Open as in Apple

February 15, 2011 9:30 AM

Apple has launched App Store subscriptions for digital content, something that should please magazine publishers looking for a non-print business model. However there is a sting in the tail - publishers must go through Apple, paying the 30% "Apple tax".
posted by Artw (386 comments total)

There's always an asp in the apple.
posted by blucevalo at 9:32 AM on February 15, 2011 [4 favorites]

This is fine for apps and industries with little overhead; but in industries with thin margins, how does apple think that this is ok? That the in-app subscription can be a loss-leader?

Can app developers just write: "PRETTY PLEASE make this purchase from our website instead of in this app?"
posted by stratastar at 9:35 AM on February 15, 2011

I wonder how the Apple tax compares to the traditional model, including lead generation, distribution, returns, etc.?
posted by nickrussell at 9:36 AM on February 15, 2011 [1 favorite]

Digital sales dropped toward the end of 2010 for all the magazines that make those figures available to the Audit Bureau of Circulations.

---

Why iPad Magazine Sales Are Not As Bad As They Seem
posted by Joe Beese at 9:37 AM on February 15, 2011

Rent-seekers gonna seek rents.
posted by bonehead at 9:37 AM on February 15, 2011 [35 favorites]

publishers must go through Apple, paying the 30% "Apple tax"

Actually, Artw, developers, publishers and consumers can still bypass Apple's "tax":

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.
posted by Blazecock Pileon at 9:37 AM on February 15, 2011 [5 favorites]

Yet publishers will do it, because it'll be worth it to them to be a part of Apple's machine. I don't understand the problem - middlemen make money, they always have. The profit on e-subscriptions is higher than on print ones - more than enough to make up the 30%.
posted by Dee Xtrovert at 9:38 AM on February 15, 2011 [1 favorite]

Outrageous. I guess these publishers are all going to launch their e-magazines in the Android Marketplace.

Right?
posted by chunking express at 9:40 AM on February 15, 2011 [2 favorites]

Is 30% more than the markup to two or three layers of middle men in conventional magazine publishing? I would have guessed 50% would have been typical.
posted by Mitheral at 9:41 AM on February 15, 2011

30% in the publishing industry probably counts as some kind of efficiency record.
posted by 2bucksplus at 9:43 AM on February 15, 2011 [4 favorites]

Is this the new "doesn't play OGG Vorbis?"
posted by Threeway Handshake at 9:48 AM on February 15, 2011 [7 favorites]

Is 30% more than the markup to two or three layers of middle men in conventional magazine publishing? I would have guessed 50% would have been typical.

False choice. Don't compare this to conventional magazine publishing for whether it's a good choice, compare this to the existing model that Amazon and Sony and others are operating under right now. 30% is a lot more than 0%.

The closer analogy is a kingpin demanding a 30% cut of any business that goes on in his "territory", whether he has anything to do with it or not. If you're buying books from Amazon using your iWhatever, Apple takes 30% off the back end. For Amazon to get all of the payment, you have to make a note of the book you want to buy, close your Kindle app, load up a browser, and make the purchase there.

Because it's all about the user experience.
posted by kafziel at 9:49 AM on February 15, 2011 [12 favorites]

Why is this an issue? They're using Apple's technology and distribution platform and Apple is charging for it. There's no need to use it if you don't want to, but you're going to need to build your own subscription platform and generate your own traffic.
posted by jourman2 at 9:49 AM on February 15, 2011 [14 favorites]

So leaving aside the fact that publishers aren't required to use this service, is it really that outrageous that Apple is charging for use of their software? This is about as sensible as raging at PayPal for taking a cut of transactions, when alternatives to PayPal exist.
posted by Blazecock Pileon at 9:51 AM on February 15, 2011 [5 favorites]

Compare this to the existing model that Amazon and Sony and others are operating under right now. 30% is a lot more than 0%.

Amazon makes 0% on e-sales?

If so, the market will reject Apple's 30% take soon enough. Problem self-solved.
posted by rokusan at 9:53 AM on February 15, 2011 [6 favorites]

Sounds like a finder's fee to me. If magazines want customers they're free to get them on their own.
posted by polyhedron at 9:53 AM on February 15, 2011 [1 favorite]

If PayPal took a 30% cut, you'd better believe there'd be raging. In fact, I'm pretty much avoiding PayPal nowadays now that they've cut out free personal transactions below a certain amount.
posted by weston at 9:54 AM on February 15, 2011

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

That's the key part, I think. If Apple was truly neutral, they wouldn't make this requirement.
posted by kmz at 9:54 AM on February 15, 2011 [1 favorite]

I wonder how the Apple tax compares to the traditional model, including lead generation, distribution, returns, etc.?

Speaking to online lead generation, since that's part of what I do - we would kill for a 30% margin. My company has to account for lead revenue separately from our other work, simply because the margin makes everything look so bad. Leads have < 5% net-operating-contribution (NOC, revenue before all the internal fees to IT, HR, blah blah blah). Target NOC for the company/any group/any project is 35%.

The margins are razor thin for us, for our suppliers, for everyone up the chain. The only people making real money in lead generation are the original generators (aka content producers), everyone else is just making a dime or two along the chain to the retailer. And here, Apple is cutting out half the chain, and *then* taking the content producer's margin too.

I'm obviously in the wrong business.
posted by ish__ at 9:55 AM on February 15, 2011 [2 favorites]

I'm pretty much avoiding PayPal nowadays now that they've cut out free personal transactions below a certain amount.

Sounds like you're not being forced to use PayPal.
posted by Blazecock Pileon at 9:55 AM on February 15, 2011 [1 favorite]

I don't understand the problem - middlemen make money, they always have.

Rent-seeking, a buisness model which depends on getting paid because your customers have no choice but to pay you, is thought by many economists to damage economic growth and reduce overall productivity. It's good for Apple, but worse for everyone else.

Put in other terms, in this instance Apple is using it's priviledge as a monoply supplier of this platform to compete, rather than competing on equity or fair value.

It's bad for Apple in the long term too because it makes them dependent on "rents" rather than innovating. The long term effects on MicroSoft of stable "rents" on Windows and Office have effectively killed innovation at that company. The same thing happened to IBM in the 70's and 80's. It's possible to regenerate the company and get out of this trap, but it's really difficult and takes excellent leadership. IBM did it, it's still not clear if MS will be able to.
posted by bonehead at 9:55 AM on February 15, 2011 [10 favorites]

Publishers can bypass the Apple tax, but it will impose extra effort on the consumer, and the publisher cannot direct the consumer "hey, please buy this from our website, not in-app."

This 30% is the same 30% as Apple's cut on app sales. However, with app sales, Apple is reviewing and hosting the downloadable content. Neither of which is true with content sales. Now, you might fairly argue that Apple's app-store reviews are not worth paying for, but it does represent some effort by Apple. The 30% on content sales is pure rent-seeking.

This structure is being imposed on electronic books as well. It's a shot right at the heart of Amazon's Kindle business. Amazon gets 30% on their Kindle sales. Apple is effectively banning the Kindle app (and Nook app, and Sony's e-reader) from the iOS platform by doing this, which is bad for consumers.

As far as I'm concerned, this is as bad as if Apple said that you could only play music bought through the iTunes store on your iPhone. Even when Apple was selling DRM'd music, they didn't impose that limitation (although it's true that the only DRM'd music you could play was theirs).

I am a fan of Apple products, but this is overreaching by the company, and I hope they will be smacked down for it.
posted by adamrice at 9:56 AM on February 15, 2011 [15 favorites]

Rent-seeking, a buisness model which depends on getting paid because your customers have no choice but to pay you

Except when they do. Like in this instance.
posted by dobbs at 9:56 AM on February 15, 2011 [1 favorite]

Also, I continue not to understand the point about Apple having a monopoly. No one forces you into Apple's model and there are other options available.

It's like someone going into M&S and complaining they cannot get other brands! You knew that before you walked in the door!
posted by nickrussell at 9:57 AM on February 15, 2011

The closer analogy is a kingpin demanding a 30% cut of any business that goes on in his "territory", whether he has anything to do with it or not.

There's more to it than that. Apple provides a marketing and distribution channel in the form of the iTunes App Store. It's not just a tax on selling to customers who use iOS devices. It's part of the quid pro quo of using the App Store as your sales channel.

If you really want to avoid Apple entirely, there's nothing stopping publishers from selling subscription-based website access (e.g. The Economist) or selling DRM-free ebooks (e.g. O'Reilly).

If PayPal took a 30% cut, you'd better believe there'd be raging.

PayPal isn't the best analogy, since PayPal only provides the payment service. Apple also makes the marketing and distribution channel and the platform. The 30% cut represents, in some sense, the fact that Apple's high quality platform is part of the reason people want to pay money for the subscription in the first place. That is, some customers will only subscribe if they can access the content on their iOS device; they aren't interested in viewing the content on their regular computer or as a printed publication.
posted by jedicus at 9:58 AM on February 15, 2011 [2 favorites]

Sounds like a finder's fee to me.

According to the first Google link for "finder's fee percentage", 10% is the maximum number quoted - with 2%-5% more typical.
posted by Joe Beese at 9:59 AM on February 15, 2011

Blazecock Pileon's right. Not only that, but Amazon's Kindle royalty rate, that is the money you get from Kindle Store sales, according to http://www.amazon.com/dtp, is 70% if you conform to this list of requirements, and 35% otherwise. That 35% figure includes all out-of-U.S. sales.

So, Apple's digital content take ends up being at least as good as Amazon's, and frequently better. It IS possible to sell or distribute Kindle content outside of Amazon, but it's often more of a bother. (Although its browser is capable of downloading readable files to the device and automatically adding them to the Home list.)
posted by JHarris at 9:59 AM on February 15, 2011 [3 favorites]

Apple is effectively banning the Kindle app

I am still able to use the Kindle app on my phone. The Kindle app has never offered books within-app, as far as I can remember, and there's nothing about this announcement that prevents Amazon from continuing to sell books through their storefront.
posted by Blazecock Pileon at 10:00 AM on February 15, 2011 [6 favorites]

"Because it's all about the user experience."

But honestly, that is Apple's value-added, isn't it? After years of rooting phones with custom roms and addons, and spending hours getting devices to work exactly how I want them, I went with an iPhone and I've never been happier not to worry about that crap.

Its the reason why hulu costs money on an iPad and not on your computer, and people still pay for it, because there is value (that people pay for) in that tactile user experience.

I'll still go to amazon to buy my book though.
posted by stratastar at 10:02 AM on February 15, 2011 [1 favorite]

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

It does not prevent Amazon from selling though their website, but they must also offer the same price through Apple.
posted by _Lasar at 10:03 AM on February 15, 2011 [3 favorites]

I am still able to use the Kindle app on my phone. The Kindle app has never offered books within-app, as far as I can remember, and there's nothing about this announcement that prevents Amazon from continuing to sell books through their storefront.

Unless the last link in the FPP is lying, then this new policy means that if Amazon wants to continue offering the Kindle app, they will be required to offer books within-app with the Apple tax.
posted by kmz at 10:04 AM on February 15, 2011 [3 favorites]

How are they effectively banning the Kindle app? Do you have a link? That would be interesting, as would it be if Apple were to suddenly declare that new digital publishing platforms would now be forbidden from the App Store.

If the Kindle App is functionally the same as Kindle for PC then it should definitely offer books too. I don't have an iThing myself so I can't tell if it does for sure, but reducing the features for iOS when part of the draw of the Kindle publishing platform is being able to download your purchased documents regardless of the platform, so if you couldn't read your books on iOS Kindle some of the appeal would be gone, and that I could get worked up about.
posted by JHarris at 10:06 AM on February 15, 2011

It does not prevent Amazon from selling though their website, but they must also offer the same price through Apple.

Ah, that begins to approach evil. Although it is evil that Amazon engages in with the Kindle as well I think, which is an even more locked-down platform than iOS.
posted by JHarris at 10:08 AM on February 15, 2011

chunking express: "Outrageous. I guess these publishers are all going to launch their e-magazines in the Android Marketplace.

Right"

Condé Nast to Launch Magazine Editions for Google’s Android
posted by octothorpe at 10:08 AM on February 15, 2011

To be honest, I never would have expected Apple to be the ones who would kill the web.

(But, really, the 30% tax is going to drive a lot of competition, and make the DOJ start looking at them very closely. I like Apple's products, but their business model is starting to make Microsoft look saintly by comparison.)
posted by schmod at 10:09 AM on February 15, 2011 [2 favorites]

The Angry Birds people can't even make money from selling Angry Birds on Android. I wish Conde Nast the best of luck.
posted by Threeway Handshake at 10:09 AM on February 15, 2011 [7 favorites]

Corporation attempts to make money--fanboys who were convinced it was "different" outraged. Film at 11.
posted by Ironmouth at 10:11 AM on February 15, 2011 [3 favorites]

(But, really, the 30% tax is going to drive a lot of competition, and make the DOJ start looking at them very closely. I like Apple's products, but their business model is starting to make Microsoft look saintly by comparison.)

Does the DOJ have cases open on Amazon and B&N?

It's free on Android, though there are ads.

Yep, that's why I said "selling Angry Birds."
posted by Threeway Handshake at 10:12 AM on February 15, 2011 [1 favorite]

Unless the last link in the FPP is lying

I won't ascribe motivations of dishonesty to the parties involved, but the post is not quite factually correct, on the whole.
posted by Blazecock Pileon at 10:13 AM on February 15, 2011

One possible early victim of this is the Dark Horse Digital Comics App.
posted by Artw at 10:14 AM on February 15, 2011

Threeway Handshake: "The Angry Birds people can't even make money from selling Angry Birds on Android. I wish Conde Nast the best of luck"

On Android, Angry Birds is given away free and derives its income from in-game advertising provided by Google's Admob group. The developers say that they should soon start making $1 million a month just from advertising against the Android app alone.
posted by octothorpe at 10:16 AM on February 15, 2011 [12 favorites]

Mark Millar on digital comics pricing
posted by Artw at 10:17 AM on February 15, 2011 [3 favorites]

So basically the point of a "Hey Apple did this new thing" post is so half of us can say "cool" and the other half can say "OMG WTF???" 'cause that seems to be what always happens with these threads, no matter how much effort is put into making them look like a "hey let's talk about Apple" post.
posted by bondcliff at 10:18 AM on February 15, 2011 [4 favorites]

The Angry Birds people can't even make money from selling Angry Birds on Android.

The poor things.
posted by mullingitover at 10:19 AM on February 15, 2011 [1 favorite]

I'm not a fan of Apple's. I think they are jerks. But calling them a monopoly? Not a chance. Go get an Android device and get over it.

Monopoly is just a game, I'm trying to take over the fucking world! - Robin Williams mocking Bill Gates
posted by Mister Fabulous at 10:22 AM on February 15, 2011 [1 favorite]

Why can't they sell Angry Birds in the Android store?
posted by Threeway Handshake at 10:22 AM on February 15, 2011

I won't ascribe motivations of dishonesty to the parties involved, but the post is not quite factually correct, on the whole.

Blaze, if you're going to outright call me a liar please take it to meta. Other than that I'm going to make no response to you because, well, you're a very silly person.

So basically the point of a "Hey Apple did this new thing" post is so half of us can say "cool" and the other half can say "OMG WTF???" 'cause that seems to be what always happens with these threads, no matter how much effort is put into making them look like a "hey let's talk about Apple" post.

Well, there's always the fun MeFi platforrm wars aspect, as Blazecock demonstrates, but I think you're seeing the iPad as a significant factor in digital publishing, and I certainly do, then it's hard not to see Apple's mandate that all in App purchases must wither be through them or have an equivalent method that goes through them, at the same price with them taking a chunk, as kind of a big deal.
posted by Artw at 10:25 AM on February 15, 2011 [3 favorites]

Ah I see, now that I'm reading the second link: the thing with the Kindle App is that links from outside content won't be able to connect to the app, because Kindle isn't paying Apple. Which is substantially scuzzy, yes, since it's another way Apple is using the locked-down nature of iOS against publishers, and ultimately us. Amazon does it too with their Kindle devices.

I don't know. Digital publishing is a good idea, I think, but all these locked-down devices impose weird economics upon the system.
posted by JHarris at 10:30 AM on February 15, 2011 [1 favorite]

While I hate lots of things about the app store, compared to traditional magazine distribution and sales, 35% is nothing. In traditional retail, the store has their markup (50%?) and, depending on the magazine, a distributor has also taken good chunk and on top of that a large percentage of magazine runs get returned for a full refund. The reason virtually all magazines have ads is because actual reader revenue is very small. It's also important to remember that the AppStore delivers a lot of exposure, that's what you're really paying for.
The bottom line is, yeah, Apple made a really slick piece of hardware and they're going to charge anyone who wants to be on it. The perk is that lots of people with money own this hardware and like using the AppStore. They'd be stupid not to charge for it.
posted by doctor_negative at 10:30 AM on February 15, 2011

Blaze, if you're going to outright call me a liar please take it to meta.

I went out of my way not to call you a liar, actually. I don't think you're lying, but I do think your post is based on an incorrect understanding of what is actually, factually true, which is what motivated my citation that explains the real policy.

Well, there's always the fun MeFi platforrm wars aspect, as Blazecock demonstrates

The personal attacks are unnecessary. Apple's own announcement appears to contradict your post, that's all I'm saying.
posted by Blazecock Pileon at 10:31 AM on February 15, 2011 [1 favorite]

But calling them a monopoly? Not a chance. Go get an Android device and get over it.

