Apple launches in-app Subscriptions…

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    Posted: 16 February 2011 04:32 AM #31

    Mr. Weintraub (conveniently, perhaps) completely ignores that Apple will NOT prevent, and could never prevent, the solicitations of subscriptions from outside the app!  The choice just has to be offered to users within the app.

    Now, the logistics of how one manages in-app and out-of-app subscriptions is another matter (should be easy enough for developers, though), but the fact that certain key facts are omitted…well, what else is there to say.  It’s partly why my contempt and distrust of media rises each passing day.

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    Posted: 16 February 2011 05:06 AM #32

    A follow-up by the same author of Apple is either: brilliant, brazen, or batsh*t crazy, basically reporting how all the dumies out there are calling Apple “evil” for having the temerity of not giving away its one-click access to 100 million credit cards:

    The Simple (And Perhaps Harsh) Reality Of Apple?s Ecosystem

    Apple is betting that the allure of being tied into their incredibly efficient iTunes payment ecosystem (along with its 100 million + accounts tied to credit cards) will outweigh the downside of having to pay them a 30 percent fee. The same 30 percent fee they currently take from the thousands of app developers collectively making billions of dollars off of the App Store. And the same 30 percent fee they currently take for all other types of in-app purchases.

    You don?t hear those developers complaining about Apple?s cut. But this situation is different because it?s a de-facto change in policy. Actually, wording in their app guidelines has suggested for some time that Apple would move to filter all purchases made on their iOS devices through their in-app payment system. They just hadn?t enforced it until now.

    It seems to be human nature - at least American human nature - that once people “get” something, they quickly think it is a constitution right to get it (which is why Obamacare must be killed in its crib, before it starts handing out candy, or it will be too late, and why the longer people squat in a house they have defaulted on are harder to evict as more time passes, but I digress). I’ve long said, if the US government started a program where it handed out a sack of jellybeans on the first of every month, if they eventually tried to cut it, people would be screaming “WHERE ARE MY GODDAMN JELLY BEANS! IT’S MY RIGHT!!!”

    Apple’s mistake, or, if this was an intentional delay of rule enforcement to set a trap, Apple’s hurdle, is the Free Jelly Bean Program problem. These publishers got a free ride for a while and they think it’s owed to them? What curious thinking. Then again, a lot of Americans (and a lot of Europeans also) think someone else owes them something.

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  • Posted: 16 February 2011 07:44 AM #33

    Tetrachloride - 16 February 2011 05:22 AM

    This will be an S-curve or innovator, early adopter, early majority, late majority and laggard deva vu.  App Store games are still early adopter in my opinion.  Subscriptions are only at innovator.  Don’t forget that the revised timing as a gap between early adopter and early majority. http://en.wikipedia.org/wiki/Early_adopter  and http://en.wikipedia.org/wiki/Diffusion_of_Innovations

    Nice links. I particularly liked the chart for the diffusion of innovations.

         
  • Posted: 16 February 2011 08:06 AM #34

    Unless the government gets involved that is.  The question that likely will be asked: Would you be OK if Microsoft made a mandatory 30% on every purchase made through Windows applications?”-Seth Weintraub

    Well, I don’t know, Seth. Would Microsoft:

    - Review every application to be sure it worked well and was virus free?
    - Pay for the distribution of every application? And all subsequent updates?
    - Create one of the largest and best know stores in the world for selling that application?
    - Create marketing for that application?
    - Take responsibility for accepting payment for that application, even if that application were updated month, weekly or daily?
    - Take responsibility for distributing those payments?
    - Create and share a database of over 100 million credit cards
    - Reduce the friction necessary to make a purchase by so much that the number of applications available rose to 300,000, the number of purchases made rose to 10 billion and the price of applications made available dropped ten-fold?

    I suspect that most Windows sufferers would gladly pay 30% for the first item alone.

         
  • Posted: 16 February 2011 08:39 AM #35

    From the press release:
    Then with one-click, customers pick the length of subscription and are automatically charged

    ...that would be tap :-D

         
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    Posted: 16 February 2011 12:04 PM #36

    FalKirk - 16 February 2011 12:06 PM

    Unless the government gets involved that is.  The question that likely will be asked: Would you be OK if Microsoft made a mandatory 30% on every purchase made through Windows applications?”-Seth Weintraub

    Well, I don’t know, Seth. Would Microsoft:

    - Review every application to be sure it worked well and was virus free?
    - Pay for the distribution of every application? And all subsequent updates?
    - Create one of the largest and best know stores in the world for selling that application?
    - Create marketing for that application?
    - Take responsibility for accepting payment for that application, even if that application were updated month, weekly or daily?
    - Take responsibility for distributing those payments?
    - Create and share a database of over 100 million credit cards
    - Reduce the friction necessary to make a purchase by so much that the number of applications available rose to 300,000, the number of purchases made rose to 10 billion and the price of applications made available dropped ten-fold?

