Apple launches in-app Subscriptions…

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    Posted: 21 February 2011 05:18 PM #91

    Wow, Tetra, you sure put some though into that. The chances of this getting to court are slim to me. Apple is breaking no law and if the above facts are presented to the majority of people, Apple wins hands down. This country has had to endure record companies, newspapers, magazines, cable companies, TV studios, movie studios, phone companies, etc….... Apple has made it possible for someone to buy just the song they want, instead of a whole album. Who is defending the consumer when we go to a movie and pay on outrageous price to find out the only clip in the whole movie worth seeing was the one they ran for an ad? Cable and phone companies have been putting the screws to the people for years. They package things together to make the most off of every consumer. What do each of these media types have in common? They all hate competition. Competition comes in either content, price or service that is consumer oriented. None of these organizations are consumer oriented. Their goal is to extract as much of your money as possible. $100 for a cell phone bill is outrageous. I pay $46/mo for internet service, now that is criminal. I pay $60/mo to direct TV for 300 channels and only use maybe 10, grrrrrrrrr. Fact is I don’t have a choice. Apple is disrupting all types of media and they are going to try and fight back through the courts instead of letting the consumer choose who they want. Apple has over 100 million itunes customers, the ability to reach that group should come at a price, to me 30% is not enough.

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  • Posted: 21 February 2011 05:25 PM #92

    Tetrachloride - 21 February 2011 08:22 PM

    Subscription issues roundup.

    Only 24 points? Slacker.

    Seriously, nice post. Very comprehensive.

    There has been one issue above all others that has really stuck in my craw. Most of the faux outrage is aimed at the clause where Apple insists that publishers must offer Apple the same or lower prices than they offer elsewhere. “Anticompetitive” they cry. “An abuse of monopoly power” they cry.

    But Amazon does this exact thing in its contracts:

    “The Amazon price must be the same or less than at competing ebook sellers”

    http://mac.blorge.com/2010/01/20/amazon-kind-of-sort-of-matches-itunes-7030-revenue-split-for-ebooks/

    In fact, such language is in common usage and even has a name: “Most Favored Nation Clause”:

    A most favored nation clause (also called a most favored customer clause or most favored licensee clause) is a contract provision in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee).

    http://itlaw.wikia.com/wiki/Most_favored_nation_clause

    Retailers insert such a clause whenever possible. For example Nordstrum does not sell an item at one end of the mall and permit J.C. Penney to sell it for less at the other end of the mall. Apple is merely doing what Amazon does and what thousands of other retailers do every day.

         
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    Posted: 21 February 2011 05:33 PM #93

    The “brainy” part is realizing that there were a lot of issues to be found.  The easy part was using other people’s posts to summarize.

         
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    Posted: 21 February 2011 08:14 PM #94

    Whatever the case, it’s one heck of an excellent summary, Tetrachloride.  Well done.

    Btw, we have a new micro-issue brewing.  The makers of “Readability” are stewing a bit (and I don’t think that’s overstating it…“open letter” vs. “try to work it out a little with App Store folks first” equals “take our plight to the press”) about their software-as-a-service type subscription app being rejected.

    EDIT:  Actually, no, they’re just plain stewing.  Check out this fun tidbit: 

    Before we cool down and come to our senses, we might as well share how we?re feeling right now:

    Y’mean, “I’m ticked off, so let me just spout off a little bit before I think of more reasonable things to do or say?”  I gotcha, guys.  Ah, if only the world worked that way, where you get a free chance to speak your mind without a cool head, without any consequences.

    Gruber over at the Fireball has a nice take on their situation.

    [ Edited: 21 February 2011 08:20 PM by Mav ]

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    Posted: 21 February 2011 10:04 PM #95

    The difference Tetra, between Amazon (or any other example you wish to cite) and Apple is that because of how Apple licenses its SDK and the platform, there are no legitimate alternatives to the App Store for distributing iOS apps. Is that an illegal tying situation? No. But it does make comparisons with channels where suppliers have options mostly disingenuous and definitely not relevant.