Actually, this is why I think this is such a dumb move. It's way too early. Apple is behaving like a monopolist without actually having more than about a quarter of the market.

A smart rent-seeker doesn't impose fees until they have full market capture. If Amazon or Conte Nast really want to break this, all they have to do is offer cheaper prices on their own platforms or on competitors' like Android. My guess is that Apple feels their customers are loyal enough that they will put up with these extra fees as part of the Apple experience.
posted by bonehead at 10:32 AM on February 15, 2011 [3 favorites]

Blah blah blah. You (in the general form of "responders above") have other choices, if Apple imposing an in-app purchasing model now bothers you so much - buy an Android phone and... do whatever it is they do. Obviously, there are millions and millions of us who are perfectly happy with the experience - and, yes, the costs - of Apple's iOS platform. Since you don't have anything to offer other than spluttering about how evil Apple is, you're certainly not going to convince us we're wrong and you're right...
posted by OneMonkeysUncle at 10:34 AM on February 15, 2011

Here's the point, WRT. Kindle: Amazon already soaks the publishers for a huge discount off list price: I've heard word of them demanding up to an 80% discount in some cases, and playing hardball to get 60% off.

If Apple roll up and demand 30%, Amazon are either going to up their prices ... or, more likely, they're going to play hardball with the publishers and authors again.

Heads one of Apple or Amazon win; tails I lose.
posted by cstross at 10:34 AM on February 15, 2011 [12 favorites]

I just visited the bodega on my corner, and since I know the dude, I asked him if he sells the magazines on the rack at a 0% profit and he looked at me like I was crazy. And then I bought a pack of cigarettes from him for $12.
posted by Threeway Handshake at 10:36 AM on February 15, 2011 [4 favorites]

seeing the iPad as a significant factor in digital publishing

The most significant, if you ask me.

I think it arguably did as much as the Kindle 3 to trigger the e-reading boom. And tablet computers - a class of devices that the iPad popularized and will dominate for the foreseeable future - will be far more important than dedicated e-readers going forward.

So whether Apple RULEZ or SUX, this is an important story.
posted by Joe Beese at 10:37 AM on February 15, 2011

I'm pretty much avoiding PayPal nowadays now that they've cut out free personal transactions below a certain amount.

As opposed to wire transfers, which are totally free...
posted by atrazine at 10:41 AM on February 15, 2011 [2 favorites]

I came in here to say what Mister Fabulous said. I'm a former (never again!) iPhone user and an Android fanboy, and I love a good Apple pile-on. But this move strikes me as not a problem at all.

If Apple was using a patent or monopoly power to block subscription services on other platforms, that would be rent-seeking. But this is just a company with an excellent distribution platform charging for use of that platform. You are free to publish elsewhere, but there's a price to do it on what is currently the best new platform. If Apple's price is truly extortion and provides no profit, no publisher is going to accept it. But it's not extortion, it's just a price for a very efficient distribution method, and they're going to pay it. Distribution costs money? Them's the breaks.

In my mind, this is a good thing for users of other platforms. If this becomes an example of a functional subscription publishing service on a mobile platform, other vendors and publishers will be more willing to follow suit with their own services, so this should speed up the creation of similar services elsewhere.

And if Apple's prices are truly so bad that the poor content publishers aren't making money, they'll just adopt all the other mobile formats (Android, WebOS, e-readers, whatever RIM is doing) and stop losing money with Apple. But if Apple is just charging what they can charge, the publishers will stick with them, but that's a choice.
posted by Tehhund at 10:42 AM on February 15, 2011 [4 favorites]

Is Apple actually going to be doing the distribution for in-app purchased media?
posted by kmz at 10:46 AM on February 15, 2011

Amazon already soaks the publishers for a huge discount off list price

My bold for emphasis, of course Amazon hits publishers for a discount on ebooks, Amazon is doing the most of publisher's job. For a self-published book, the Amazon hit to the author is far less than traditional publishing. Amazon has never cared what I price my self-published ebooks at. Of course that means I'm responsible for editing and marketing myself, and have no one to blame if there are never any sales.
posted by nomisxid at 10:47 AM on February 15, 2011

The Washington Post also appears to have contracted the heebie-jeebies.
posted by Joe Beese at 10:54 AM on February 15, 2011

Joe Beese, the article you linked to provides several plausible explanations for the Washington Post delaying release of paid subscriptions (including updating to *use* App Store subscriptions), but none of them are heebie-jeebies.
posted by Llama-Lime at 10:57 AM on February 15, 2011

stratastar wrote: "But honestly, that is Apple's value-added, isn't it?"

Didn't you pay for that when you bought your device? Why do you insist on paying again and again?
posted by wierdo at 11:01 AM on February 15, 2011 [1 favorite]

Heh. From the Wall Street Journal:

An Apple spokeswoman said apps that currently aren't in compliance with this requirement will have to change. Popular media apps that could be affected include Netflix Inc. (NFLX), Amazon Inc.'s (AMZN) Kindle app, Hulu LLC's Hulu Plus app and News Corp.'s (NWS NWSA) The Wall Street Journal.

A spokeswoman for The Wall Street Journal declined to comment, while representatives for the other companies were unavailable.
posted by Artw at 11:03 AM on February 15, 2011

At least the Wall Street Journal dude had the courtesy to show up to not say anything.
posted by Mister_A at 11:09 AM on February 15, 2011

The personal attacks are unnecessary. Apple's own announcement appears to contradict your post, that's all I'm saying.

I fail to see the difference between the apple official statement, and what Artw put in the head.

If you offer non-apple channel methods of subscribing to content AND sell/give away an iOS app to access said subscription, you *must* now add in-app subscription capability, and you *must* sell it via in-app subscription at the same price as you sell as the non-app store channel - even though apple is adding an additional 30% price on top of what said publisher would otherwise have to pay.

Lets take two examples;

I sell a swanky tasklist app. We'll call it DontForgetTheMilk. I make it available on android and iOS. I sell it in the market, and the app store. Both google and apple take their cut for marketing, handling billing, and shipping my app. Fair enough. I don't have much of a choice with iOS, as the only way to get apps on there is via the app store.

So now I add web-sync. Your tasks are stored on my server, and you can access them from anywhere - website, local pc app, mobile app. This costs money for hosting, so I sell monthly or annual subs on my website - you get a login account with a valid sub, you put that in the app, and bingo - your offline app now syncs to the cloud. Yay!

Now apple launch in-app subscriptions. As part of the terms of selling my app on the app store - the only way to GET DFTM on iOS - I *must* now add an option to subscribe in-app to my online sync service, and I *must* sell it for the same price as my website subs; I'm not even allowed to tell people in-app I'd rather they'd buy it from the website - so any iOS customer I have, I'm risking they'll use the mandatory in-app channel, and cost me an extra 30% of every sub. For doing bugger-all.

OK, let's try example 2.

I'm a swanky new digital online magazine. I set up an agreement with amazon to sell subscriptions to my magazine; in return, it gets hosted on the amazon store, and subs are available on any platform that supports kindle; PC, iOS, android, etc, etc. I pay amazon my cut for hosting the subs.

Amazon make the kindle app available for free. I don't know if apple charge publishers for putting free apps in the webstore; either way, as a magazine publisher, I don't really care, as that's Amazon's problem.

Now Apple introduce in-app purchasing. Amazon *must* make subscriptions to my magazine available in the kindle app, and *must* make them the same price as the amazon kindle store price.

Now, I, mr magazine publisher, *must* either pay apple 30% for every in-app sub on iOS, or pay amazon for paying them on my behalf - somehow, I doubt amazon is going to eat the cost.

I don't even have the luxury of not making my sub available on iOS, unless I pull out from kindle entirely and set up my app infrastructure that never goes via iOS - and I can't access kindle devices easily any more, as it's quite hard if not impossible to get updating content on kindle e-readers without going through amazon.

So I either suck up an extra 30% apple tax for iOS users that use it, for doing bupkiss, because I sell magazine subs via amazon/kindle, or I pull out of the entire market and go it alone.

What people are objecting to is the forced nature of this. If in-app purchases were optional, and people *could* use non-in-app methods without facing paying the 30% on those purchases - at the *same price*, or having to pull their entire app from iOS to avoid it -or could even get apps on there legitimately without using the app store - people wouldn't be calling this extortionate, apple-tax rent-seeking.
posted by ArkhanJG at 11:11 AM on February 15, 2011 [28 favorites]

My bold for emphasis, of course Amazon hits publishers for a discount on ebooks, Amazon is doing the most of publisher's job. For a self-published book, the Amazon hit to the author is far less than traditional publishing. Amazon has never cared what I price my self-published ebooks at. Of course that means I'm responsible for editing and marketing myself, and have no one to blame if there are never any sales.

I'm genuinely curious, what's Amazon's cut of your self-published stuff? And in light of this new step of extortion, will Apple's 30% come out of your share or theirs?

That is, suppose you're selling a book for a dollar, for which you're contractually obligated to receive X cents of every sale from Amazon. Someone mentioned above that Amazon gets 30% of e-book sales, so let's go with that - you get 70 cents, Amazon gets 30. What happens with this new sale? Apple gets 30 cents, we know that. Does Amazon get 30 and you drop down to 40? Or do you stay at 70, and Amazon is suddenly getting 0? If it's the latter, are you going to start seeing a squeeze on future publishing contracts so that Amazon is still making money off of providing the distribution platform? Or is it somewhere inbetween, maybe you get 70% of what's now 70 cents, so Amazon gets 21 and you get 49. It's not like they can just charge $1.30 for the in-app sale, so Apple's protection money gets paid without Amazon or you losing money.

And make no mistake, folks, this is Amazon's distribution platform. Amazon writes the app, which contacts Amazon's servers to authorize the sale and downloads the book from Amazon's servers. Apple has nothing to do with it except the OS and hardware you're trying to read your book on.
posted by kafziel at 11:13 AM on February 15, 2011

The attempts to depict Apple as illegally or unethically leveraging one monopoly in another market highlight an interesting problem for the content industry and the DoJ: Apple's has a functional monopoly on well-designed tablet computers that lets them operate like a monopoly in that market but which is invisible to the law. When the market segregates itself based on taste, so that there are available alternatives to one seller's product but most of the desirable customers are using that platform not because of network externalities or first-mover advantage but simply because of greater perceived inherent value, the law really has nothing to say.
posted by nicwolff at 11:15 AM on February 15, 2011 [5 favorites]

I fail to see the difference between the apple official statement, and what Artw put in the head.

Artw: [P]ublishers must go through Apple, paying the 30% "Apple tax"

Apple: Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app.

These two statements are not congruent.

It might be worthwhile to read what Apple actually says, as opposed to what filters through third parties, one of which has a bit of a conflict of interest on the subject.
posted by Blazecock Pileon at 11:20 AM on February 15, 2011

Everybody's talking about Apple's marketing and distribution costs, and I understand that for apps in the App Store, but I don't buy it for in-app purchases.
posted by kmz at 11:20 AM on February 15, 2011 [1 favorite]

Apple's has a functional monopoly on well-designed tablet computers

We need an equal protection clause for crappy OS-es.
posted by Joe Beese at 11:22 AM on February 15, 2011 [2 favorites]

wierdo: "Didn't you pay for that when you bought your device? Why do you insist on paying again and again?"

Yes, they paid for a device with a good UI. Now they're going to pay for additional content on that device; if they don't want the content, they can use the device without it. So no, you have not already paid for this content when you bought the device, nor have you paid for Apple making the content available in a convenient way.

If Apple can make money on content distribution, that will help keep device prices down and/or give Apple a strong incentive towards being the first to release new services. This is not double-charging, this is an innovation that people are willing to pay for.
posted by Tehhund at 11:23 AM on February 15, 2011

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

Publishers must go through Apple, paying the 30% apple tax

Seems fairly congruent to me. You sell subs? You *must* sell subs via in-app, and such sales *must* go through Apple, paying the 30% apple tax.

Which bit of that is hard to follow?
posted by ArkhanJG at 11:24 AM on February 15, 2011

Oops, forgot to terminate my Italics. Last sentence comes across more grarr than intended.
posted by ArkhanJG at 11:24 AM on February 15, 2011

Let's say the Kindle 4 allows apps. Will Amazon let the Apple iBooks app into its marketplace? Will Amazon allow the Apple app to make in-app purchases? Would Amazon allow B&N and Borders apps? But that's silly, the Kindle is just an ereader.

Everybody's talking about Apple's marketing and distribution costs, and I understand that for apps in the App Store, but I don't buy it for in-app purchases.

One could say the app promotion helps sell subscriptions. Almost 100% of the reader apps are free so Apple got nothing from the millions of app downloads.

And there's the credit card interchange fees and infrastructure. And there's some profit taking. Apple isn't a nonprofit corporation.
posted by birdherder at 11:25 AM on February 15, 2011

FWIW, I haven't even read the wired story - I read about this last week elsewhere, which was a direct quote from apple, and the same as the apple official statement you quoted earlier BP. So I'm only using apple's own statements to make my judgement, so you can feel free to drop the accusations of bias, thanks.
posted by ArkhanJG at 11:28 AM on February 15, 2011

This will probably not be the case by Q2 2012.

That seems optimistic.

Given how long it took Windows to catch up with the Mac OS, I wouldn't expect parity for more like 3 years.
posted by Joe Beese at 11:32 AM on February 15, 2011

My bold for emphasis, of course Amazon hits publishers for a discount on ebooks, Amazon is doing the most of publisher's job.

Whaaaat? Amazon is doing most of acquiring the manuscript, editing it, copyediting it, typesetting it, hiring an artist, commissioning cover art, finding authors to give blurbs, buying paper, printing the book and jacket, and marketing the book?

As far as I can tell, Amazon is doing precisely none of the publisher's job.
posted by Justinian at 11:34 AM on February 15, 2011 [1 favorite]

Seems fairly congruent to me.

You're not responding to what I cited, which is fairly straightforward and clear language. Other than that, I'll suggest that people who plan on forming a strong opinion on this — one way or another — would do well to read what Apple actually said, instead of getting their opinions from a third-party giving a factually wrong summary of what this is.
posted by Blazecock Pileon at 11:34 AM on February 15, 2011

Well, that's a bummer, because I'm expecting to pick up the new iPad Deux when it comes out. Ironically, I'm doing it because I'm giving up on my paper tree subscriptions and want a nice shiny iPad to read them in.

The whole "You can sell it elsewhere but you have to sell it in our garden for the same price to the customer but we get 30%" is just plain shitty. I don't think it's illegal, but I think it's totally shitty. Gonna be an interesting few years..
posted by cavalier at 11:37 AM on February 15, 2011

When the market segregates itself based on taste, so that there are available alternatives to one seller's product but most of the desirable customers are using that platform not because of network externalities or first-mover advantage but simply because of greater perceived inherent value, the law really has nothing to say.

The law shouldn't have anything to say in a case like that. It isn't the law's job to tell people that they make too good of a product. Apple isn't stifling competition here; anyone is free to make a better piece of hardware. If they can't, then Apple deserves to be able to charge a buttload of money.
posted by Justinian at 11:38 AM on February 15, 2011 [2 favorites]

I'm genuinely curious, what's Amazon's cut of your self-published stuff? ...
That is, suppose you're selling a book for a dollar, for which you're contractually obligated to receive X cents of every sale from Amazon. Someone mentioned above that Amazon gets 30% of e-book sales, so let's go with that

Those are the same numbers Amazon uses with me. Their marketing-to-authors emails like to call it "70% Royalty" rather than "30% commission", same diff.

It's worth noting that none of the kindle Apps support magazine subscriptions. You can only get those delivered to actual kindle hardware devices, so a lot of this brouhaha is purely theoretical supposition based on the idea that someday Amazon will allow subscriptions to non-kindle-hardware platforms, something they've given no indication to magazine publishers that they intend to support anytime soon, from what I hear.
posted by nomisxid at 11:38 AM on February 15, 2011

I'd be very surprised if there weren't android tablets similar to the ipad by the end of this year.
posted by meta87 at 11:39 AM on February 15, 2011 [1 favorite]

Why is this an issue? They're using Apple's technology and distribution platform and Apple is charging for it. There's no need to use it if you don't want to, but you're going to need to build your own subscription platform and generate your own traffic.

Apple is stating that ANY digital purchase made on an Apple product, even if it's via the web currently, must now be through the App Store. Not only that, they're stating that developers may no longer provide links to purchase content outside the app:

"In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."

That's a pretty invasive policy. It's also harmful to an open web, where anybody can setup a store and sell digital content.

From a indie game-developers standpoint, this is also very troubling. In-game purchases on social games are often impulse purchases. With PayPal's new micropayment system, the barrier to create and fund small indie social games has been greatly reduced. A 30% markup will impact this marketplace.
posted by formless at 11:40 AM on February 15, 2011

Err, not quite 30% markup, meant their 30% cut of the sale.
posted by formless at 11:42 AM on February 15, 2011

I'd be very surprised if there weren't android tablets similar to the ipad by the end of this year.

Samsung makes one, but Wired doesn't seem to think too much of the build quality. The mail application in the Samsung tablet is an almost direct copy of the iOS Mail app, widget for widget, as well as for layout. We'll see more clones coming by the 2011 holidays. Maybe a WebOS tablet, if there aren't any technical delays.
posted by Blazecock Pileon at 11:44 AM on February 15, 2011

"However there is a sting in the tail - publishers must go through Apple, paying the 30% "Apple tax"."

