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

FriarNurgle said:
You can buy a subscription for Pandora or Slacker through the app or on the web... but guess what? They are the same price. That's all Apple is requesting, that non iOS app prices are not lower.

Any why would these companies want to charge less than the in app price?
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Firstly. They aren't requesting. They are demanding. Secondly margins are very thin for services such as Pandora or Netflix.

So Netflix charges 9.99/month.

If bought through Netflix via the web it's 9.99/month.
If bought via App then its still 9.99/month, but Netflix has to give up 30% to Apple.

Which means Netflix won't be making any profit via the App.

This means that the Netflix app will be pulled from the App Store.

This means the customer loses.
 
BaldiMac said:
Apple doesn't dictate what another company charges on their own website. They only dictate the price in their own store. They are not willing to sell content that is available at a lower price somewhere else. Nothing illegal. Happens all the time with businesses that have sufficient purchasing power.

That's said, I disagree with the amount of the commission for certain types of content, and their obvious attempt to push an app like Kindle out of the App Store.
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Great, so have an "instant rebate" on your own site and charge 30% less. Apple doesn't have any rules on instant rebates do they?
 
thunderclap said:
But it's the manufacturer "suggesting" the price, not the distributor. Apple is the distributor here.
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How is that an issue? If I sell your product, then I find out that you're undercutting me through other channels, I'm legally entitled to take my ball and go home. That's why manufactures with direct sales web-sites always sell current product at strictly MSRP. They may bend the rules a little with free shipping or whatever, but they never undercut their channel partners.
 
Popeye206 said:
As a consumer... you do realize that many people in distribution get their "share" in the sale of a product or even in subscriptions. Like Publishers Clearing House does when they sell a subscription for X Magazine. Just because this one is being talked about or exposed now it's outlandish. Silly.
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Talking about silly.... Let's say you run a music subscription service and your margin is 0.5% per monthly subscription. How will you give Apple 30% if what you're making is only 0.5% of the end price?

They've actually shut out all reseller subscription businesses like Spotify, Rhapsody, etc.
 
RalfTheDog said:
Here is the real problem,

Many app designers have been working on low margin high volume applications. Here is an example:

Company X wants to sell pictures of marmot jugglers. They are required to pay $1 per picture sold to the marmot handlers association. They know, people who are into marmot juggler pictures will not pay more than $1.05. This is not a problem because there are billions of people who want to look at marmot jugglers on their iPhones.

Under the new rules, They must charge $1.35 for each picture. The market just dissipated in a rapidly expanding ball of marmot fluff.

Apple must make it's money from subscriptions. Making money is why every company exists. Apple can not let developers bypass the subscription system. All that said, I think Apple needs to find a better way to do this.
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Sorry to nitpick, but they would still lose $0.055 on each picture sold at $1.35.

They would need to sell them at $1.50 to maintain the same profit margin.
 
deadkennedy said:
Talking about silly.... Let's say you run a music subscription service and your margin is 0.5% per monthly subscription. How will you give Apple 30% if what you're making is only 0.5% of the end price?

They've actually shut out all reseller subscription businesses like Spotify, Rhapsody, etc.
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If they are in direct competition with these services and the new TOS puts these services out of business, Apple could face legal issues. Not that the RIAA and MPAA have not been using anticompetitive practices for years.
 
WiiDSmoker said:
Firstly. They aren't requesting. They are demanding. Secondly margins are very thin for services such as Pandora or Netflix.

So Netflix charges 9.99/month.

If bought through Netflix via the web it's 9.99/month.
If bought via App then its still 9.99/month, but Netflix has to give up 30% to Apple.

Which means Netflix won't be making any profit via the App.

This means that the Netflix app will be pulled from the App Store.

This means the customer loses.
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Well you still have the iTunes to buy movies and music dontcha? Who needs Pandora, Spotify, Netflix, Rhapsody,...
 