    I suspect that most Windows sufferers would gladly pay 30% for the first item alone.

    With the App Store, my app would sell zero.  The App Store is an enabler for new developers.

         
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    Posted: 16 February 2011 12:26 PM #37

    Matt Rosoff at Yahoo.com

    ‘s new rules dictate that companies who have a subscription-based product available through the App Store—whether a magazine or music service—must let users buy subscriptions from within the app. When they do, Apple takes a 30% cut.

    Is Apple really allowed to do this?

    Absolutely. As both the professors quoted in the Journal piece note, any antitrust claim would have to start by proving that Apple has a dominant position in the relevant market. Right now, it’s not even close.

    One antitrust expert told the Journal that if Apple gets to the point where 60% of all digital subscriptions are sold through iTunes, then competitors might have a case. That presumes that all other tablet competitors combined fail to achieve any meaningful market share, and that almost nobody will continue to subscribe to publications on the Web. That’s not going to happen any time soon.

    Take that and that and that.

         
  • Posted: 16 February 2011 01:31 PM #38

    Now that Apple has given a deadline for existing apps to comply, Pandora, Spotify, Netflix and Kindle all have some big decisions to make. What other big names will be affected?

         
  • Posted: 16 February 2011 01:40 PM #39

    pats - 15 February 2011 08:43 PM

    It Sure is ironic that the store owner should actually get paid to carry your product.

    If you own a magazine store, you get a cut from every magazine you sell. What’s ironic that some now complain why Apple is taking a cut doing the same thing.

         
  • Posted: 16 February 2011 01:51 PM #40

    ilikeimac - 16 February 2011 05:31 PM

    Now that Apple has given a deadline for existing apps to comply, Pandora, Spotify, Netflix and Kindle all have some big decisions to make. What other big names will be affected?

    Not Netflix apparently…

    Netflix will not be affected by Apple’s new subscription billing plan, we are hearing from a source.
    Yesterday Apple rolled out a new policy saying that if an app maker offers digital content then it has to give users an option to buy that content in the app.
    If the user chooses the in-app payment option, Apple keeps 30% of the sale.
    In other words, Netflix would have had to give its users an option to sign up for a Netflix account inside its iOS apps. If the user took that option, Apple would collect 30% of the sale, which is clearly not something Netflix wants.
    This is great news for Netflix, but it’s only going to cause more confusion for publishers who aren’t getting the same kind of favored treatment.

    http://www.businessinsider.com/netflix-not-affected-by-apples-new-subscription-plan-2011-2

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    Posted: 16 February 2011 01:59 PM #41

    Rhapsody’s basic complaint:

    Our philosophy is simple too - an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.

    Apple’s imaginary response:

    The bottom line is we choose not to operate the iTunes store at a loss in order to support content providers who insist on paying nothing for us to host and serve their apps and content. Such a system is economically untenable. Our goal has always been to run the iTunes store at ?a bit over break-even?.

    Edit: On further reflection, Apple does serve up many free apps with the idea that they enrich the iOS ecosystem. The difference is they do not require daily/weekly/monthly subscription “updates” that involve large amounts of data.

    As I understand it, services like Rhapsody, Netflix & Amazon do not deliver their recurring content through the iTunes servers. Then again, I don’t think The Daily’s updates go through iTunes either, but I’m not sure about that.

    Apple has announced policy changes in the past that were either not enforced or quietly changed before ever being enforced. I doubt they do this intentionally since the media furor is always negative. It will be interesting to see how this plays out.

    [ Edited: 16 February 2011 02:20 PM by Drew Bear ]      
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    Posted: 16 February 2011 02:03 PM #42

    One could directly ask those publishers:  how much profit do you expect Apple to make on its infrastructure and marketing efforts ?  10 % too much ?  30 % ?    Do you expect Apple to take a loss in order that you make a profit on your lame or vapor efforts ? 

    Send a certified letter.

         
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    Posted: 16 February 2011 02:17 PM #43

    I have to say this issue is quite complicated.

    1.  I do understand why Apple would want to prevent developers from creating free shell apps that required in-app purchases for functionality, a dismaying trend that developed to circumvent Apple’s revenue cut.

    2.  I suppose Apple sees in-app media purchases in direct competition with media sold at iTunes, though obviously most of this media is not available at iTunes.

    3.  Since Netflix got an exception, could be the door is open for other apps by negotiation.

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    Posted: 16 February 2011 08:11 PM #44

    Apparently, some pigs are more equal than other pigs.

    But according to what’s floating around the net this afternoon, all these companies have to do is ride it out for about six weeks and then find out whether Cook or Schiller actually have any balls.

         
  • Posted: 16 February 2011 08:13 PM #45

    I noticed that PED is getting insidiously negative toward Apple.
    I guess his Fortune boss does not like Apple in app subscription model !


    http://tech.fortune.cnn.com/category/apple-2-0/