(Wow. What a surprise.)

Apple's vision of the future is getting their 30% on all of Microsoft's latest releases.
posted by markkraft at 11:45 AM on February 15, 2011 [1 favorite]

The mail application in the Samsung tablet is an almost direct copy of the iOS Mail app, widget for widget, as well as for layout

List of messages in the left panel, message content in the right panel. Boy, Apple must have had a team of rocket surgeons assigned to that one!

*bleh*
posted by SweetJesus at 11:48 AM on February 15, 2011 [8 favorites]

Whaaaat? Amazon is doing most of acquiring the manuscript, editing it, copyediting it, typesetting it, hiring an artist, commissioning cover art, finding authors to give blurbs, buying paper, printing the book and jacket, and marketing the book?

As far as I can tell, Amazon is doing precisely none of the publisher's job.

You did read the rest of my sentence where I pointed out that editing and marketing would be my problem, right? I'm not clear why you think Amazon should buy paper or do typesetting for an E-book. Amazon IS doing the distribution system and provides the review system so that real readers can leave me all the blurbs an author could hope for. Add in that Amazon will actually do some 'free' marketing for you, if your product has value to customers, along the lines of "customers who bought X also buy Y" links where Y is my product, and they sure seem to be providing me value for their cut.
posted by nomisxid at 11:51 AM on February 15, 2011

Blazecock Pileon: I suggest we carry this on in meta, rather than continue to derail here.
posted by ArkhanJG at 11:55 AM on February 15, 2011

I'd be very surprised if there weren't android tablets similar to the ipad by the end of this year.

He said well designed.
posted by Threeway Handshake at 11:59 AM on February 15, 2011 [1 favorite]

"Unless the last link in the FPP is lying, then this new policy means that if Amazon wants to continue offering the Kindle app, they will be required to offer books within-app with the Apple tax."

I believe the operative issue here is one that you leave out -- if they sell books in-app, they must do so at the same price that they do on their web site. That means there is almost zero incentive for them to add in-app purchasing to the Kindle App, because they'd be saving their customers a few clicks but losing 30% to the Apple Tax.

...Which leaves them with things working the way they do right now.

Am I missing something?
posted by verb at 12:02 PM on February 15, 2011

I could rant about this, but I'll just say that I've had an idea for a while of something that might be disruptive in this space, and if you already publish electronically or know somebody who does and are curious, please send me a mefimail.
posted by weston at 12:12 PM on February 15, 2011

I could rant about this, but I'll just say that I've had an idea for a while of something that might be disruptive in this space, and if you already publish electronically or know somebody who does and are curious, please send me a mefimail.

What's your finder's fee?
posted by Threeway Handshake at 12:14 PM on February 15, 2011 [3 favorites]

Am I missing something?

According to the last link, if Amazon offers books for sale external to the app, they must also offer those books for sale in-app. Now, this does contradict the official Apple statement somewhat in that the Apple statement only talks about subscriptions. But whoever wrote the last link claims that they have heard from sources this policy will apply to other forms of in-app content as well.

Whether that is to be believed is, I think, a crucial part of this debate. (Though even if it's just for subscriptions it's still pretty shitty, but not as egregious, I think.)
posted by kmz at 12:14 PM on February 15, 2011 [1 favorite]

According to the last link, if Amazon offers books for sale external to the app, they must also offer those books for sale in-app. Now, this does contradict the official Apple statement somewhat in that the Apple statement only talks about subscriptions. But whoever wrote the last link claims that they have heard from sources this policy will apply to other forms of in-app content as well.

Yeah, I'd want better confirmation than just "I've heard from sources" before busting out the pitchforks and torches. Apple would deserve to get smacked down if they made it impossible to give users access to externally purchased content on an iOS device; would that include dropbox accounts, skype subscriptions, and so on?

I can certainly understand someone saying, "If X means Y, it's terrible news--" but one anonymous source asserting that it does, even when Apple says it doesn't, strikes me as a bit premature.
posted by verb at 12:23 PM on February 15, 2011

Apple's statement: Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. (and pay the 30%

Artw's post: publishers must go through Apple, paying the 30% "Apple tax".

Those two statements are the same. To say they are not is 'factually incorrect', as you put it.

You also accused Artw - and myself - of spreading factually incorrect information, having got that information from a biased third party - and thus the implication there is that I and Artw are biased for saying so. Or you know, that we're liars.

I felt this was better discussed in the grey, not the blue, but

That thread is something I will not participate in, sorry. I cited facts that contradict the wording of Artw's post. It's unfortunate that you will not accept that, but it certainly not off-topic (in fact, it is entirely on-topic) nor is it a derail. And that is as much as I choose to say on the subject of your call-out.

You are factually incorrect. I thought it better to say you're being factually incorrect in the grey, and you could carry on that derail in the grey, or indeed say that you didn't intend to call Artw and myself liars and biased by implication. But heyho.

I don't plan to respond any further in this thread.
posted by ArkhanJG at 12:27 PM on February 15, 2011

would that include dropbox accounts, skype subscriptions, and so on?

I would personally be curious how that would affect potential S3 or Google Drive clients, which bill the user for every x number of HTTP requests and per-GB data transfer. It might be pretty difficult to monetize these transactions. The merchant fees would probably cost more than the fraction of a penny from a typical remote drive access session.
posted by Blazecock Pileon at 12:28 PM on February 15, 2011

Actually, I just took a closer look at what the linked article says:

"...These apps will no longer be able to link to purchasing apparatus external to the app, i.e. via a website. This is bad news for the Kindle app, and others who up to now have got around Apple's rules."

That appears to be the crux of the matter. Right now you can purchase content on the web, and it immediately appears on your iOS device's kindle app. But the Kindle app also has a 'Store' button that links to the Amazon.com web site. The change the linked article says "his sources have confirmed" is that Amazon would have to take that button away, or sell the books in the iBooks store as well.

The issue at play is not, even according to the linked article, about whether Amazon would have to remove the Kindle app from iOS or pay a surcharge. It's about whether they can have a 'Kindle Store' button in the Kindle app that links off to a web site, rather than an actual in-app store.

It's annoying and crummy, but it's not the end of the Kindle on iOS unless Amazon wants to take its app and go home entirely.
posted by verb at 12:29 PM on February 15, 2011 [2 favorites]

Is 30% more than the markup to two or three layers of middle men in conventional magazine publishing? I would have guessed 50% would have been typical.

I co-owned a business that sold magazine subscriptions.* In large circulation periodicals ads are where the money is made, subscription and newsstand fees are just a bar that is set to ensure that the people who buy the magazine are in the target demographic. You can see this in the lower prices for home delivery (where they know your zip code and use that to show advertisers that you are likely the target demo for their ads) vs. newsstand price.

Where magazines have a smaller circulation the price is higher because there is less ad revenue (if any) and the subscriber, rather than the advertiser, is paying for the content.

The price resellers pay for magazines is inversely proportional to the popularity of the magazine.

Our purchase price for 26 issues of Rolling Stone was 2 cents per issue^ which put our margin before expenses at around 3000%, our purchase price for more obscure magazines could go to over 100 times that amount which would put it right in line with the percentage Apple is charging.

It makes sense, the bigger magazines already have a name and lots of resources and web presence that is ad supported. Apple couldn't possibly force themselves into a middleman position. Apple is targeting the publications that don't have widespread appeal and are supported by people willing to pay for content.

*Ick I know - sold my interest 7 years ago thank you.
^Guess what everyone got for Christmas.
posted by vapidave at 12:39 PM on February 15, 2011 [2 favorites]

Does anyone think this will push more publishers to the web? Publishing to the web is free, you pay no Apple tax, the user can put an icon on the device via the bookmarking feature, which is arguably just as easy as 'purchasing' via an App store.
posted by gen at 12:42 PM on February 15, 2011

publishers must go through Apple, paying the 30% "Apple tax".
of course publishers are free to pay the printers tax instead. and salesstand tax. and delivery tax. and paper tax. and ... why on earth call this a tax? that's a silly moniker.
posted by krautland at 12:42 PM on February 15, 2011 [4 favorites]

Does anyone think this will push more publishers to the web? Publishing to the web is free, you pay no Apple tax, the user can put an icon on the device via the bookmarking feature, which is arguably just as easy as 'purchasing' via an App store.

As an iOS user and a fan of the App Store model, this would be fantastic. The tendency to spin off dedicated platform-specific apps rather than building good mobile and device-independent web sites is the 'Make an interactive CD-ROM!' of our generation. It looks flashy but it's a crap model long term.
posted by verb at 12:45 PM on February 15, 2011 [9 favorites]

why on earth call this a tax?
My favorite TLA.
posted by Threeway Handshake at 12:49 PM on February 15, 2011

of course publishers are free to pay the printers tax instead. and salesstand tax. and delivery tax. and paper tax. and ... why on earth call this a tax? that's a silly moniker.

Because it's a mandatory payment required to participate? Sounds apt to me. It's not a literal tax, but it is a figurative tax, and intuitively serves similar purpose, to support some structure that makes the sale and distribution of the work possible.

What get me about all this is that really, anyone can publish digitally. Most of the major word processors now are capable of printing to PDF. Even the Kindle can read those. Additionally, it's not hard to convert a Word DOC into Kindle or EPUB, then put that on your website.

I think the real issue here is getting your document in a publisher's storefront site, in which case the "tax," although still high, seems a little more justified.
posted by JHarris at 12:49 PM on February 15, 2011

gen: Does anyone think this will push more publishers to the web? Publishing to the web is free, you pay no Apple tax, the user can put an icon on the device via the bookmarking feature, which is arguably just as easy as 'purchasing' via an App store.

verb: As an iOS user and a fan of the App Store model, this would be fantastic. The tendency to spin off dedicated platform-specific apps rather than building good mobile and device-independent web sites is the 'Make an interactive CD-ROM!' of our generation. It looks flashy but it's a crap model long term.

I used to share this sentiment. Then this AskMe changed my mind - people really love apps. As much as I prefer mobile sites, I feel certain that apps are going to be a major method content distribution and this announcement is huge.
posted by Tehhund at 12:49 PM on February 15, 2011 [1 favorite]

Because it's a mandatory payment required to participate?

Commonly referred to as a price, but without the emotional baggage.
posted by Llama-Lime at 12:53 PM on February 15, 2011 [1 favorite]

As an iOS user and a fan of the App Store model, this would be fantastic. The tendency to spin off dedicated platform-specific apps rather than building good mobile and device-independent web sites is the 'Make an interactive CD-ROM!' of our generation. It looks flashy but it's a crap model long term.

I'd suggest cacheing. If you go through a browser, you must have a link at that precise moment. As someone who lives in an area with shitty coverage and metered 3G, I like to pull down articles etc in a newsreader via wifi at home, then I can read them offline elsewhere later. The same applies to my app that I use for notes - it syncs when it has connectivity, but otherwise works off the local copy, so I can read and add notes while offline.

I nearly cried tears of joy when evernote added offline functionality, instead of requiring an always-on connection.
posted by ArkhanJG at 12:53 PM on February 15, 2011 [1 favorite]

Tenhund: As much as I prefer mobile sites, I feel certain that apps are going to be a major method content distribution and this announcement is huge.

Thanks for the link to that AskMe.

That said, if the choice is paying a 30% Apple iOS 'tax' or providing it the way you want to via the web, aren't more people/businesses going to choose the web?
posted by gen at 12:53 PM on February 15, 2011

Yeah, I was one of the people who weighed in on the pro-app side in that question too, but I'm still deeply skeptical of "Web content" being turned into "App." A lot of the sites that are getting buzz these days are really applications and services that are being implemented as HTML/CSS/JS based thin clients. Twitter, Dropbox, Remember The Milk, Last.FM, and so on are all good examples. Performance on those tools can be improved dramatically by making them native apps.

Primarily content-focused sites like news magazines, political commentary sites, newspapers, and so on, are much crummier fits. I'm actually co-presenting with another content strategy expert on this very subject at a conference in June, and hope to have some better polished data to support the strong opinion by then. ;-)
posted by verb at 12:54 PM on February 15, 2011 [1 favorite]

Does anyone think this will push more publishers to the web?

That would seem to promote HTML standards, which would be good for everyone — both creators and consumers.
posted by Blazecock Pileon at 12:54 PM on February 15, 2011 [1 favorite]

In large circulation periodicals ads are where the money is made, subscription and newsstand fees are just a bar that is set to ensure that the people who buy the magazine are in the target demographic.

I have known of this explanation for many years now, and I have always been dubious of it. What on earth reason would an advertiser have to limit the number of people exposed to an ad? Of course their target audience is more well-heeled, but there is no reason to prevent us paupers from seeing the damn things.

I have a friend who was given a subscription to TIME, and every issue the first thing done is the ceremonial ripping out of the ads. Some of you might think this is an overreaction, but damn if I haven't started considering doing the same thing, if just to reduce the clutter in an already over-cluttered magazine.
posted by JHarris at 12:54 PM on February 15, 2011

"I nearly cried tears of joy when evernote added offline functionality, instead of requiring an always-on connection."

Yeah, that's one of the reasons I use the Reeder RSS app to read almost everything. I can pop it open, tell it to pre-cache all of the news in my 150 feeds or so, and keep myself busy for the bulk of a cross-country flight...
posted by verb at 12:55 PM on February 15, 2011

Tehhund wrote: "Now they're going to pay for additional content on that device; if they don't want the content, they can use the device without it. So no, you have not already paid for this content when you bought the device, nor have you paid for Apple making the content available in a convenient way"

Yeah..they're paying Apple for stuff that doesn't come from Apple. Very odd, that. I call it double-charging to pay Apple to get an iPad and then pay Apple again for the privilege of reading a magazine on it. But what do I know?
posted by wierdo at 12:55 PM on February 15, 2011 [3 favorites]

Commonly referred to as a price, but without the emotional baggage.

As if price doesn't have its own baggage.

It's imposed in a manner similar to a government imposing a tax, from the top-down, by fiat, largely disassociated from the real costs involved.

Anyway, language is flexible.
posted by JHarris at 12:58 PM on February 15, 2011

Yeah..they're paying Apple for stuff that doesn't come from Apple. Very odd, that. I call it double-charging to pay Apple to get an iPad and then pay Apple again for the privilege of reading a magazine on it. But what do I know?

Do you feel the same about Amazon?
posted by Threeway Handshake at 12:58 PM on February 15, 2011 [1 favorite]

It's imposed in a manner similar to a government imposing a tax, from the top-down, by fiat, largely disassociated from the real costs involved.

Sounds like purchasing gasoline for one's car.
posted by Blazecock Pileon at 1:01 PM on February 15, 2011

Sounds like purchasing gasoline for one's car.

Sounds like purchasing every single product ever that was not produced by the person directly selling it to you.
posted by Threeway Handshake at 1:04 PM on February 15, 2011 [1 favorite]

Actually, I take that back. Even if the person directly selling it to you, they had to have marked it up for "creation tax" or whatever, and they had to buy the materials elsewhere to produce the thing. And they probably aren't selling it at a loss.
posted by Threeway Handshake at 1:05 PM on February 15, 2011 [1 favorite]

JHarris, that's how nearly all prices are set: charge based on the nebulous concept of "value," not on costs. This is pretty much the first rule of business. And the price of 30% perfectly in line with nearest competitor, Kindle, so it's not like Apple is coercing anyone here. The only reason to call it a tax rather than the more appropriate term of "price" is to inflame debate and distract from the facts at hand.
posted by Llama-Lime at 1:07 PM on February 15, 2011 [2 favorites]

Those two statements are the same.

Artw's strong implication in the post that the only way publishers can sell subscriptions is through the Apple Store is not true. If he did not mean to imply that, then he can say so and I think this argument is moot. Otherwise though I think you have to admit that his implication is not an accurate description of Apple's policy.

Publishers are free to sell subscriptions to customers who come to their Web sites and Apple gets nothing. From subscribers that Apple delivers to the publisher, they want 30%, which is not more than other subscription-fulfillment vendors charge; and if a publisher is going to take advantage of that, they may not undersell elsewhere the price offered through Apple and may not link from the app to their competing offering.

That's quite different from "publishers must go through Apple", which clearly implies that Apple will get 30% of all subscriptions.
posted by nicwolff at 1:09 PM on February 15, 2011 [2 favorites]

Yeah..they're paying Apple for stuff that doesn't come from Apple. Very odd, that. I call it double-charging to pay Apple to get an iPad and then pay Apple again for the privilege of reading a magazine on it. But what do I know?

Potato, Potahto. One man's distribution channel is another man's grand theft.

Besides, you're not paying for the privilege of reading a magazine. You could do that in a web page or as a PDF if the content providers made those options available to you. That's their problem, not Apple's. You're paying for a magazine where the payment is handled by Apple in a convenient manner and enabled by Apple's talent for making things (currently, apps, music, and video) available to users in a consistent manner.

Is apple's take exorbitant? Yes, I'll agree that 30% is extremely high. But there's nothing illegal or immoral about it. They're charging what they can for a service - morality only comes into it when there's shady dealings or the service is a basic human need, and this doesn't fit those tests. In this case, even though I'm not a big free market rah-rah, I think the market needs to take care of this one. I won't be purchasing content through the App Store just like I won't be purchasing through iTunes, but I'm not going to argue with Apple making a good feature available on a good OS and then charging for the convenience. If you don't like it, buy from Amazon and read on Android.
posted by Tehhund at 1:13 PM on February 15, 2011 [1 favorite]

Lets look at it from a users perspective first.

