AppStore. Apple let them in. And it did it because those apps would make people buy the iPhone and the iPad. And now Apple is changing the rules.

Apple could have refused those apps. Apple could have demanded the AppleTax from day one. It did neither.
Click to expand...

Yeah. That's what you keep saying. And the other guy keeps saying the other side. My question was, why does any of that matter?

Apple could have done it differently. They didn't. Amazon made a bet on iOS. If all the doom and gloom is to be believed, it was a bad bet. Probably doesn't cost them much in development costs. Just iOS customers. Apple will lose some customers if Kindle leaves the iPad. Sucks for Kindle users that have iPads.

And FWIW, AppleTax? Seriously? We don't have to revive Microsoft marketing buzz words every time Apple charges more than we like.
 
marksman said:
You clearly did not understand what he was saying. He was talking about content resellers and distributors. A publisher is not a reseller, they are the seller. The people who create and sell the content can make a ton of money with Apple's model because in most all cases it is less expensive then going the way they have been going over the years.

If a wholesaler/distributor adds no value to the product chain and just increases the prices of things, yes they are going to get cut out... That is the fault of their own business model. Middle men companies exist in business because of inefficiencies in the supply chain, which allows them to fill a gap, and still make money.

Apple's model takes a lot of that inefficiency away, which means those middle man businesses which relied on it to make their money are SOL.

So if the record label, movie studio, game creator or anyone else wants to go directly to Apple with their product they can, and they will end up making more money. If they want to go to a traditional wholesaler or re-distributor, that company is not likely to make money going to the App Store. So ultimately the content creators who want their products sold will go to Apple directly, because they will often be paying less of the pie to Apple than they currently do to wholesalers and resellers.

Ultimately all this is is a supply chain correction, and consider it a game of musical chairs. Now the guy in the middle has no place to sit because he offers no value and just makes everything more expensive.

If companies currently doing the aggregating and distribution don't have sufficient business models to let them thrive in this environment they will end up suffering. They will either be replaced by content creators going directly to Apple and other retailers like them, or else they will be replaced by a new breed of middlemen distributors whose business model allows them to thrive in this new configuration.

In many cases these are businesses apple are already in or will expand into as well so there will be comparable and affordable services offering similar things of value.

I don't think people realize how much tv show purchases and music purchases would be if it were not for Apple. It would be significantly more expensive then it is now.
Click to expand...

I see where you are coming from, that's a good argument.

The problem that I have with it as a user, is that this strategy, will cause one of three things, 1- Amazon leaves iTunes, which renders my ebook purchases useless, 2- They stay, but jack up the prices across all platforms, which well, wouldn't be great. And 3- Apps start migrating to other platforms, which makes me migrate, which turns my investment in iTunes apps, into hdd wasted space.

If Amazon was forced to leave the app store due to the new fees, wouldn't there be grounds for a class action suit from consumers who purchased a product because of certain features, only for those features to be later disabled?
 
marksman said:
Not really. If you understand how business works, and what Apple is doing here, and what the US regulators do, there really is nothing for them to look into in this issue.
Click to expand...

In your opinion.

Lets have it looked at and the decision explained by the regulatory agencies.
 
I think this is a first-step move for Apple to unify (aka LOCK) it's payment system for when it launches it's NFC "mobile phone wallet" system.

You wanna accept payments from an iPhone? Fine, but you're paying OUR merchant fees.

Bank of Apple? No thanks.
 
BaldiMac said:
Yeah. That's what you keep saying. And the other guy keeps saying the other side. My question was, why does any of that matter?

Apple could have done it differently. They didn't. Amazon made a bet on iOS. If all the doom and gloom is to be believed, it was a bad bet. Probably doesn't cost them much in development costs. Just iOS customers. Apple will lose some customers if Kindle leaves the iPad. Sucks for Kindle users that have iPads.

And FWIW, AppleTax? Seriously? We don't have to revive Microsoft marketing buzz words every time Apple charges more than we like.
Click to expand...

It matters because that is an example of predatory pricing. They did it to get themselves lock in and then beable to grab the makers by the balls so to speak because if it was there from day 1 they would of sad go pound sand to Apple.
Now Apple is abusing its power and we the consumer loose out big time. Either prices go up across the board. They pull it from Apple and because of the lag time no one else made something to fill the void. Basically no matter how you cut it the consumer looses.
 
AaronEdwards said:
So, at least Apple promises to post a notice first.

And

Apple facing class action suit over iOS data collection.
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And

Apple says iPhone apps "cannot transmit data about a user without obtaining the user's prior permission and providing the user with access to information about how and where the data will be used." Many apps tested by the Journal appeared to violate that rule, by sending a user's location to ad networks, without informing users. LINK

So they violated the rules and now risk getting booted from the store. Genius!
 
Oletros said:
No, is not splitting hairs.

May Apple take a 30% of Toodledo or Remember the Milk subscriptions, may Apple take a 30% of Best Buy purchases through their app?
Click to expand...

I think magazine and newspaper subscriptions are one thing and your cited examples are another completely.

Q. How do you think newspaper stands operate?
 
marksman said:
Yeah they were not ready with subscription pricing for their internal systems, and had to work it out and decided to tie it in once they were in a position to offer more content that actually would use subscription pricing.

It is pretty clear.
Click to expand...

+1

marksman said:
Apple never told these companies to give away their apps for free and make money by using Apple's App Store and resources for free. Those companies chose to do that.
Click to expand...

+2

Based on the number of new magazine subscriptions I now have (ex. The Economist, Esquire, MacWorld, Popular Science) that I didn't before because I avoid the clutter and waste produced by paper products, I'd say publishers should be happy. Ten years of Microsoft failing to deliver a successful tablet, and Apple hits it out of the park their first try thus creating a successful model to rescue periodicals. Thank you, :apple:.
 
OllyW said:
But if the company has to increase the price by $5 to make it commercially viable to sell through the app it means they will also have to increase the price by $5 on the web site. I'm struggling to see how this is pro-consumer?
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Because you are still the one making a free choice. You don't have to weigh a higher price against your choice of payment. You will be equally screwed by a company that uses this policy as an excuse to raise prices.
 
Iin the end, this is something of a game of chicken. The only players that can really afford a private payment system are the big guys like Netflix, Sony, Amazon. They have hundreds of users already in their system that will likely stay in that system.

So the question becomes, do they play ball with a system that will likely have a negligible effect on their profits or walk away and risk tons of negative PR. Particularly folks like Netflix who have their software on several non iOS devices that won't be able to validate using itunes accounts, thus enticing website sign ups for those with a variety of systems.
 
charlituna said:
Because you are still the one making a free choice. You don't have to weigh a higher price against your choice of payment. You will be equally screwed by a company that uses this policy as an excuse to raise prices.
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It's not an excuse to raise prices if they have to raise the prices to stay in business.

Apple operate with an average net profit rate of around 25% so they could not cope with a sudden 30% overhead. Why do you expect other companies to just swallow this 30% and charge the exactly the same price?
 
OllyW said:
IApple operate with an average net profit rate of around 25% so they could not cope with a sudden 30% overhead. Why do you expect other companies to just swallow this 30% and charge the exactly the same price?
Click to expand...

But Apple, like every other company in the real world does not get access to market for free. It has to build stores, and share revenues. It pays its dues.

There's no such thing as a free lunch.

C.
 
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