         
  • Posted: 22 February 2011 06:01 AM #96

    I’m reading of Instapaper’s CEO suggesting that Apple is greedy by using an across the board 30% for in app sales. Someone help me here. Doesn’t Instapapers model take other peoples work, add value, charge a fee, and offer it for sale?

    Have I left anything out?

         
  • Posted: 22 February 2011 06:36 AM #97

    Bosco (Brad Hutchings) - 22 February 2011 02:04 AM

    The difference Tetra, between Amazon (or any other example you wish to cite) and Apple is that because of how Apple licenses its SDK and the platform, there are no legitimate alternatives to the App Store for distributing iOS apps. Is that an illegal tying situation? No. But it does make comparisons with channels where suppliers have options mostly disingenuous and definitely not relevant.

    A web based solution would work?

         
  • Posted: 22 February 2011 09:45 AM #98

    danthemason - 22 February 2011 10:01 AM

    I’m reading of Instapaper’s CEO suggesting that Apple is greedy by using an across the board 30% for in app sales. Someone help me here. Doesn’t Instapapers model take other peoples work, add value, charge a fee, and offer it for sale?

    Have I left anything out?

    If you are reading the same blog post as me, then yes you are. He is arguing a completely different point. The way Apple’s guidelines are written, it is not clear what apps and services are now going to be offside. Read the post here.

    I think the following quote from the post hits the mark.

    Since there are so many gray areas and it?s very far-reaching, this is going to be a difficult policy to enforce consistently.

    One issue is that this policy assumes that all apps are made by someone with the ability and authority to collect IAP payments on the service?s behalf, which isn?t the case for third-party clients using a service?s API.

    If Twitter charged a subscription fee, or even sold any content whatsoever, no third-party Twitter clients would be permitted on the App Store, effectively preventing that entire market.

    But we don?t need to look only at Twitter. There are plenty of paid services, or free services with paid upgrades, that have first- and third-party iOS apps. Some of the many examples:

    Evernote?s app offers its premium accounts with IAP, but third party clients can?t. Are third-party Evernote clients now prohibited?
    Dropbox?s app doesn?t offer Dropbox?s Pro accounts at all, but the app is indirectly affected by the user?s storage space. Is additional storage space enough to qualify as ?content, functionality, or services?? If so, does that put all Dropbox-syncing apps under the (impossible for them) IAP-requiring policy?
    There are a lot of first- and third-party apps that access Salesforce, LinkedIn, and 37signals? services, all of which have paid service tiers. Will all of these be removed from the App Store if they don?t build in IAP?
    All Pinboard.in accounts are paid. Does that mean that nobody can make a Pinboard client except Pinboard itself, because nobody else can accept payments on its behalf?
    What?s going to be the rule for third-party apps accessing paid services?


    Broadly applied, I believe that these rules are indeed going to result in developer revolt.  Apple needs to clarify what their intentions actually are, and if they do indeed intend to capture all forms of services, then they have made a huge blunder.

    Other questions and comments.

    1. What about meeting apps like Webex?  The Webex client is free, but it cannot be used without the broader Webex service.  What is the intent here?  Does Apple now think it is entitled to some portion of the Webex subscription revenue?

    2. Apple is seen as consumer friendly. If this policy forces the exodus of popular apps like Kindle, then expect many customers to take the opposite point of view. And don’t tell me that I should now use IBooks and be happy for it. Selection sucks and prices are higher.

    I expect that Apple’s intent is way less evil than people are reading into the situation, but the way the rules are currently written, it is impossible to say for sure. And all the FUD flingers are having a field day as a result.

         
  • Posted: 22 February 2011 09:56 AM #99

    Lstream - 22 February 2011 01:45 PM

    Broadly applied, I believe that these rules are indeed going to result in developer revolt.

    Yes because every developer is going to run to the alternatives where they make little or no money. Developers are mostly selfish and in it for the money. They will stick with the solution that has 160 million proven paying customers… No point in giving your work away.