I love my iPad and iPhone. I'm a fair user of paid services/goods; I consume a lot of kindle books, have a netflix subscription, a cooks illustrated subscription as examples. I bought all of these things outside of the app, and use them outside of the iPad/iPhone. The prospect of getting a very nice interface to these services/goods via the iPad was very much part of the value proposition to me in buying the device. I very much doubt any of those services will be up for giving Apple 30% off the top, so they will eventually decline to be on the platform (outside of any web-only offerings).

If that happens, the current iPad will be my last iPad; not because I don't love it anymore, but because I bought it for those kinds of services.

I understand Apple's position: Basically, people can "give away" all their apps and then provide out-of-app purchase of an upgrade, levels, books, what have you. Meanwhile apple is spending money to host/deliver/etc that app. So they close the loophole; but they closed it the wrong way. Maybe if they had a max on the amount (30% up to 100,000) or even possibly based one downloads (30% upto $0.25/app download) for the in-app purchases to ensure they were done in altogather. Dunno the solution.

But I do know that I, as the consumer, won't pony up for another one if they don't bit the bullet and undo this policy, even if they do lose app store money.
posted by Bovine Love at 1:17 PM on February 15, 2011 [3 favorites]

I'll agree that 30% is extremely high.

High as opposed to Amazon's 30-35%?
posted by Threeway Handshake at 1:20 PM on February 15, 2011

"The prospect of getting a very nice interface to these services/goods via the iPad was very much part of the value proposition to me in buying the device. I very much doubt any of those services will be up for giving Apple 30% off the top, so they will eventually decline to be on the platform (outside of any web-only offerings)."

The issue being debated right now, though, isn't whether those services will have to start paying Apple 30%. It's whether they can offer in-app purchasing of their content without using Apple's payment infrastructure. Right now, neither the Kindle app nor the Netflix app even attempt to do it: they are just apps that suck stuff in from an existing account that you create via other means. Not sure about Cook's Illustrated.

So, this is an important question but it's also not as sweeping as several of the commenters and article writers have made it out to be. This is not to say that Apple's approach is fundamentally good, just that there is a lot of hyperbole in play.
posted by verb at 1:25 PM on February 15, 2011

The Cooks Illustrated app (iPhone only) provides access to you web subscription in a very nice, polished way that exceeds the web content in usability.

I read the Apple provided information. I don't understand what the debate is; it is very clear for subscriptions:

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

Is 100% clear, and for sure Netflix and Cooks Illustrated (both are subscription based) violates their policy. Kindle, I'll give you, is less clear as it is not a subscription in the idea of a updating content over time.
posted by Bovine Love at 1:34 PM on February 15, 2011 [2 favorites]

I'll agree that 30% is extremely high.

High as opposed to Amazon's 30-35%?

Yeah, you're right - that olive branch to wierdo was not needed and made no sense. I'm not aware of any objective standard that says that 30% is high, though I'm no expert. I do think that once other platforms catch up, content producers will gain some leverage and Apple will have to drop that percentage or else content will always come out on other platforms first to avoid the 30% take. But that just means Apple is legitimately using their current position to fullest effect.
posted by Tehhund at 1:40 PM on February 15, 2011

It's whether they can offer in-app purchasing of their content without using Apple's payment infrastructure

Actually, I'd say it's about whether providers can offer out-of-app purchasing without also now having to set up in-app purchasing that goes through apple, has to cost the same or less as out of app sales, but gives apple 30%. Which apple seems quite clear on as being mandatory.

And what precisely qualifies as a subscription service that now requires also providing an apple version in app channel.

Where disagreement arises is very much whether this is a 30% tax or surcharge or price or what the hell ever you want to call it that is mandatory, because you must provide it if you do out-of-channel subs, and is thus an apple 'tax'

or whether still being allowed to have an out-of-app channel in addition to the in-app channel is apple being fair and only charging for bringing subs in via the app.

FWIW, if having in-app purchasing was optional if you also did subs elsewhere, I'd probably agree with this latter point of view - but apple is clear that two are linked, and apps must be re-written to comply.

At least now I understand that others fundamentally disagree on that point, which I couldn't understand how on earth they'd say that - and they couldn't understand why some people thought it *was* equivalent to what Artw said.

I don't think we can resolve that aside from to say opinion differs as to how much coercion apple is putting developers who do subs under here.
posted by ArkhanJG at 1:44 PM on February 15, 2011 [1 favorite]

but once the facts are reviewed, that doesn't seem to be the case, at all.

And having reviewed the facts, some people still disagree with that, think it very much is the case, and say apple is doing arm-twisting with this new policy. And some say they're wrong, and there's a massive difference.

So lets say there's disagreement on that, neither side will budge, but both sides have their point of view that is valid for them, and is the one true answer - for them. I do not think you can reasonably say the matter is settled, one side is wrong, and that's that, so I retract my previous position saying that.
posted by ArkhanJG at 1:49 PM on February 15, 2011

What on earth reason would an advertiser have to limit the number of people exposed to an ad?

The magazine sets its advertising rates based on how many readers they have, and it's in the advertisers interest to only pay for potential sales candidates. If I am charged $1/10,000 readers, and my product costs more than 5,000 of those readers can afford, I basically wasted half my advertising budget. I would be better off paying $2/10,000 to a magazine that guarantees everyone who reads it at least Could buy my product.

Basically, people can "give away" all their apps and then provide out-of-app purchase of an upgrade, levels, books, what have you. Meanwhile apple is spending money to host/deliver/etc that app.

I've always wondered how much a million downloads of a free app costs Apple over the lifetime of the app, because it's not just the initial download, it's a potentially endless stream of updates that cost Apple hardware to store and bandwidth to give away. Usually a loss-leader implies a cost to the seller that they expect to recoup with additional sales.
posted by nomisxid at 1:55 PM on February 15, 2011

I just had a bit of a discussion with another open source software developer I work with -- I'd summarize my position as "We all have to come to grips with the fact that Easy wins over Open, every time. Closed only loses when it complicates."

This is one of the first times that Apple has really run afoul of the "It complicates" problem in the iOS ecosystem. They're essentially forcing companies like Amazon to complicate their purchasing process if they want to maintain their revenue model. That, I think, is what makes this particularly interesting.
posted by verb at 2:02 PM on February 15, 2011 [17 favorites]

why on earth call this a tax?

If there's one thing I've learned from the GOP is that taxes are bad. Hence, when someone calls it a tax, they're saying it is bad.

Also, commission takes longer to type than tax.
posted by birdherder at 2:05 PM on February 15, 2011 [3 favorites]

But I do know that I, as the consumer, won't pony up for another one if they don't bit the bullet and undo this policy, even if they do lose app store money.

I doubt this. I mean, I understand that you feel this way on hearing that Apple is charging 30%, but at the end of the day, you're not going to ask yourself "is Apple's take usurious?", you're going to say "I can get X by paying Y--is it worth it to me?" If it is, you'll buy it, and if it isn't, you won't. When the next iPad comes out, you'll look at the landscape of offerings and judge it by what's available for it at that point.

What I doubt that you or other consumers will do, in numbers large enough to matter, is formulate some fair cut for Apple and judge them by that number.
posted by fatbird at 2:07 PM on February 15, 2011

"We all have to come to grips with the fact that Easy wins over Open, every time. Closed only loses when it complicates."

verb, I wish I could favorite this twice. Years ago I had a coworker tell me that our company was hosed when an open source alternative came out in a few months. I should have said "You mean the one that runs in a terminal and isn't designed for mouse input? Yeah, I'm sure users will flock to it."

This is exactly what Apple is counting on - since they're banning links to purchase outside of the app, purchasing from the app is much easier than navigating to the right website and purchasing. So this closed, Apple-owns-you method will quickly become the user's preferred method because it's simple, and content distributors have to take it.
posted by Tehhund at 2:08 PM on February 15, 2011 [1 favorite]

They're essentially forcing companies like Amazon to complicate their purchasing process if they want to maintain their revenue model. That, I think, is what makes this particularly interesting.

This is why I suspect that nothing will happen to cloud file services, at least until the pricing model changes where it can be efficiently (profitably) monetized.
posted by Blazecock Pileon at 2:10 PM on February 15, 2011

What on earth reason would an advertiser have to limit the number of people exposed to an ad?

My speculation is this. I think there are two strategies at play: One is saturation for cheap nondurable products (Pepsi, Coke) where I think the constant reminder of ads makes or breaks a brand as opposed to those you don't hear about; the other is to place an ad where a niche consumer is likely to find an appropriate product in a niche they identify with.

Advertisers for expensive durable goods don't want to limit the number of people exposed but rather they want to specifically target the likely customers . BMW ads will have more impact in Car and Driver than in Real Simple and will serve to differentiate the subscribers of Car and Driver from those of Real Simple.
I think also that the cohort that subscribes to or reads any magazine unconsciously considers it a brand that they wear. It's as much who you are'nt as who you are.
The above is informed by the excellent Frontline: The Merchants of Cool.

But again I'm speculating.
posted by vapidave at 2:11 PM on February 15, 2011

"verb, I wish I could favorite this twice. Years ago I had a coworker tell me that our company was hosed when an open source alternative came out in a few months. I should have said "You mean the one that runs in a terminal and isn't designed for mouse input? Yeah, I'm sure users will flock to it.""

And I say that as a developer for a major open source project. The major clients we work with aren't attracted to "openness," they're attracted to the fact that openness makes it easier to customize the app to their needs. That's one of the reasons OSS has taken off for infrastructure but not for general consumer software, at least in most markets.
posted by verb at 2:16 PM on February 15, 2011 [2 favorites]

Forgive me if this has been covered. But does amazon get around this by wending you to the web to buy kindle books? I would pay for more instapaper editors picks, what's up guys , why only 3 picks a day. Give me like 10 and I'll pay.
posted by Ad hominem at 2:17 PM on February 15, 2011

Bovine Love's post is an excellent thought - if Apple isn't careful, content will be distributed by less expensive means, and their consumers will look even more at other platforms. Of course, Google could just add a similar requirement and charge 30% too, but since Google maintains less of a stranglehold over their app store I don't see that as being likely.
posted by Tehhund at 2:27 PM on February 15, 2011

Linking to the subscription content directly (avoiding the purchase trhough the app) would break the Apple agreement, Ad hominem. Presumably that would get an App pulled from the store.
posted by bonehead at 2:27 PM on February 15, 2011

Quick question: assuming this applies to Netflix, what if Netflix offers the usual $7.99 Watch Instantly package, and then charges $0.50 for an "iOS subscription" that enables watching on an iOS app. Then Netflix gives apple their $0.17 share of the iOS subscription?

While I assume that Apple will remove the app from their store if Netflix tries this, is attempting to sell an iOS add-on truly a violation of what Apple has laid out?
posted by Tehhund at 2:33 PM on February 15, 2011

I just had a bit of a discussion with another open source software developer I work with -- I'd summarize my position as "We all have to come to grips with the fact that Easy wins over Open, every time. Closed only loses when it complicates."

Or if all the good content is outside the closed system, surely? Which was AOL's problem.

I don't even have an iPhone and I don't buy into app culture, but I still chuck money like mad at Apple through my iTouch and Apple TV. I like my iTouch but I HATE iTunes. It's a complete pain in the arse, but getting non-iTunes music onto an iPod is even more of a pain in the arse and doesn't always work so I give in. And I don't want to change away from an iPod because I have really expensive iPod speakers. Apple TV has a woeful choice of films, no actual TV (in the UK) and an exceptionally irritating interface but Sky hasn't stepped up to the plate in terms of VOD because of its bandwidth restrictions and Virgin's TV interface is horrible. Why do I still use Apple products? Locked in and no hugely compelling alternative. And I'm a bit lazy.

But when the viable alternatives appear and I actually have a choice of where to get my music and films, you can bet I will be well shot of Apple products.

BTW, I'm reading this on a Samsung netbook running Windows and Chrome. Why aren't they getting a cut of the MeFi profits? Why is everyone so happy to accept the closed nature of the app-based mobile world when if the same was applied to the normal online world they'd be raging? A phone's just a little computer.
posted by Summer at 2:41 PM on February 15, 2011 [1 favorite]

One (no doubt unoriginal observation) I think that Steam (or someone using their model and seeming ideals) will build another garden outside the Apple wall. I think it's inevitable and you'll find me there amongst the unwashed.
posted by vapidave at 2:47 PM on February 15, 2011

One (no doubt unoriginal observation) I think that Steam (or someone using their model and seeming ideals) will build another garden outside the Apple wall.

Take a look at Cydia.
posted by Blazecock Pileon at 2:48 PM on February 15, 2011 [1 favorite]

While I assume that Apple will remove the app from their store if Netflix tries this, is attempting to sell an iOS add-on truly a violation of what Apple has laid out?

Apple allows in-app purchases that add functionality. The guidelines are here (PDF) for developers and other interested parties to read for themselves.
posted by Blazecock Pileon at 2:51 PM on February 15, 2011

Quick question: assuming this applies to Netflix, what if Netflix offers the usual $7.99 Watch Instantly package, and then charges $0.50 for an "iOS subscription" that enables watching on an iOS app. Then Netflix gives apple their $0.17 share of the iOS subscription?

Tehhund, I could be wrong but I suspect enforcing that in the way we're discussing would be foolhardy for Apple. Right now there are lots of web sites and internet based services that require a subscription fee, and offer an iPad or iPhone app for existing customers to access their stuff.

In the example you cited above, it's far more likely that Netflix would simply no longer offer its iOS application than allow Apple to take a 30% chomp out of its revenues. There are too many third-party web apps that offer iOS apps to give people a window onto their existing services.


Or if all the good content is outside the closed system, surely? Which was AOL's problem.

That's a particular flavor of "Easy" IMO. If the closed alternative makes it hard to get the thing you want, it's no longer easy. And that will be the real tipping point, IMO. If Apple plays its walled garden cards too aggressively, they risk pushing out content providers.
posted by verb at 3:00 PM on February 15, 2011 [2 favorites]

Although it is correct to say that companies can continue to sell subs outside the app and not give Apple a cut, let's face it, in practice 99% of iOS purchases will be done in app. You have to provide clear in app purchasing and you have to sell at the same price. So where you were doing in app purchases directly on a razor thin margin at $7 each that was just keeping your tiny startup above water, you now have to either sell in app at a 30% loss for $7, or increase your prices, both in app and outside, to $10.

People are getting all worked up about Amazon, but this will have a far greater effect on small companies like the previously alluded to Remember The Milk. Looking at the RTM site it looks like their "pro" subscription for $25 a year is availble in app and through their website as expected. One of those purchase methods helps the small company a lot more. Not being able to pass on that addition cost to the consumer is the part I'm against.
posted by markr at 3:00 PM on February 15, 2011 [1 favorite]

Is it even legal to force people to ensure their products will not be cheaper elsewhere?
posted by dng at 3:14 PM on February 15, 2011 [1 favorite]

Calling it a tax is factually wrong. BP is right. It is a fee. And the opponents are calling it a tax to make it seem bad. So BP is right on here.
posted by Ironmouth at 3:15 PM on February 15, 2011

I could be wrong but I suspect enforcing that in the way we're discussing would be foolhardy for Apple. Right now there are lots of web sites and internet based services that require a subscription fee, and offer an iPad or iPhone app for existing customers to access their stuff.

Excellent point. This may run afoul of lots of apps that have helped make iOS popular.

There's also an important distinction: as far as I can tell, this applies to subscriptions to digital content, not every subscription pricing model. The important thing is what you're paying for, not how you're paying. So while Dropbox's pricing is a subscription, it's not delivering any digital content (unless you're doing to include my own files in that definition, which is not my understanding "digital content"). Remember the Milk is similar: it's a service that happens to be sold on a subscription model. It does not deliver content, except what the user enters, so it's not included here.

Of course, I could be off-base. Maybe Apple is planning to take a piece of any recurring payments related to apps. That would be, as you said, foolhardy. But my sense is Apple is trying to squeeze content providers, not every service that requires a payment to renew the license.

(Plus, I work on enterprise software that has a free client app in the app store. Do you know how much 30% of our "subscription" i.e. yearly licensing costs is? Enough to freak out about, that's how much. I doubt Apple is planning on going after that market)
posted by Tehhund at 3:16 PM on February 15, 2011

Of course, I could be off-base. Maybe Apple is planning to take a piece of any recurring payments related to apps. That would be, as you said, foolhardy. But my sense is Apple is trying to squeeze content providers, not every service that requires a payment to renew the license.

Agreed. I strongly suspect that the end result will be the sort of fuzzy, frustrating back-room compromise that has long existed for various onerous app store guidelines. Netflix will get to squirm around the problem on semantic distinctions because it is a very nice 'Wow!' application for new iOS users. eBook and eMagazine publishers will have to toe the line, and either suck up the Apple overhead or compromise their user experience.
posted by verb at 3:19 PM on February 15, 2011 [2 favorites]

Is it even legal to force people to ensure their products will not be cheaper elsewhere?

Yes. Why would it be illegal? The force is applied entirely through the terms of a contract. Don't want to submit to the restriction? Don't sign the contract. It's quite common in distributor agreements--no retailer or distributor wants to occupy space with your product if you're just to undercut them elsewhere.
posted by fatbird at 3:30 PM on February 15, 2011 [2 favorites]

Threeway Handshake wrote: "Do you feel the same about Amazon?"

