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Apple defends in-app subs, claims One Pass is web-only

updated 02:25 pm EST, Wed February 23, 2011

Apple justifies in-app subscriptions at meeting

Apple during its shareholder meeting on Wednesday was put on the defensive and asked to justify its toughened in-app subscription rules. The company insisted it had to maintain the 30 percent cut since the App Store was run at "break even." Google's claimed advantage with One Pass was deceptive as the more favorable 10 percent cut only affected web subscriptions; Android subscriptions and in-app purchases still faced a 30 percent cut, Apple insisted.

The claim was false, as Google in describing One Pass has explicitly said it "offers payments in mobile apps" for platforms in which a subscription was allowed to take place outside of its respective app store. Apple's new rules prevent companies from having a subscription outside of the iTunes App Store without having one inside at similar pricing, but Android has no such restrictions.

Apple did stress that it wasn't requiring a revenue split for existing subscribers, but all new ones would have to abide by the new rules.

The company has drawn criticism for the strategy since the terms in many cases aren't considered economically feasible. Some subscription services don't have room for a 30 percent cut and, due to Apple's no-better-price rule, can't raise the price in the App Store while keeping the same price as before elsewhere. Its rules would also effectively ban free access to a digital edition as a reward for a print subscription. Officials are already in an early investigation of the rules for possible anti-competitive practices.

Apple has previously contended that it was unfair that it didn't get a cut of subscriptions passing through the store. It further argued that the iTunes in-app system would give users an easier solution.



By Electronista Staff
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Comments

  1. dagamer34

    Fresh-Faced Recruit

    Joined: Apr 2007

    +2

    Hmm

    Getting a cut is one thing. Price fixing inside the app and outside is another.

  1. chippie

    Fresh-Faced Recruit

    Joined: May 2009

    +3

    So With The Best Profit Margins In Consumer

    electronics apple can't bare to provide a free service to it's customers and apps developers who bring customers into the ecosystem? Greed Greed Greed! Perhaps the app developers should ask apple to pay to place the apps in it's store or leave the platform. The worms are beginning to infest the apple orchard!

  1. TomMcIn

    Fresh-Faced Recruit

    Joined: Dec 2001

    0

    Alternative Viewpoint

    An article that discusses the whole problem and proposes a reasonable solution.

    http://www.infoworld.com/d/mobilize/apples-ipad-subscriptions-troubles-all-around-832#talkback

  1. Inkling

    Mac Enthusiast

    Joined: Jul 2006

    -8

    Apple's Great Ripoff

    Apple not being honest with its shareholders. It's not providing any services to Readability other than approve the app, much like it has tens of thousand of others. Readability and all the services it offers, feeds of ad-free webpages to users and payments to content-providing websites, are all supplied by the developers. That's why the only thing Apple can do to impose its demands on us is to prevent Readability from reaching our devices. There are no other Apple-provided services it can block. None at all. Apple is not adding enough value to earn 3% of Readability's subscription price, much less 30%.

    Call this The Great Ripoff. Millions of dollars are to be extracted from users without Apple doing a thing to earn them. Greed, greed, greed.

  1. DerekMorr

    Fresh-Faced Recruit

    Joined: Mar 2010

    -2

    Google Checkout not mandatory

    Further, on Android, Google doesn't mandate that you use their in-app checkout system. Existing Android apps, such as the Kindle app, don't (it uses Amazon's own system).

  1. elroth

    Junior Member

    Joined: Jul 2006

    +3

    re: Great Ripoff

    If Apple is supplying no value to Readability, Readability is free to find their own subscribers and keep 100%. They still keep 100% if they find their own subscribers.

    Sounds like you would complain about buying a magazine at a newsstand, where the newsstand keeps 50% of the price.

  1. c4rlob

    Fresh-Faced Recruit

    Joined: May 2009

    +1

    Apple philosophy?

    What if Apple is applying a specific philosophy to all their mobile strategy...

    ...that Consumers demand/expect media or services on a mobile platform to be more convenient, more seamless, AND cheaper than the same media or services on their existing platform. And if providers of those media or services need to improve the experience of their existing platforms to even justify their continued existence. Apple considers it reasonable to ask for a 30% cut for providing an infrastructure that providers are currently unable to provide for themselves. Take iTunes for example, Apple had to twist the music industry's arm to accept that the same music they offer on physical CDs should also be easily downloadable and a-la-carte for a mobile device, all at cheaper price than the physical distribution model. It seems Apple is just applying the same philosophy to their new subscription offering.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    re: Great Ripoff

    If Apple is supplying no value to Readability, Readability is free to find their own subscribers and keep 100%. They still keep 100% if they find their own subscribers.

    Sounds like you would complain about buying a magazine at a newsstand, where the newsstand keeps 50% of the price.


    That's the point, dude. They already were finding 100% of their own subscribers, as the post claims. Apple's got a stupid stick up it's a** on this. It's like they see someone making money, and say "Hey, they're using our iPhone, we should get a piece of that!"

    What's next? If I work out a business deal on an iPhone, Apple gets a commission?

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Apple philosophy?


    What if Apple is applying a specific philosophy to all their mobile strategy...

    ...that Consumers demand/expect media or services on a mobile platform to be more convenient, more seamless, AND cheaper than the same media or services on their existing platform.


    Actually, Apple's demanding it. Consumers always want "Better, faster, cheaper". There's no pleasing the consumer. They think if it is digital, it should be cheaper. Regardless of the extra benefits they get (direct delivery wherever you are, additional content, including video), they'll whine that it's the same price as the newsstand. You can carry 500 different books with you when you board a plane or go to the beach, and it isn't about how this convenience is worth the money, it's how it's digital, so it should be cheaper.

    And if providers of those media or services need to improve the experience of their existing platforms to even justify their continued existence. Apple considers it reasonable to ask for a 30% cut for providing an infrastructure that providers are currently unable to provide for themselves.

    And that would be no problem at all. Just like with the AppStore, there are developers willing to give Apple that 30% to provide those services. The point, however, is that Apple is NOT allowing the providers to provide these services. They are requiring them to go through Apple. Even if they don't need Apple, they still have to.

    Take iTunes for example, Apple had to twist the music industry's arm to accept that the same music they offer on physical CDs should also be easily downloadable and a-la-carte for a mobile device, all at cheaper price than the physical distribution model.

    Sorry, but that's not true. They pushed for a 'cheaper' price, but they only got it on individual songs. Albums were and are priced all over the board, many at near the same price as the physical CD.

    It seems Apple is just applying the same philosophy to their new subscription offering.

    But you're missing the big difference. Apple never forced the music or movie industry to offer their content on the iTMS if they offered it elsewhere. The consumer can still buy a CD and add it to iTunes as they see fit. The same with video.

    But with subscriptions, Apple is saying specifically "Everything has to go through us. Sure, we'll have an exception. We'll let the user buy and download the content on their computer, and manually add it to the app through iTunes. But if you want to allow users to get at content directly through your app, or even indirectly through the web, but via the Apple device, we require that you offer the same content through us at the same price, or better."

    Is this possibly better for the consumer? Possibly. I don't know how, except only one person technically has your credit card, not 5 companies. It doesn't help the publisher at all, though.

  1. wrenchy

    Forum Regular

    Joined: Nov 2009

    -2

    Maybe Apple should copy


    Google's "Don't be Evil" mantra.

    It seem they're being very evil and greedy.

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