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  • Posted: 22 February 2011 10:14 AM #100

    rattyuk - 22 February 2011 01:56 PM
    Lstream - 22 February 2011 01:45 PM

    Broadly applied, I believe that these rules are indeed going to result in developer revolt.

    Yes because every developer is going to run to the alternatives where they make little or no money. Developers are mostly selfish and in it for the money. They will stick with the solution that has 160 million proven paying customers… No point in giving your work away.

    Guess we can agree to disagree then.  Apple can assume that the competitive ecosystem will always be lame and pose no threat, or they can listen to thought leaders like Arment and realize that dominance is not pre-ordained to last forever.  I prefer the latter, as the one part of the Apple story that really worries me as an investor is the Android threat.

    If Apple makes a misstep that alienates developers, and customers at the same time, then they play right into Google’s hand. To me there is serious danger to the franchise here.

         
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    Posted: 22 February 2011 02:20 PM #101

    Lstream - 22 February 2011 02:14 PM

    Apple can assume that the competitive ecosystem will always be lame and pose no threat, or they can listen to thought leaders like Arment and realize that dominance is not pre-ordained to last forever.  I prefer the latter, as the one part of the Apple story that really worries me as an investor is the Android threat.

    If Apple makes a misstep that alienates developers, and customers at the same time, then they play right into Google’s hand. To me there is serious danger to the franchise here.

    I think Apple does listen to people like Arment & Gruber. Hopefully SJ’s email regarding SaaS is true and marks a beginning to additional clarification on the rules.

    I think everyone agrees that Apple considers customers (end-users) their priority. Developers are important to them, but they are in second place. In a distant third place is a profit motive for the App Store. I very much doubt they would alienate #1 & #2 in favor of #3.

         
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    Posted: 22 February 2011 09:45 PM #102

    One guy’s ranting about the application of a new subscription policy to a novel situation (software service subscription) before even trying to clarify things with an appeal or resubmission should not be automatically deemed to be the straw that breaks the App Store’s back.  Even thinking that this is the selection of the straw, or the grasping of that straw, or the process of taking the straw and hovering it menacingly over the App Store’s back is way too premature.

    Let’s see it for what it is.  A grey area, and a developer who chose to sound off about it in an open letter instead of take the more reasonable approach, which by his own suggestion was to calm down first.  The thing with grey areas like SaaS when the subscription model was clearly set up for regular ol’ publishers - they’re grey.  They will need a little time to sort out.  Why not wait for Apple’s response first?

    Developer revolt?  Not seeing it.  Are you?

    [ Edited: 22 February 2011 09:48 PM by Mav ]

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    Posted: 03 March 2011 02:54 AM #103

    Good, albeit long article, largely in defense of Apple’s 30/70 cut.

    This is what galls some: Apple is doing this because they can, and no other company is in a position to do it. This is not a fear that in-app subscriptions will fail because Apple?s 30 percent slice is too high, but rather that in-app subscriptions will succeed despite Apple?s (in their minds) egregious profiteering. I.e. that charging what the market will bear is somehow unscrupulous. To the charge that Apple Inc. is a for-profit corporation run by staunch capitalists, I say, ?Duh?.

    Dirty Percent

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    Posted: 02 May 2011 12:47 AM #104

    Time Inc

    Time Inc., the country’s largest magazine publisher, has reached a deal with Apple Inc. (AAPL) to make all its iPad editions free for print subscribers, marking a break in the impasse between publishers and Apple and lending support to Time’s contention that it’s business-as-usual after the ouster of its chief executive.

    Starting Monday, subscribers to Sports Illustrated, Time and Fortune magazines will be able to access the iPad editions via the apps, which will be able to authenticate them as subscribers. Time Inc.‘s People magazine already had such an arrangement, but readers of most publications have had to pay separately for the iPad version regardless of their subscriber status.

    http://www.morningstar.co.uk/uk/markets/newsfeeditem.aspx?id=138501958248620

         
  • Posted: 04 May 2011 09:10 PM #105

    Hearst reaches deal with Apple to offer iPad in app subscriptions by July

    ...and one by one, the dominoes begin to fall.