I would if it were impossible to get a book or magazine onto a Kindle without Amazon getting a cut, which it is not. Paying for convenience is one thing. Paying because you have no other option is another thing entirely.

nicwolff wrote: "and may not link from the app to their competing offering."

Why again does Apple get to control the content of third party applications?

Let me be clear: My problem is not with Apple setting whatever price they're comfortable with. It's with them also not allowing the third party developers/content providers to ignore Apple and go their own way and still have an in-app purchasing option with their own payment system that has fuck all to do with Apple.

What I'm saying is that Apple should not get ongoing revenue in any amount from people you choose to do business with merely for having sold you a device. If they're providing an actual service to these third parties (payment or distribution services) that's another kettle of fish entirely.

If it were Microsoft doing this, the feds would be all over their ass and most everybody would be in agreement that it's a shitty way to do business. Since it's Apple, the feds don't give a shit and there's a large cohort of folks who will lap it up.
posted by wierdo at 3:31 PM on February 15, 2011

Actually last time Apple pulled something like this they ended up backtracking to avoid EU antitrust investigation, so it's not like their affairs are completely unexamined.
posted by Artw at 3:34 PM on February 15, 2011

There's also an important distinction: as far as I can tell, this applies to subscriptions to digital content, not every subscription pricing model.

Yep, you're right, at this stage they only mention "content-based apps". It's going to be interesting to see what Amazon do here. They aren't going to be able to afford to sell books through iOS with Apple taking 30%, and they can't increase their prices to cover it.

Indeed is anyone going to be able to compete with iBooks or whatever it is called on iOS devices? Not that I can see.
posted by markr at 3:50 PM on February 15, 2011

BP is right. It is a fee. And the opponents are calling it a tax to make it seem bad. So BP is right on here.

I'll concede this. I'd much rather call it a gouge.
posted by weston at 3:51 PM on February 15, 2011 [1 favorite]

"Rent" is the term economists seem to use.
posted by bonehead at 3:53 PM on February 15, 2011

I'm not an expert, but I don't think this qualifies as rent-seeking. If Apple had a patent or monopoly that prevented others platforms from distributing content and then charged an exorbitant fee because no one was allowed to compete, that would be rent-seeking. As it is, others can certainly compete with Apple and Apple is betting that the market will bear their price for distributing content on iOS.
posted by Tehhund at 3:57 PM on February 15, 2011

Apple’s new subscription plan has a compliance deadline. June 30, according to a memo sent to publishers earlier this year. “For existing apps already in the App Store, we are providing a grace period to bring your app into compliance with this guideline,” it reads. “To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011.”

and from the NYT earlier this month:

Some application developers, including Sony, say Apple has told them they can no longer sell e-books within their apps unless the transactions go through Apple’s system. Apple rejected Sony’s iPhone application, which would have let people buy and read e-books from the Sony Reader Store.

Apple said on Tuesday that it was still allowing customers to read e-books they bought elsewhere within apps. For example, a Sony app could still access books the customer bought earlier from Sony’s store.

But Steve Haber, president of Sony’s digital reading division, said on Monday that Apple had told his company that from now on, all in-app purchases would have to go through Apple.

So if you sell content either as a one-off or now via subscription, you must make available in-app purchasing on iOS, which bills via the app store and apple gets 30%. Existing apps must be re-written to meet that requirement.

“We have not changed our developer terms or guidelines,” Trudy Muller, an Apple spokeswoman, said Tuesday. “We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.”

The big question of course, is what is 'content'? Apple say "Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc."

ebook sales appear to be included in that 'etc', or possibly via existing app store rules. Either way, if you're buying books (or music, or magazines, or video or etc) for an iOS app in future, you'll have to have a one-click option in app that apple takes a 30% cut of, or sell it externally, and less conveniently, for the same or higher price.

Of course, I could be off-base. Maybe Apple is planning to take a piece of any recurring payments related to apps. That would be, as you said, foolhardy. But my sense is Apple is trying to squeeze content providers, not every service that requires a payment to renew the license.

(Plus, I work on enterprise software that has a free client app in the app store. Do you know how much 30% of our "subscription" i.e. yearly licensing costs is? Enough to freak out about, that's how much. I doubt Apple is planning on going after that market)

I suspect you're right - Apple would be taking a big risk trying to get access to software subs that take place elsewhere, and provide access to said hosted software via a free app. Getting rid of the app would make a lot more financial sense than sharing 30% of eye-watering subs that might occur via a mandatory option of a one click in-app process.

What they want is a slice of the pie from the companies that sell 'consumable' data online, but only have a free app to deliver it - they want to force at least some of that revenue via the app store, and not be competing with the seller on their own website.

Where it will get real fuzzy is the smaller developers. Are subscriptions to site services 'content'? If it's 100% self-user generated, probably not. So dropbox, evernote, catch.com, remember the milk etc are probably safe. For now.

If it's a mixture of stuff, i.e. you provide a sub to gain access to material you post, and others post. AFAIK, facebook, and twitter don't charge subs. But say, a flickr or social-mediatype app that you need to subscribe to online in order to use the app in the first place. You've got user content, and other people's content. Does that mean you have to add a sub option using apple's API, and give apple their 30%?

Messy.
posted by ArkhanJG at 4:03 PM on February 15, 2011 [2 favorites]

Although I'd be the first to argue that Apple has the right to do this, it's also interesting to compare what's being done to Steve Jobs' original comments when the App Store debuted in 2008:

“We don’t intend to make any money off the App Store,” Jobs said. “We’re basically giving all the money to the developers and the 30 percent that pays for running the store, that’ll be great.”

Although the case could be made that distributing and billing for content purchases and subscriptions is just as infrastructure-intensive as app purchases, the crackdown on alternative purchasing mechanisms definitely puts Jobs' original claim in the Reality Distortion Field category.
posted by verb at 4:07 PM on February 15, 2011 [3 favorites]

I love how verb's article has "App Store" in quotes, because it's a mysterious and unknown idea. Man, things change fast.

Yep, mandatory participation clearly contradicts the "no profits" idea. And okay, maybe the app store was expensive to install and maintain. But they've had years to discover efficiencies and work on scaling their infrastructure in an economical way. They're definitely making out like bandits since app sales have skyrocketed and they're still charging the same per-app percentage.

But I don't begrudge them their profits. If the market will bear it, so be it. And there are competitors who can help drive down the price in the future, they just use other phone OS's.
posted by Tehhund at 4:20 PM on February 15, 2011

I believe it's not as messy as you seem to think, ArkhanJG:
1) In-app purchases must go through Apple's system, and they get their 30% cut.
2) If apps have a button that links to a web page for purchasing, the products available must also be able for purchasing through Apple (otherwise everyone would just route purchases through a single click on an external site to deny Apple their cut).
3) All other purchases that are conducted externally to the app are business as usual.

The likes of Dropbox will be unaffected. They just can't add a "subscribe" button in the app without giving Apple 30%.
Amazon will probably remove the link to the Kindle Store from their app, so people will just have to find their own way to the Amazon web site to make their purchases. They might choose to provide in-app purchases for a price that accounts for an Apple markup; that's up to them.
posted by nowonmai at 4:21 PM on February 15, 2011

Very substantial article on the Apple announcement here.
posted by Joe Beese at 4:30 PM on February 15, 2011

nowonmai, I think you're misreading the announcement. From Apple's memo:

In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app

So your #2 is off: such a link is explicitly banned.

Your #3 is also missing an important point. Purchases outside of the app are allowed. But if they exist, then purchases within the app must be enabled. I was confused about that for awhile too, but here's the quote from the memo:

if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app.

That's not talking about a link, that's talking about any purchasing mechanism outside of the app. So it appears that if Amazon wants to have Kindle app and sell Kindle books on the web, they are required to enable in-app purchases as well.
posted by Tehhund at 4:36 PM on February 15, 2011

I figured the phrase "Apple Tax" was riffing off of the phrase "Microsoft Tax," the fee for a windows license that is imposed on new PCs.

Also, "Apple Tax" was a phrase used by Microsoft back in 2008, used in a white paper to point out "the hidden costs that face those making the switch [to Apple products]".
posted by grandsham at 4:44 PM on February 15, 2011

Looks like Rhapsody is considering suing over the news. Since Apple doesn't have its own subscription music service, I wonder if Rhapsody has a legal basis for an antitrust challenge?
posted by Blazecock Pileon at 4:56 PM on February 15, 2011

God, the cognitive dissonance here is stifling! I mean, seriously, call it tax, gouging, demanding rights to the first-born, whatever... The sheer fact is that Apple is trying to get a cut out of any transaction that happens in-app, and is trying to enforce it in as clumsy, authoritarian a way as possible. The analogy here is not to PayPal, but to Steam; how would people here react if Microsoft started suddenly demanding a 30% cut on any game you purchase on Steam? What if Adobe Digital Editions were asked to remove a link to their website? It's ridiculous, is what it is. Just because Apple is doing this on a "well-designed" OS doesn't make it any different.

(Posting this from an iPad for what it's worth)
posted by the cydonian at 5:00 PM on February 15, 2011 [3 favorites]

Looks like Rhapsody is considering suing over the news. Since Apple doesn't have its own subscription music service, I wonder if Rhapsody has a legal basis for an antitrust challenge?

...

iTunes is a subscription music service.

Reality Distortion Field is in full swing today, I see.
posted by kafziel at 5:02 PM on February 15, 2011 [2 favorites]

Huh, that press release does indeed go completely against the interpretation I've been reading on sites such as MacWorld; I'd delete my comment if I could. As written, the press release makes no sense at all outside of a very narrow (an as yet poorly defined) definition of "subscription". I agree with the Techcrunch article that Joe Beese just linked that we need further clarification, and I think this has been very poorly handled by Apple (as have a lot of App Store issues, such as the capricious and arbitrary rejections etc.)
The current information really does look like it's Apple's intention to prevent me from being able to buy a book on my Kindle then sync it to the Kindle app on my iPhone without Amazon making their whole catalog available for purchase through Apple's system. That is so absurd that it beggars belief, and I find it hard to imagine that it will stick when all the dust from this has settled. It's insane enough to sink the platform.
The answer for Kindle, Netflix, Rhapsody et al. might be to pull their App store apps and build web apps or stick to a web interface. Or just pull their apps and encourage their customers to buy other devices. I can't see why it's in Apple's interest to force them to do that, though.
posted by nowonmai at 5:07 PM on February 15, 2011

iTunes is a subscription music service.

Reality Distortion Field is in full swing today, I see.

And it seems you've been affected as well. iTunes does not require (or even offers) a subscription. Rhapsody offers unlimited music streaming for a monthly fee. iTunes does not. If you want to buy a song, they'll be happy to sell you one. Or you can import your own music you purchased elsewhere. But there's not an ongoing subscription scheme.
posted by birdherder at 5:11 PM on February 15, 2011 [3 favorites]

"The current information really does look like it's Apple's intention to prevent me from being able to buy a book on my Kindle then sync it to the Kindle app on my iPhone without Amazon making their whole catalog available for purchase through Apple's system. That is so absurd that it beggars belief, and I find it hard to imagine that it will stick when all the dust from this has settled. It's insane enough to sink the platform."

Yeah, I'm not seeing that. I could be missing something, but based on my reading of Apple's press release rather than the second-and-third-source readings of it, it seems that only apps offering in-app purchases or in-app links to external stores would be affected.

The Netflix app offers neither of those. The Kindle App provides only the in-app link to an external store, and removing it would seem to put them in compliance. I'm not saying that my reading of the press release is authoritative, but most of the statements being made about it seem to be worst-case scenario theories. If they're true, Apple will suffer and iOS users will be inconvenienced. If they're not, we'll have the status quo.
posted by verb at 5:15 PM on February 15, 2011

"iTunes does not require (or even offers) a subscription."

It does for television shows, but not for music or movies.
posted by verb at 5:15 PM on February 15, 2011

The current information really does look like it's Apple's intention to prevent me from being able to buy a book on my Kindle then sync it to the Kindle app on my iPhone without Amazon making their whole catalog available for purchase through Apple's system. That is so absurd that it beggars belief, and I find it hard to imagine that it will stick when all the dust from this has settled. It's insane enough to sink the platform.

To be fair, I don't think it's quite that bad. If you buy a book on your kindle device, apple has nothing to do with that, and you can quite happily sync your app on iOS and read your book.

However, going by the Sony Reader decision, you won't be able to have a link in your kindle iOS app to amazon's kindle store - you'll only have a link to Apple's iTunes purchase, which will give apple a cut, and will be the same price that amazon sells the same book for on their site. I don't think anybody selling stuff elsewhere *has* to add an App Store only method of buying - only that that's the only way they can sell stuff in-app, if they choose to do so. So the only way to buy kindle books from within the kindle app on iOS, or sony books from their store, using sony reader on iOS, will be via the apple only method.

If it's a magazine, music, film, book, newspaper or etc ongoing *subscription* however, and you have an app that accesses that subscription, it *must* have an app store subscription link, at the same price or less than the website subscription. So a newspaper can't have a free iOS app to read their paper, but a website subscription model to actually get access to the newspaper, without also making that subscription available in-app with apple as the only method of doing so.

The big question is what they consider content, including in the 'etc'. as it's quite a vague definition of what will require an apple app store link as the only method of payment in-app, and which apps can leave that out altogether, since they can't put a link to their own service in-app.
posted by ArkhanJG at 5:21 PM on February 15, 2011

Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc....

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Don't netflix do subscriptions online? For access to streaming video via the app?

The Netflix app offers neither of those. The Kindle App provides only the in-app link to an external store, and removing it would seem to put them in compliance.

They will have to remove their instore link, yes. But video streaming subscriptions, made available via a website, seems to me will also have to be available via an in-app apple link, that then handles the transaction and repeat bills at whatever intervals are offered, and apple takes 30% of that - and the in-app subscription price cannot be higher than what netflix charge directly.

I don't get netflix in the UK, so if they only sell one off purchases in the app, i.e. tv episodes or films bought in the app via a weblink, and you can't take advantage of the 'stream x films for $y a month' subs off the website, then you are correct.
posted by ArkhanJG at 5:29 PM on February 15, 2011

verb: the crazy in the press release is here: "However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."
I've included a fuller quote than Tehhund did in reply to me, because it leaves little room for interpretation.

According to TechCrunch: "And yes, it seems that one-time in-app purchases like those made through Amazon for the Kindle will fall under the same rules."
This doesn't explicitly state the case regarding one-time out-of-app purchases, eg from a Kindle device.

Furthermore, I still don't know if services like Netflix fulfil Apple's definition of a "subscription" - it seems to me that there's a difference between a newspaper, where the full content is pushed to an app on a regular basis, and Netflix or Rhapsody where the subscription allows access to a content. Could Apple really expect to get 30% of you Netflix subscription in a month when you only watched streaming content on your Xbox? What if you only use the app to add items to your queue?

What about RSS readers that can read feeds from sites that have subscriptions, such as Metafilter, or that provide subscriber-only feeds?

There are more unanswered questions than answered here, and I think the only thing we know for sure is that Apple have screwed up on the communication front again.
posted by nowonmai at 5:33 PM on February 15, 2011

Rhapsody appears to be the first one bail. Could be posturing, of course, but I doubt it. These services are priced for direct sale, without a reseller. I imagine the most they could survive, price wise, would be a referral fee of a percent or two plus the Visa fee. In some cases, like Amazon, there are DRM and account issues as well; how does a company deliver a DRM solution to an anonymous customer?
posted by Bovine Love at 5:34 PM on February 15, 2011 [1 favorite]

ArkhanJG: To be fair, I don't think it's quite that bad. If you buy a book on your kindle device, apple has nothing to do with that, and you can quite happily sync your app on iOS and read your book.

That is what I was trying to articulate in my first post in this thread, but Tehhund and hades have convinced me that I was wrong. Now you and verb are swaying me back the other way! I don't know what to think any more. Wait and see, perhaps.
posted by nowonmai at 5:38 PM on February 15, 2011

There's two different things going on here - the first is in app purchases of one-off content; books, films, tv episodes, music tracks, one-off copies of a newspaper.

Going by the sony reader decision, and what publishers have been told, out-of app sales will continue as per normal. However, having the way to buy new one-off things in-app can't be a link to a website, which apple gets nothing from - it has to be an itunes link, and apple handles the billing, and gets a 30% cut of the price. AFAICT, the price has to be no more expensive than buying it from the website, i.e. you have to eat apple's 30%, but there's nothing stopping you having no way in-app of buying stuff at all. so amazon remove their link to the kindle store, and they're done. You buy your books manually via the iOS browser, or via other methods - only apple can provide in-app sales, but you don't have to have it at all if you want.

The 2nd one applies to subscriptions. If you offer a subscription service for content outside of your app, you must also have a subscription in your app, that uses apple, and no other in-app method.

So rhapsody offers streaming music subs on their website. Assuming Apple doesn't change or clarify their policy, to continue to offer an iOS rhapsody app they must put a subscription link in the app at the same or lower price, and apple must provide it.