Kenrik said:
Question is... ? why don't they go after Sony for the PS3 or Microsoft for the Xbox not allowing ANY SERVICE/APP/FEATURE. Will Sony Allow iTunes on the PS3?? Nope. It would hurt their PSstore.

I don't think they can pick and choose who they go after.
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The PS3 has Netflix, VUDU, HULU and they updated the browser to let you use PANDORA on it - you can also stream your itunes music library to it.
 
FriarNurgle said:
And that is why Rhapsody will continue to fail.
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Yes, the Walmart pitch: "You can sell your product to us at no profit and stay in business for maybe five years, or you can sell nothing and go out of business within the next six months." Apple however is not Walmart. Rhapsody can fail happily on their own time, they don't need Apple to speed them along.
 
RalfTheDog said:
If they are in direct competition with these services and the new TOS puts these services out of business, Apple could face legal issues. Not that the RIAA and MPAA have not been using anticompetitive practices for years.
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It will not put them out of business, it will put them out of Apple platform. They still have desktop apps and non-fascist mobile platforms where they can sell.

It would be stoopid of Apple, but I think they might actually want this and introduce their own music and movie streaming service through iTunes / MobileMe.
 
deadkennedy said:
Talking about silly.... Let's say you run a music subscription service and your margin is 0.5% per monthly subscription. How will you give Apple 30% if what you're making is only 0.5% of the end price?
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How do they pay commissions on all the referrals that they receive from companies other than Apple? How do they pay for advertising?

They've actually shut out all reseller subscription businesses like Spotify, Rhapsody, etc.
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Probably. I'm on the fence as to whether that is a bad thing.
 
WiiDSmoker said:
Firstly. They aren't requesting. They are demanding. Secondly margins are very thin for services such as Pandora or Netflix.

So Netflix charges 9.99/month.

If bought through Netflix via the web it's 9.99/month.
If bought via App then its still 9.99/month, but Netflix has to give up 30% to Apple.

Which means Netflix won't be making any profit via the App.

This means that the Netflix app will be pulled from the App Store.

This means the customer loses.
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OR it means Netflix raises there prices across the board: iOS, their site, etc. Some estimates I've read prices could increase by as much as 43% to compensate for Apple's cut.
 
RalfTheDog said:
Don't forget, many of the people on this board are developers. Many of the people on this board are seeing a years worth of work and seven digits of development expenses disappear in a flash over this.
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I can definitely see this from a subscription app developer but how many of those are on here? 30% is a bit much but i know what there getting at.
 
Why oh why oh why do people think this is illegal? Just because you don't like it, and because the big media companies are moaning about it, doesn't make it illegal. They're only moaning about it because they want access to those 14 million iPad users to sell them their stuff.

...subscription music services appear to be the most vocal opponents at this point, arguing that their slim profit margins simply won't allow them to give Apple a 30% cut of their revenue.
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Oh booo hooo. Cry me a ****ing river. Take your app off the platform then and stop complaining. Don't go complain to the courts, use your business power to not do business on the system that doesn't suit you.
 
OllyW said:
So you can't like Apple products without agreeing 100% with everything the company does?
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Come on, the tone of your disagreement sounds as if you want to tear down the walls of the Apple Cupertino campus....Geeze! It's hard to see your appreciation of Apple through your venom.
 
deadkennedy said:
It will not put them out of business, it will put them out of Apple platform. They still have desktop apps and non-fascist mobile platforms where they can sell.

It would be stoopid of Apple, but I think they might actually want this and introduce their own music and movie streaming service through iTunes / MobileMe.
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This however *would* put Apple on the wrong side of anti-trust law if the iOS platform continues to thrive. They aren't that stupid, and with Steve doing less of the day to day ranting, I don't think they are that reckless either.

If it could be shown that the only effect of the new system is to price products that compete against Apple's iTunes store (music/movies/books) up beyond what Apple charge, then Apple are going to get slapped. Especially in the area of music. There they'll get slapped hard.
 
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