If it's not subscription content, you don't need an in-app link to subscribe with; but if there is an in-app link to purchase a sub, or a one off purchase, it can only be to via apple's API, i.,e. itunes and apple get the 30%.
posted by ArkhanJG at 5:48 PM on February 15, 2011

Could Netflix do something like have two subscription models, one for whatever their standard system is, and a more expensive one that also allows streaming on iOS devices? Though I suspect a lot of customers would be unhappy about that, it might solve the problem of 30% of sales initially.
posted by jeather at 5:53 PM on February 15, 2011

ArkhanJG: Well that reading, if accurate, seems reasonable, depending on how "subscription" is defined, but other people are reading it differently. This article at Computerworld states quite confidently that Amazon will have to both remove the link to the Kindle Store, and offer there entire catalogue vie in-app purchase, if they want to keep the Kindle App in the store. Whether the author of the article knows any more than we do, I don't know.
posted by nowonmai at 5:56 PM on February 15, 2011 [1 favorite]

It occurs to me rather belatedly that Kindle offers subscriptions as well as ebook purchases, and this may be confusing the reporting of the issue. Perhaps Apple will try for their 30% cut of newspaper and magazine subscriptions delivered to the Kindle App, but not go after ebook content.
posted by nowonmai at 6:03 PM on February 15, 2011

"That is what I was trying to articulate in my first post in this thread, but Tehhund and hades have convinced me that I was wrong. Now you and verb are swaying me back the other way! I don't know what to think any more. Wait and see, perhaps."

Yeah, that's where I'm at: I'm not sure where things will pan out but I suspect Apple will ultimately back down with a "clarification." I'm more interested in the long-term ripple effects on FOSS communities; I'm hoping that they'll learn valuable lessons from this unfolding drama rather than taking it as an opportunity to finger-wag about openness vs. walled gardens.
posted by verb at 6:04 PM on February 15, 2011

Shit, it just occurs to me as I put on some music in my shop that my favorite streaming music supplier -- di.fm -- where I am a premium subscriber, will likely kill their iPhone app, which I use in my car a fair bit.

And, oh yeah, my Audible app which is very very handy, but will be eliminated (I am a book a month subscriber). Of course, I can still sync audible books to my phone and be ok, but the app was so much nicer.

Apple, seriously, fire the person who proposed this policy. They have taken their eye off the ball; people should user your service because it offers value, not because they have to.
posted by Bovine Love at 6:12 PM on February 15, 2011 [1 favorite]

Computerworld states quite confidently that Amazon will have to both remove the link to the Kindle Store, and offer there entire catalogue vie in-app purchase, if they want to keep the Kindle App in the store.

This is the way I've been reading it too. It doesn't seem to me that the "read your content on our device, buy it elsewhere" option will stand up under the current agreement terms, at least to me. It will be interesting to see if Apple sticks to it's guns here.
posted by bonehead at 6:13 PM on February 15, 2011

verb: More concerning for the non-apple customers is how the phone carriers will be looking at this - if Apple can get 30% of content delivered to iOS phones then why can't they go after something similar for their Android devices? Remember how they used to be able to charge $3 for ringtone downloads? It's definitely going to be an incentive for carriers - and OEMs, I guess - to make the available handsets less open, and ringfence their own app stores and content delivery pipes.
I'd worry that these kind of revenue streams might bring down handset prices of the less-than-open Android variants, and marginalise the properly open-as-in-neckbeard handsets.
posted by nowonmai at 6:15 PM on February 15, 2011 [3 favorites]

OMG Audible! They'll have some interesting opinions on this, being (a) owned by Amazon and (b) being the major (or exclusive?) supplier of audiobooks to the iTunes store.
posted by nowonmai at 6:22 PM on February 15, 2011

Computerworld states quite confidently that Amazon will have to both remove the link to the Kindle Store, and offer there entire catalogue vie in-app purchase, if they want to keep the Kindle App in the store.

Yeah, there's a lot of that going on. Going from the NYT article I linked earlier,

This article has been revised to reflect the following correction:

Correction: February 3, 2011

An article on Tuesday about Apple’s tightening of its control of the App Store misstated part of its policy. While the company is requiring e-book purchases within apps to go through its payment system, customers can still use apps to access e-books and other content they bought elsewhere. It is not the case that access to that content will be cut off.

So AFAICT, one-off purchases elsewhere can still be sync'd, as long as buying new ones is either an apple only link, or none. People assumed the same rules would apply to in-app purchases for all types of content, especially given the deadline to remove non-apple buy links in all current Apps, and refusing new apps that don't have one as the only method. Rules for one-off content, and ongoing subscriptions do appear to be different, going by what apple themselves have said.

Content subscriber services that offer an app, like rhapsody, netflix and newspaper reader apps that link to an existing subscription seem clearly boned under the current policy though - either they put in an apple link, or they pull the app altogether.

There may be ways round it; like only allowing iOS app access with a more expensive sub, as suggested - but that seems likely to fall afoul of the spirit of Apple's new rules, if not the letter of them; and Apple hold all the cards as long as the only way to get apps onto a non-jailbroken iDevice is the Apple controlled App Store.
posted by ArkhanJG at 6:27 PM on February 15, 2011

Arkhan, that correction does not say that they will not be required to add a in-app purchases. It is just saying that out-of-app purchases will remain available. I think you are applying some wishful thinking to the correction :) It is dodging and weaving, you can't fill in any blanks. It leaves the requirement for an in-app purchase unknown.
posted by Bovine Love at 6:31 PM on February 15, 2011

Hmm, you've a good point there Bovine Love. I haven't seen anything concrete that all apps that provide content will *have* to have only apple links, only subscription ones; but you're right, I've not seen anything that they won't, while still allowing out-of app purchases to still work.

Hmm. Somewhat of an irony given the rest of this evening, that I'm possibly being *too* charitable to Apple! Anyway, I think I've posted enough for one night.

Guess we'll have to wait and see what the final rules end up being...
posted by ArkhanJG at 6:38 PM on February 15, 2011

OK, one last thing. You're right Bovine Love and nowanmai and I'm wrong. iOS apps will have to have an in-app link to buy content via apple, whether it's sub-based or one-off. External subs and purchases will be allowed in the app - assuming the implement their own authorisation scheme - but they have to also offer an in-app link to the App Store, at the same price or lower.

So amazon will have to remove their current webpage link, AND make the entire catalog available via Apple - and eat the 30% cost - same as subscription accessing apps.

From Apple's spokesperson herself (same link nowanmai posted)

"Apple processes all payments, keeping the same 30% share that it does today for other In-App Purchases," the company said.

Later Tuesday, Apple spokeswoman Trudy Muller confirmed that those rules apply not only to newspaper and magazine publishers, but also to content sellers like Amazon.com, which offers a Kindle app for the iPhone, iPod Touch and iPad.

To meet Apple's guidelines, Amazon must remove its "Shop in Kindle Store" link from its Kindle application. That link, which opens the iOS browser and displays Amazon's Web-based e-bookstore, is currently the easiest way for Kindle app users to purchase new books.

Amazon did not immediately reply to a request for comment on the new rules, or answer questions about how customers will be able to buy books and whether it will continue to offer an iOS e-reader.

Sans the "Shop in Kindle Store" link, users can still purchase books outside of the App Store -- on Amazon's Web site, for instance, or through a non-Apple Kindle app -- then have them loaded to an iPhone or iPad.

Amazon must also implement Apple's single-click in-app purchasing of content; Apple would skim 30% off the top of all such purchases, however.

Guess I should have read nowanmai's link better!
posted by ArkhanJG at 6:47 PM on February 15, 2011

Sorry, sorry nowonmai.
posted by ArkhanJG at 6:49 PM on February 15, 2011

And, on top of that, those same in-app purchases would likely be unavailable on your other Kindle devices/apps as they would be bound to your Apple account (I think largely invisibly to Amazon) not your amazon account. Same for other schemes, such as Audible.

It would appear to be a serious blunder. If a bunch publicly follow Rhapsody, Apple will have a hard time saving face without doing their brand some damage, and giving the 'closed system' chorus a much larger voice. They need to correct it very soon. It'll be interesting to see how it plays out. I just wish I was an entirely disconnected observer; unfortunately, I have a dog in this race (the services I use)
posted by Bovine Love at 6:58 PM on February 15, 2011

I'm still not clear on the Kindle issue. According to the Apple rep quoted in the article:

"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase."

If "The Kindle App" doesn't offer any purchasing options, doesn't have a link to the web store, and so on, then "The App" wouldn't be offering anything other than access to existing data. I'm not saying that will be the final verdict, but I read the spokeswoman's response (dated almost two weeks ago, mind you -- before the actual terms of service were posted) as clarifying what apps themselves could explicitly link to.

Which is where the whole issue got muddled in the first place.

We really are going to have to get clarification from Apple; the currently available information allows for both readings without any contortions.
posted by verb at 7:02 PM on February 15, 2011

And, on top of that, those same in-app purchases would likely be unavailable on your other Kindle devices/apps as they would be bound to your Apple account (I think largely invisibly to Amazon) not your amazon account. Same for other schemes, such as Audible.

I don't believe that's what would happen. My reading is that Apple handles the payment part of the transaction, but Amazon/Audible/Netflix/Whoever still handles the rest. Unless they're crazy, their servers maintain records of which accounts have made which purchases.
posted by dvorak_beats_qwerty at 7:05 PM on February 15, 2011

Lets say I do an in-app purchase of a Kindle book. I use my *apple* credentials. Lets even say that Apple identifies to to Amazon for the purchase. Amazon packages up the books and sends it back. Now, I fire up my Kindle and want to read that same book. How can Amazon identify me? The book is associated with my Apple account, and Amazon can't authenticate that outside the Apple device. Unless the kindle app has two tiered authentication, where I enter my amazon account but buy it off the apple account. Apple would then have to pass through the authentication info. What a mess.

verb, app purchases outside the app are, well, by definition outside the app. I think you are getting too hung up on "an app offers", where clearly an app cannot offer out of app purchases as it is out of the app, no? The link method is not "offering", I don't think.
posted by Bovine Love at 7:15 PM on February 15, 2011

Apple spokeswoman Trudy Muller confirmed that those rules apply not only to newspaper and magazine publishers, but also to content sellers like Amazon.com

That's the key bit for me - that the same rules apply to all content purchasing, which leads to the same rule for iOS Kindle as iOS Rhapsody - subscription apps don't get to have no link at all, if the content is available via other means, then apple must also be able to sell it in-app as the sole provider, and get their 30% cut; and if that's the rule for Rhapsody and newspapers, then it logically follows it's the same rule for Kindle et al - sell stuff outside the app store, off your own site? Fine. Keep the money. Sell stuff to customers using our platform, using an App on our device? Then you must sell the same content at the same or lower price via us. Whether it's an ebook, a music track, or a content subscription.

And, on top of that, those same in-app purchases would likely be unavailable on your other Kindle devices/apps as they would be bound to your Apple account (I think largely invisibly to Amazon) not your amazon account. Same for other schemes, such as Audible.

That's a nasty twist I hadn't even considered. But would follow - after all, in-app content purchased via apple already is not transferable to non-apple devices that run the same app - so the same could apply to books. In effect, the kindle app just becomes a front-end to iBooks, but with the capability to still read books bought elsewhere. But not vice versa.

Hopefully, that's something they won't be doing!
posted by ArkhanJG at 7:17 PM on February 15, 2011

Bovine, the iPhone or iPad app already stores your Apple ID (and password, if you let it). Similarly, if I uninstall and re-install the Netflix app, I have to re-enter my Netflix account info the first time I run it, but from then on, I'm good. It stores that info for me in the app; presumably Amazon can do the same thing in theirs.

Given those pieces of info, here's one arrangement that could work:
I tap something in the Kindle app that says "I wanna buy this." My device sends a message to Apple with iTunes account info *and* the info for whatever account info Amazon needs. Apple sends a message to Amazon saying "hey, my_account_X bought new_thing_Y and the transaction went through. Their money's good."

At this point, Amazon makes a note of this in their database entry for my account in their giant server farm, unlocking the content and starting the process of sending it to my device. (And ensuring it's available to any other devices that access my account in the future.)

Another arrangement would be where, in step my device sends messages to both Apple and Amazon at the start, and then they cross-check with each other to see if the payment went through before sending me the stuff.
posted by dvorak_beats_qwerty at 7:34 PM on February 15, 2011

Yes, that would appear to work, and is the obvious solution. But double authentication, to the seller and the supplier? Pretty ugly, particularly if you don't already have an account with the service; you'll still have all the auth steps you have now, and then Apple stuff layered on top of that. Its particularly ugly, let alone the other issues.

In any case, it is moot, the vast majority of suppliers who normally direct sale and never do resale will not start letting apple do it for a 30% cut; I'd bet my salary on it. Their margins are too thin and it just isn't tenable. Either apple will have to cut a deal with the big guys or make a new deal in general for those who wish to handle their own fulfillment, or forgo many of the apps. I forsee the latter being possibly more serious then they think, though I'll admit I have no data to back up that assertion (the more serious part or the they think part).

I should start a betting pool on how long it takes apple to change the policy. It took them a while for the third party toolkits one (compiled flash apps)
posted by Bovine Love at 7:42 PM on February 15, 2011

verb, app purchases outside the app are, well, by definition outside the app. I think you are getting too hung up on "an app offers", where clearly an app cannot offer out of app purchases as it is out of the app, no? The link method is not "offering", I don't think.

I don't think I'm getting particularly hung up on that detail; we're all sitting around speculating on the subtle nuances of ambiguously phrased press releases. The link method seems like a pretty clear example of an app "offering" something -- inside the app, a service is offered, and clicking on it takes one to a web site that uses a non-Apple payment gateway.

Providing no link for purchasing -- essentially, making the app a commerce-free viewer for content purchased elsewhere -- would constitute an app not "offering" purchases. The issue here is whether the app itself offers purchasing of content, or whether a company offers purchasing of content that is coincidentally available via an app at a later time.

It is possible that Apple could use the most restrictive possible interpretation of that clause -- the one you seem to believe is most likely -- but it would essentially shut down a large number of apps for popular web services, apps that Apple itself trumpets as great examples of things you can do with the iPad and iPhone.

While it's possible that they're going to do that, it's far more likely that they're just trying to shut down the practice of apps with 'Upgrade now!' and 'Buy game credits!' buttons that link to external web sites in order to avoid the 30% cut.

In any case, we'll see how things go.
posted by verb at 7:42 PM on February 15, 2011

Thanks for enjoying this free content from Rentpayers Magzazine!
To subscribe to our magazine and get the full content for every issue, you can go to our website at double-u double-u double-u dot rentpaymag dot com*

You can also subscribe directly using this button · but please please don't because it costs us all of our profits and will drive us out of business if you do, and then no one will be able to enjoy this awesome magazine.

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posted by chortly at 7:52 PM on February 15, 2011

Pride and a haughty spirit...not good things if you're biblically inclned.
Hard to imagine that Android apps would follow this model.
posted by nj_subgenius at 8:22 PM on February 15, 2011

"They have taken their eye off the ball; people should user your service because it offers value, not because they have to."

This. At some point there's a calculus where people and companies say no to Apple because there are alternative eco-systems available that offer more value; they DON'T exist yet.

Then the trick is getting the average consumer to learn and be aware of them (but iTunes is easy!), and to build services just as easy or easier than Apple's. (Why don't I have wireless music syncing, damnit!).

The fact is that Apple has built up to the iphone experience by training consumers, over the past 8? 11? years since the first generation ipod. Good luck recreating that, Motorola. Most companies don't have the patience, or vision to do that.

"“We don’t intend to make any money off the App Store,” Jobs said. “We’re basically giving all the money to the developers and the 30 percent that pays for running the store, that’ll be great.”"

Remember, that originally they weren't planning on allowing native apps, webapps were supposed to be sufficient... A billion app downloads later, you're sure as rain that they'll take their cut, and make their profits.
posted by stratastar at 10:38 PM on February 15, 2011 [1 favorite]

Just for reference, a quote from the actual Apple press release:

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. Publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

That seems pretty clear. Publishers and other app providers are allowed to do whatever they'd like to do, but they may not provide or link to non-Apple purchasing mechanisms from within the app itself.

The only point of ambiguity is whether the rules cover apps that provide no purchasing mechanism at all inside the app. As that would cover a ridiculously broad range of web services, and Apple's language appears to be specifically addressing users of its purchasing API, it takes some deliberately pessimistic reading of the announcement to extend the requirements to Netflix and so on.

There are problems with the policy as I see it, but there are problems with the deliberately obtuse readings of it by reporters who want to cover a Doomsday Story rather than a licensing update.
posted by verb at 10:38 PM on February 15, 2011

Remember, that originally they weren't planning on allowing native apps, webapps were supposed to be sufficient... A billion app downloads later, you're sure as rain that they'll take their cut, and make their profits.

Heh. Yeah, and everyone complained then that Apple only supported HTML5 web apps.

Meanwhile, Android phones are being targeted by trojans that piggyback on legitimate apps being sold through non-Google App Stores. To some extent it's the price of open-ness: there are more opportunities for people to do dumb or irresponsible things without realizing it. It's hardly justification, but the timing will make it much easier for Steve to make his case. There's a case to be made for diversity in an ecosystem, but Steve's pitch for The Walled Garden sounds pretty compelling when you're explaining to your mom that she needs to run a virus checker on her cell phone.
posted by verb at 10:50 PM on February 15, 2011 [1 favorite]

Verb, I read the second-to-last sentence as the one that extends the policy to cover Netflix and similar services. If you sell a subscription outside the app, you must also offer it within the app at the same price and let Apple handle the transaction.
posted by dvorak_beats_qwerty at 10:56 PM on February 15, 2011 [3 favorites]

I see your point -- if that is considered independent of the rest of the paragraph, it could be construed as a requirement that any business whatsoever between a company and its customers also be available via Apple's purchasing API.

If that is indeed what Apple means, they deserve all of the over-the-top backlash they get. Since it's only mentioned in the context of the new subscription purchasing API, it seems like a fairly simple case of "you can't just charge people 30% more for the in-app subscription."
posted by verb at 11:05 PM on February 15, 2011 [1 favorite]

I think part of the issue is that Apple's trying to give themselves leeway to enforce these types of restrictions on companies that they want to, and can afford it (Sony, Amazon), without causing other other developers to flip-out.

It's a tightrope act.
posted by stratastar at 11:18 PM on February 15, 2011

it could be construed as a requirement that any business whatsoever between a company and its customers also be available via Apple's purchasing API.

It's rumored that Apple is actually preparing to move bigtime into digital payments, essentially leveraging the economic momentum on their platform, their iTunes/App payment backend, and the hardware they sell into their own new currency.

I think they could pull it off, too.
posted by weston at 11:24 PM on February 15, 2011

verb: The only point of ambiguity is whether the rules cover apps that provide no purchasing mechanism at all inside the app.

What part of

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

is unclear? It is 100% crystal clear, no if ands or buts. You sell digital subscriptions outside, you must sell them inside. Period. No, if you provide a link, etc. etc. Seriously, I do not see, at all how you can claim this is ambiguous.
posted by Bovine Love at 4:45 AM on February 16, 2011 [2 favorites]

The part that's currently unclear is whether "digital subscription" in that sentence means:
1) All content including one-time purchases such as ebooks.
2) All recurring purchases.
3) Recurring purchases where full content is pushed to the device (eg newspaper, magazines) but not individual transactions with a website that happens to require a subscription for membership (Audible, Netflix, Dropbox, Metafilter).
4) something else.

To me, case (3) looks like the most reasonable but the language seems to indicate (1) or (2). Apple's going to have to come up with a more explicit statement at some point. I have a suspicion they may be crowd-sourcing this: they might be waiting to see what the community thinks a reasonable interpretation might be, and how much of a grab would be too much, then "clarify" their policy in accordance.
It might just be good PR: allow everyone to fear the worst, then they'll welcome something that's only quite bad when it comes along.
posted by nowonmai at 5:03 AM on February 16, 2011

- That isn't the part that verb is claiming is unclear
- It isn't really all that unclear. Subscriptions is a reasonably obvious term; you would really really hard pressed to say that di.fm, netflix aren't subscriptions. It would require redefining the term. I'll agree that their press release does not cover (1). (2) Is probably not covered, since they fairly explicitly say "publisher", so non-publisher subscriptions (1password, dropbox, etc) are likely not covered.

New Oxford Dictionary: the action of making or agreeing to make an advance payment in order to receive or participate in something. They specifically use "an arrangement by which access is granted to an online service." as a usage.

Sure, Apples very carefully worded and legally reviewed policy could mean something completely different then what subscription actually means, but that would seem a stretch, no?
posted by Bovine Love at 5:21 AM on February 16, 2011

Just checking back in here, and all I have to say is Bovine Love has it. For example, the Kindle app is clearly affected - even if they remove a link to the Amazon store and therefore there's nothing in the app that allows the user to buy more content, in order to be in line with Apple's guidelines Amazon must add an in-app purchase option through Apple because the user can visit the Amazon website and purchase more content. The way I read it, the presence or absence of a link within the app has no bearing - if there is any way for the user to purchase content that goes to the app, then the app must enable in-app purchases.

Of course, we'll see whether Apple starts making deals with the large content providers like Amazon and Netflix. And this 30% cut is an opportunity for other platforms (not just Android, but also WeOS and e-readers) to gain market share by becoming the platform of choice for content providers. If iOS is consistently the last platform to get new content, consumers will notice.
posted by Tehhund at 5:44 AM on February 16, 2011

I love it that this is happening so soon after Rupert Murdoch launched his brand-new The Daily "iPad-only news app" electronic Apple newsletter. I hope it was a pleasant surprise for News Ltd.
posted by A Thousand Baited Hooks at 5:47 AM on February 16, 2011

I can see a practical difference between two types of "subscription". To me, it makes sense to distinguish between:
1) A subscription in the sense of newspapers, or magazines, like The Daily, where you pay for the content to be delivered to your Apple device on a regular basis.
2) A subscription in the sense of Netflix or Dropbox or WOW armory or a paid-for email account, where you pay for access to a service, and an iOS app is just one of the ways you can access it.

I may not be doing a good job of explaining this, but I see a real difference between these two things that can both be described as subscriptions. In the first case, you could describe it as the iOS device holding the subscription. The newspaper is delivered to a particular device on a regular basis. The second case is more sensibly described a personal subscription to a service that may or may not be accessed from an iOS App. Retreating to the dictionary doesn't make this real distinction go away.

The question remains of what, exactly, is covered by Apple's usage of the word "digital subscription", and we all know that Apple is quite happy to redefine the English language to suit themselves.
posted by nowonmai at 5:51 AM on February 16, 2011

I might see your distinction for Dropbox or an email account; these are purely service oriented and deliver no content on their own (they are communication mechanisms), but Netflix? Seriously, how can that not be considered delivering content to your Apple device? Are you suggesting it is only for content that is exclusively delivered to your Apple device? That would be some serious reading between the lines. I sense a reluctance to be believe that Apple could be so stupid, but they really wrote it fairly clearly, and follow up clarifications have only re-enforced the broader interpretation.

I "retreated" to the dictionary because there seemed to be some dispute to the meaning of the term 'subscription'. Now we try to add a bunch of nuance to the term, but on what basis? Where is the evidence that Apple meant it as nuanced, outside of they wouldn't be that dumb?
posted by Bovine Love at 6:00 AM on February 16, 2011

Tehhund: The way I read it, the presence or absence of a link within the app has no bearing - if there is any way for the user to purchase content that goes to the app, then the app must enable in-app purchases.
This is where the confusion is:

"publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."

Yes, links to external purchase methods must go, but:

"if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available … from within the app."

Note that the first clause refers to "content or subscriptions", but this second clause only refers to "digital subscriptions". Does this mean that non-subscription content such as ebooks is not covered by this second requirement?

What does Apple mean by "digital subscriptions" in this case?
posted by nowonmai at 6:02 AM on February 16, 2011

The question remains of what, exactly, is covered by Apple's usage of the word "digital subscription"

Apple is going to define this expression to mean whatever will prevent app publishers from giving their apps away then requiring customers to enter into non-Apple-remunerating side deals with the publisher in order for the apps to be useful, thus cutting Apple out of the revenue stream.

I'm far from a fan of Apple but I can see why they're doing this. How the new policy will fare under the world's many and varied schemes of competition regulation is an interesting question, though.
posted by A Thousand Baited Hooks at 6:08 AM on February 16, 2011

If Apple roll up and demand 30%, Amazon are either going to up their prices ... or, more likely, they're going to play hardball with the publishers and authors again.

Heads one of Apple or Amazon win; tails I lose.

When I buy Laundry 4 for Kindle I promise you that I will either a) buy a dead tree edition or b) send you a nice crisp fiver*. You can choose, too.

*crispness of £5 may not meet expectations due to generally shabby state of £5 notes in circulation.
posted by longbaugh at 6:10 AM on February 16, 2011

What part of

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

is unclear? It is 100% crystal clear, no if ands or buts.

You say that it is "crystal clear," but saying doesn't make it so. The fact that the word "Subscriptions" was used does not magically divorce the sentence from its context. It appears in a paragraph about in-app sales, directly follows a paragraph describing the new capabilities available to apps that use in-app sales, notes that apps with in-app sales must not price products higher in-app than out-of-app, and is followed by a sentence clarifying what mechanisms are no longer allowed for implementing in-app sales.

The obvious theme, there, is in-app sales: Apple doesn't want people jumping through hoops to bypass the in-app sales API, ostensibly because a single unified payment mechanism is better UX (true), but also because they get a cut of anything sold using the official sales API (also true and wearing a dollar-sign covered suit).

It's a press release, not the final App Store Developer Requirements doc that contains the final legal verbiage. The worst-case scenario interpretation you and others are arguing for would extend far beyond the NetFlix/Kindle examples. Read the document again -- based on your reading of it, there is not even a requirement that the app currently offer access to the subscription content. Divorced from the context of in-app sales, it literally requires that any company that has an iOS app and offers a subscription to anything, even something unrelated to their iOS app, must add option to purchase that subscription in their app. Does the Weather Channel have a monthly magazine? The Weather Channel app has to offer an in-app subscription button using the Apple payment APIs.

I'm not shilling for Apple, just noting that this would be a rather dramatic overreach, even for their historically tight app store requirements. If you are correct, I'll happily agree with you that it's terrible. But in arguing that your interpretation of the press release is obvious and unambiguous, I think you'r getting swept up in the hate-on.
posted by verb at 6:21 AM on February 16, 2011

Bovine Love: That would be some serious reading between the lines.
Indeed it would. I'm not saying that it's what Apple means, I'm saying that if I was inventing the policy it's the distinction that I would draw. I'm not speaking for Apple, I'm just trying to imagine a sane version of the policy as published. It's quite possible that Apple really is trying to grab 30% of Netflix's revenue.
I'm imagining a situation where customers pay a monthly subscription to Netflix, which entitles them to DVDs in the mail and a certain number of online movies per month (that's still how it works, right? If not, run with my version for now). Most streaming is watched on Xboxes or computers or fancy new TVs with Netflix built in. The iOS app is not going to be the major delivery route for most customers. How can Apple think they're entitled to 30% of that whole subscription to allow a Netflix app in the store? It would be mind-bogglingly arrogant even by Apple's standards. This is what I find it hard to believe could be true; if it is, it might be a platform-killing mistake on Apple's part as I can't imagine any content provider wanting anything to do with it.
Compare that with a Netflix-type app with a subscription plan that streamed only to iOS devices. It would be greedy, but not absurd for Apple to want a cut of that.
There's a line to be drawn between reasonable and absurd demands; in the absence of Apple adequately explaining where they draw it, I'm just saying what I think they should do.
posted by nowonmai at 6:29 AM on February 16, 2011

nowaonmai: I think we have to be careful. Apple doesn't want 30% of netflix revenues, what they are demanding is the opportunity to gain 30% of revenues by having a customer sign up via iOS. Their philosophy appears to be that they found the customer, they want their cut. Currently, they do not have the opportunity, in spite of finding the customer. My view is backed up by Mr. Jobs own statement:

Our philosophy is simple: when Apple brings a new subscriber to the app, Apple earns a 30 per cent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 per cent and Apple earns nothing

The thing is, from a business perspective, it is kind of silly. Netflix, amazon, et al doesn't want Apple to broker their deal. I'm pretty sure they would pay a referral fee or affiliate fee kind of deal of a percent or two, or a fixed amount per subscriber; that is pretty normal. But 30% in perpetuity for a single customer is just plain dumb for a company that is already fully equipped to do their own fulfillment, and their pricing structure almost certainly won't be able to stand it.

verb: I've got no hate on, I am an avid user. I'm just reading it as it is.

I agree with you on the context, but the highlighted statement starts with "However" for a reason. I don't think you are shilling, but I think your reading of the release is very very generous. In the context of Mr. Jobs statement, I don't think that generous reading is warranted. They feel they are "owed", and maybe they are (mind you, I paid them handsomely) ; but that won't change the finances of the content provider.
posted by Bovine Love at 6:38 AM on February 16, 2011

It appears some of you are completely missing this. If the app provides a subscription but does not handle in-app sales, that app's subscriptions are NOT affected. That would mean Netflix never enters the fucking conversation, as there are NO in-app Netflix purchases.

So, please, people. Pay attention.
posted by grubi at 6:39 AM on February 16, 2011

A Thousand Baited Hooks: Apple is going to define this expression to mean whatever will prevent app publishers from giving their apps away then requiring customers to enter into non-Apple-remunerating side deals with the publisher in order for the apps to be useful, thus cutting Apple out of the revenue stream.
Insightful. I think this is partly the case, except presumably Apple will be interested in enforcing this against apps that compete with Apple's existing business (newspaper and video subscriptions, music and video downloads, and now ebooks) but not care so much about other apps. There is a real risk of collateral damage - the current language would appear to ban a Metafilter app, or the World of Warcraft app, that provide access to subscribed-for content that is not in competition with Apple. Do they really want to go there? Conversely, what about a newspaper offering subscribers a feed that can be read by a third-party reader? That's not addressed by Apple, but would skip around the whole issue quite neatly.
I think Apple will probably leave the rules vague and continue to rely on their previous policy of seemingly arbitrary and capricious rejections of apps from the store to protect their business from competition.
posted by nowonmai at 6:50 AM on February 16, 2011 [1 favorite]

Summer -- It's a complete pain in the arse, but getting non-iTunes music onto an iPod is even more of a pain in the arse and doesn't always work so I give in.

I got sick of iTunes Store when they were all DRM, and have used Amazon's MP3 store for many years. It's easy to use over the web, their app automatically adds new music to iTunes. Works wonderfully.

the cydonian: how would people here react if Microsoft started suddenly demanding a 30% cut on any game you purchase on Steam?

Perhaps a more apt comparison would be to XBLA or Windows Phone? The terms and assumptions of downloading and installing apps on Windows or the Mac are different from the terms where there is more curation going on. I believe Microsoft charges a cut of sales to get into XBox Live Arcade. Windows Phone is so new, I've no idea what kind of incentives they're giving developers at this point in terms of discounting the percentage they take of sales.

kafziel: iTunes is a subscription music service.

iTunes offers mechanisms to subscribe to tv shows, but I don't know of a similar mechanism for music. You can subscribe to podcasts, but they can't be charged for. In fact, podcasters who want to get paid for subscriptions have not so far had success (see: Kevin Pollak's Chat Show).

verb: I'm not saying that my reading of the press release is authoritative, but most of the statements being made about it seem to be worst-case scenario theories. If they're true, Apple will suffer and iOS users will be inconvenienced. If they're not, we'll have the status quo.

Exactly.

nowonmai: What about RSS readers that can read feeds from sites that have subscriptions, such as Metafilter, or that provide subscriber-only feeds?

30% of zero is zero?

stratastar: Remember, that originally they weren't planning on allowing native apps, webapps were supposed to be sufficient... A billion app downloads later, you're sure as rain that they'll take their cut, and make their profits.

As of 2009, looks like the App Store contributes about 2% of Apple revenues. That does not seem like a cash cow to me. The App Store was a fluke, for sure. They thought html+js+css would do the job, but things turned out differently. And they will continue to change dramatically with time because the competitive landscape seems to change every 3 months. Fact is, Apple changes and improves regularly. Android is doing the same thing, and the existence of equivalent App Store there is a good sign. And isn't Amazon planning on an Android App Store too? And aren't there rumors of even more? Those of claiming monopolies and taxation and gouging are ignoring the fact that no monopoly exists. If Apple is being abusive of monopoly power, they will be marginalized by the marketplace.
posted by artlung at 6:58 AM on February 16, 2011

Bovine Love: I agree; Apple sees this as a kind of finder's fee, but for 30% over the lifetime of the account, I don't think most companies will want those subscribers. It looks like Netflix's margins are around 13%. What happens if they get 20 million new subscribers from Apple? They lose money on each one but make it up in volume? That might work for their business, I don't know. It might be that companies like this have to pull out from the platform because they can't afford the new subscribers Apple is sending them.
posted by nowonmai at 7:03 AM on February 16, 2011

nowonmai, I'm going to repost what I just posted:

If the app provides a subscription but does not handle in-app sales, that app's subscriptions are NOT affected. That would mean Netflix never enters the fucking conversation, as there are NO in-app Netflix purchases.
posted by grubi at 7:08 AM on February 16, 2011

Yes, grubi, but you have not backed up your assertion. OTOH, yet again, in Apples own words:

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app.

Who is not paying attention?
posted by Bovine Love at 7:12 AM on February 16, 2011

grubi: how do you reconcile that with the language from Apple's press release?
However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

If you sell a digital subscription separately outside an app, that subscription must also be made available for in-app purchase.

TL;DR:
If the app provides a subscription but does not handle in-app sales, that app is getting kicked out of the store.
posted by nowonmai at 7:16 AM on February 16, 2011

Apple's own words:
However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. (Emphasis mine)

Sounds like a very particular set of circumstances. What if no-one expresses a wish to subscribe from within the app? Mostly because they already have to have a subscription outside it in order to access the thing?

You both post the same passage, and failed to read the whole sentence.

If the app provides a subscription but does not handle in-app sales, that app is getting kicked out of the store.

We'll see.

I know this: every time one of the APPLE IS A BALL OF DOUCHE posts comes along, it turns out people got the details wrong and the outcome isn't what they say it is.

Oh, but, no, I realize one of these days you Chickens Little just might be right about the sky falling. Yeah, huh.
posted by grubi at 7:36 AM on February 16, 2011

Look, if we're pulling individual sentences out, context free, try this one:

"Publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple."

I'm arguing that there is sufficient ambiguity for Apple to take a stupidly, self-destructively restrictive position or for it to take a more reasonable position, without changing the wording in the press release that was sent out. Because of that, what we are most likely to see in the coming days and weeks is fuzzy, ad-hoc enforcement and a halfhearted rollback to a policy that most iOS customers find acceptable.

My argument is not that the press release cannot be interpreted in the worst-case fashion. My argument is that it is sufficiently ambiguous in its meaning that it may be interpreted either way. Historically, that's how Apple has rolled with App Store requirements. That's also a complaint that many developers have leveled against them. The real problem is not the existence of a hypothetical (and relatively unlikely) worst case scenario. The real problem is that Apple repeatedly causes arguments like this by trying to give itself wiggle room.
posted by verb at 7:40 AM on February 16, 2011

Strawman. No one (well, in the lower part of this thread) has claimed that that Apple was banning, or demanding a portion of the revenue, external sales. That statement works perfectly fine on its own.
posted by Bovine Love at 7:45 AM on February 16, 2011

The real problem is that Apple repeatedly causes arguments like this by trying to give itself wiggle room.

So people are really arguing over semantics? Or is it that there's a nice, tidy contingent that isn't happy with Apple who will deliberately interpret all ambiguity as the worst-case scenario?
posted by grubi at 7:50 AM on February 16, 2011

I seriously object to the characterization of me as an Apple hater. It is a straight-forward ad-hominem (i.e. personal) attack, and I have done absolutely nothing to indicate that I hate Apple, have it in for them or am unhappy with them. It is an analysis of their apparent new position and is base on their own statements, not blind assertions.

Try participating in the discussion instead of attacking the participants.
posted by Bovine Love at 7:54 AM on February 16, 2011 [2 favorites]

Ah, Apple threads.
posted by dirigibleman at 8:08 AM on February 16, 2011

I seriously object to the characterization of me as an Apple hater. It is a straight-forward ad-hominem (i.e. personal) attack, and I have done absolutely nothing to indicate that I hate Apple, have it in for them or am unhappy with them. It is an analysis of their apparent new position and is base on their own statements, not blind assertions.

My apologies, Bovine - I wasn't intending to characterize you as "A Hater," and I can see how my comment came across that way. I Just think there's a collective hate-on for the App Store Guidelines, even among those who develop for, and use, iOS extensively. That was the hate-on I was referring to, not some sort of general Apple antagonism. It wasn't a reasoned criticism of your statements, just an off-the-cuff way of saying, "I think people are getting het up about something ambiguous, and Apple will simply say 'Oh, no! That's not what we meant!' even if they wished they could collect 30% on every transaction on the planet.

You and others have been quite reasonable in how you've argued your point and I don't think there's anything particularly axe-grindey about the case you're making, I'm just not convinced by the claims of slam-dunk clarity around the meaning of Apple's press release.
posted by verb at 8:09 AM on February 16, 2011

Actually, I kind of agree with you; I suspect that Apple has put this out there as a trial balloon to see how it goes; not so much with the public as with the publishers. So far only one (besides Sony, but that case remains a little unclear), Rhapsody, has publicly said they'll revolt. I'm sure the others will be doing some communicating and formulating a response. By putting it out as a press release that does have a little (but I don't agree with you that there is much) wiggle room, they provide the opportunity for clarifications, though at this point I think it would have to be pretty much a contradiction. I'd give it a week or three to see how it plays out with the publishers.
posted by Bovine Love at 8:16 AM on February 16, 2011

Guys, cut it the fuck out.
posted by cortex at 8:17 AM on February 16, 2011 [4 favorites]

Google launches One Pass

Google has launched its online charging service for newspapers and magazines, just a day after Apple unveiled a rival internet payment offering for publishers.

Google One Pass opens the door for publishers to charge for content on websites, as well as on smartphones and tablet computers. Publishers will keep 90% of revenue from One Pass sales – compared to the 70% share offered by Apple's subscription service.

Following months of speculation, the Google online payments service will attempt to woo publishers who are keen to establish new digital charging strategies as print revenues decline.

Although Google's payments system has been in the pipeline for months, its launch is understood to have been brought forward on the back of Apple's rival announcement on Tuesday.

posted by dng at 9:07 AM on February 16, 2011 [2 favorites]

According to this CNET article, another differentiator of Google's service is that they'll automatically share customer data with the publishers.

According to the article Joe Beese linked to yesterday, Apple's program requires click-through authorization from the consumer and only shares a limited amount of info. (Name, email address, zip code.)
posted by dvorak_beats_qwerty at 9:17 AM on February 16, 2011

Cool link on the Google competition on taking less of a cut. This undercuts claims about Apple being a monopoly in this space. (tax, gouge, etc). If the Apple platform sucks, leave it.

It is *always* going to be the case that if you join a platform controlled by one company you will be to some extent at their mercy. But as with labor unions or whatever, you can push back, and if it sucks enough, you can just quit.
posted by artlung at 9:23 AM on February 16, 2011

Apple : Digital Sales :: Walmart : Pickle Sales.

Discuss.
posted by verb at 9:23 AM on February 16, 2011

A "source" has it that Netflix will be exempt. Of course, Netflix and Apple are partners to some extent (see AppleTV). Interesting.
posted by Bovine Love at 10:13 AM on February 16, 2011

Note that the wording of that article doesn't say that Netflix will be an exception to the rule, just that it "will not be affected by Apple's new subscription billing plan."

That's compatible with my reading of the announcement, in which Netflix's app doesn't offer any in-app sales or subscription options.

I think we need to start placing bets. Officially. ;-)
posted by verb at 10:17 AM on February 16, 2011

I did notice that. The source if probably official and seeing how it goes.
posted by Bovine Love at 10:21 AM on February 16, 2011

Apple needs the team of people who create their mostly great user interfaces to work on helping the team that sets business policies express said policies without confusion. It looks like they're working with the iTunes division instead and hence, fucking awful.
posted by juiceCake at 11:24 AM on February 16, 2011

Some good thorough discussion of publisher's choices: Store Wars: Opt out, opt in, sell out, capitulate? -- fodder for a grid we can lay the bets on.

It's unclear to me why there was so much grar about this, but I'm glad it appears to be over. This mobile business strategy / app store / competing interests / coopetition stuff is fascinating.
posted by artlung at 11:25 AM on February 16, 2011 [1 favorite]

As of 2009, looks like the App Store contributes about 2% of Apple revenues.

And 2% (440 million dollars!) is laughable? Considering that iOS devices contribute to 70% of Apple's margins of which they banked 20 billion dollars last year, and it didn't exist before, I'm gonna say that it's a disruptive growth industry.
posted by stratastar at 11:52 AM on February 16, 2011 [1 favorite]

I think it's fair to say that at this point what exactly Apple will require of publishers and content sellers is confused and unclear. The confusion evident in this thread is probably happening in every marketing department of every startup right now. Many appear to be sitting on the fence or evaluating their options.

Google's plan may be the other shoe dropping. Many newspaper publishers (link stolen from dng above) seem to see Google's announcement as a step forward.

Meanwhile, the Kindle option turns out to be surprisingly (to me) uneconomic for magazines. Maybe bundling the cost of data service into the hardware wasn't such a great idea after all.

The market for subscription services is different from what both Amazon and Apple are used to, and much more in Google's sphere, which is why I think we've seen the reactions by the publishers so far. Apple and, to a lesser degree, Amazon are both customer focused, used to selling stuff/widgets/books to individual customers/consumers. Both are very good at it. Their marketing stories are: "we're the best widget maker/bookseller".

Google, on the other hand, sells services to businesses. Their marketing pitch is: "we help you make more money with your customers". I think, based on the news articles above, that Google has a better handle on what their customers want, the publishers, than either Apple or Amazon do. For the moment, they may have got the formula more right than their competitors.

What happens in the next 5 months, before Apple's June 30 deadline will be interesting. Is Apple going to "clarify" it's positioning? Are they going to do strategic deals, as they have iwth Netflix? No one has leaked the actual license text yet, right? They still have wiggle room, I think. Amazon too, is late to the party, and in an intersting position to be both customer and possible competitor to both Google and Apple.
posted by bonehead at 11:56 AM on February 16, 2011 [1 favorite]

Google launches One Pass

Wow, that was much faster than I expected, but this is exactly why I'm interested in this announcement despite not owning any Apple products: this will bring other players into the game and speed the up the creation of centralized systems to handle subscriptions. And this shows why Apple is going to have a tough time dictating their 30% cut - now content providers will flock to Google's ecosystem, and Apple will have to decide if taking a smaller cut is worth bringing those content providers back.
posted by Tehhund at 1:29 PM on February 16, 2011

MacWorld: How Apple's new subscriptions stack up to the competition.

Apple’s newly announced subscriptions policy for App Store offerings has triggered a round of griping from companies that sell content or subscriptions from their mobile apps. But a closer look at Apple’s new rates and terms suggest that the company’s policy isn’t that different from what rival services offer—and in some cases, Apple’s terms are more favorable.

posted by chunking express at 2:17 PM on February 16, 2011

Wow, Macworld comes out in defense of Apple? I'm shocked, sir.

Of course, they're also grossly misrepresenting the facts of the issue, comparing Apple's demand of 30 points off the back end for the privilege of reading books on their OS to the cut Amazon takes for publishing and maintaining the entire marketplace infrastructure. Not an apt analogy, at all.
posted by kafziel at 6:03 PM on February 16, 2011

kafziel, actually the comparison seems rather apt to me. And the notion that initially Kindle books had a split that was 30/70 where the 30 went to the creator is telling. There's definite overhead in these marketplace. I don't have a notion about what particular split is *fairest* but it seems to me claims that there's no comparison, well, it seems natural to me, but perhaps I'm missing something basic.

I'd be interested to hear of the splits for Steam, Mac App Store, lulu, Blackberry, XBox Live Arcade, Android, and the like. This seems like a natural Wikipedia page in fact - distribution channel/creator split for revenue sharing in electronic goods - music / applications / books / video. Anyone know of such a beast?
posted by artlung at 6:32 PM on February 16, 2011

Thing is, Apple isn't the distributor here. With the example of the Kindle app, Amazon is still the distributor. Apple is only providing the OS.

A closer comparison might be Microsoft demanding a cut of all Steam sales made on the Windows version of Steam.
posted by kafziel at 6:38 PM on February 16, 2011 [1 favorite]

The 30% cut obtains only occurs if the transaction occurs using Apple's payment APIs, Apple *is* a middleman here, no?

There's no just providing the OS platform to the world and forget it, the nature of the platform is that ad-hoc installs are not possible--iOS prevents it. More like XBox than Windows or Android.

I see the claim you're making about how it would be like Microsoft taking a cut of Steam sales, but I rather think it's more like Microsoft taking a cut of downloadable content for an XBLA title.
posted by artlung at 7:01 PM on February 16, 2011

artlung, that is the case, but they have decided to require that people who write apps that access (certain types of) content/subscriptions purchased elsewhere to include an in-app purchase mechanism or GTFO.

Amazon, for example, can't make it easy for you to buy a book from their iOS Kindle app without using Apple as a middleman. That's what's so heinous.

FWIW, Nokia keeps 30% of the net on stuff sold in their store. They don't require that applications running on their platforms use Ovi, though. Not for distribution of the application, nor for purchase of content from within said application. It is an option, though. (and has carrier billing arrangements, making it somewhat more interesting, IMO)
posted by wierdo at 7:25 PM on February 16, 2011

Or it was more interesting before Nokia decided to abandon everyone and go WM7, but that's for another thread. ;)
posted by wierdo at 7:25 PM on February 16, 2011

A closer comparison might be Microsoft demanding a cut of all Steam sales made on the Windows version of Steam.

No, not really. Microsoft doesn't handle distribution, doesn't handle merchant services, doesn't maintain Steam's storefront. This comparison makes little sense.
posted by Blazecock Pileon at 9:39 PM on February 16, 2011

Microsoft doesn't handle distribution, doesn't handle merchant services, doesn't maintain Steam's storefront.

I agree, the comparison is a little simplistic. Of course, when it comes to in-app sales and subscriptions, Apple only handles the merchant billing - the rest of delivery and storefront is in-app directly from the publisher's own delivery mechanism, not Apple's. They're charging 30% to act as a glorified mandatory credit card handler.

A better comparison:

Microsoft now requires that as part of the steam installation, you also set up a GamesForWindows account with a credit card. All current steam users will be required to retroactively create one. This is accomplished because the steam installer can only being made available via the GamesForWindows marketplace, which is now included both on their website, and on every windows desktop as a prominently displayed program.

All in-app steam sales must be a one-click option that buys the game through your GFW account, and microsoft takes 30% for handling the billing. Game delivery and DRM auth is still via steam's own network, as are achievements and social networking features.

Steam may still handle sales on their own website via store.steampowered.com, but they may not link to it from within the steam app at all. Also, they may not charge less on the steam website than in the steam app. Who between valve and the game publishers pays the 30% for in-app sales is up to them.

Failure to comply with the new rule within 3 months means Microsoft push out a Windows update that prevents Steam from running on Windows.

Game publishers also now have the choice of using the GamesForWindows marketplace to handle game delivery, instead of steam. It's on every desktop, and you only need to pay microsoft 30% for delivery and billing of your game, instead of steam's fees AND microsoft 30% for selling it via the steam app.

It's still not a perfect comparison admittedly; Windows has much greater desktop penetration than iOS has in the mobile space, but then it's far easier to use a browser on a desktop; and windows is far easier to get software on via an 'unapproved' source (i.e. a local installer) than iOS, so it somewhat balances out. It seems a passable analogy to what apple are doing to Amazon Kindle and Sony Reader, in comparison to iBooks.
posted by ArkhanJG at 12:15 AM on February 17, 2011 [2 favorites]

On a slightly different matter, Apple have now blocked iBooks from working on jailbroken iOS devices.

It attempts to run an unsigned piece of code; if it succeeds (because the phone is legally jailbroken) then iBooks won't run. It pops up an error that 'There is a problem with the configuration of your iPhone. Please restore with iTunes and reinstall iBooks.'
posted by ArkhanJG at 12:42 AM on February 17, 2011

No, not really. Microsoft doesn't handle distribution, doesn't handle merchant services, doesn't maintain Steam's storefront. This comparison makes little sense.

Apple don't currently do any of that for the Kindle on iOS either, but under the new rules they are trying very hard to force it on Amazon and take their 30%.
posted by markr at 3:27 AM on February 17, 2011

ArkhanJG, your theoretical is interesting, but that's not what happens with Microsoft nor is it likely to happen. The terms and conditions for developing applications for Windows are simply different from developing for iOS. I don't understand why these theoretical analogies are necessary to discuss the iOS change that was announced and has not yet been implemented.
posted by artlung at 6:17 AM on February 17, 2011

And now the tertiary ripples are spreading.

Speaking rather frankly on IRC, Last.fm's co-founder Richard Jones has condemned Apple's move to grab 30% of content-based subscription fees: "Apple just f***** over online music subs for the iPhone."

Jones' apoplectic outburst is just one of many, too. Rhapsody yesterday said it won't bow to Apple's subscription policy, and CEO of on-demand music streamer we7, speaking to paidContent, thinks that the 30% share "makes music subscriptions economically unviable."

If they're going to clarify they'd better do it post-haste.
posted by verb at 6:25 AM on February 17, 2011

Yeah, time to re-message. The 3.3.1 policy change (about using outside frameworks and non C-language runtimes) that took some time to work out too, but ended up pretty happily for developers. Now here's where they get to work this out as well.

I suppose the "dealing with angry people who love developing for your platform but think you are trying to screw you every few quarters" is one of those *good* problems to have for Apple.
posted by artlung at 6:40 AM on February 17, 2011

On the flip side, someone just noticed that Microsoft Market, Redmond's clone of the App Store, explicitly bans any software that includes GPL or LGPL code. Even drivers and linked libraries.
posted by verb at 6:58 AM on February 17, 2011

If the terms of the GPL are incompatible with the terms of the Microsoft Market, as they are with the iOS App Store, is that not the appropriate action to take? Rather than accepting the app without competent vetting and then having legal hassles, as is happening with the iOS port of VLC?

Or let's not have a lengthy derail about an entirely different topic.

ArkhanJG, your theoretical is interesting, but that's not what happens with Microsoft nor is it likely to happen. The terms and conditions for developing applications for Windows are simply different from developing for iOS. I don't understand why these theoretical analogies are necessary to discuss the iOS change that was announced and has not yet been implemented.

Because people won't, or can't, see this as what it is. People are wrongly comparing Apple's 30% demand to Amazon's cut as a publisher, or to paste-and-paper publishers, or to Microsoft taking a cut of XBLA sales. These are inapt comparisons, and speak to an ignorance - accidental or willful - of what's actually going on here. If someone genuinely doesn't understand why this is a bad thing, the scenario is being couched in more familiar terms - like the hypothetical Microsoft demanding points off the back end of all Steam sales - so that the problem can be explained by analogy.

Yes, the environment of the scenario is not 100% the same. If Microsoft did that in Windows, it would be outrageous, whereas Apple has its mouthpieces and its conditioning convincing people that when they do the same thing, it's not outrageous. That it is, in fact, even defensible somehow.
posted by kafziel at 7:26 AM on February 17, 2011

kafziel, I am getting a vague notion you're insulting my intelligence, that I've been "conditioned" by Apple to see the world a certain way, and that I'm willfully or accidentally ignorant. That doesn't make me feel like we're having a conversation of issues in good faith, it rather gives me the impression that you think I'm an ignorant, stupid idiot. But be that as it may...

Is the objection that Apple inserting themselves into these subscription transactions is wrong and outrageous? If that's the claim I think you're saying that these transactions need not affect Apple or Apple infrastructure in any way. I don't think that's a sensible claim if the payment APIs are and systems belong to Apple.

Or is the objection to the amount (30%) of the cut Apple is saying they will make? In which case, okay, what would be a more fair way to calculate the usage of these systems, something like a PayPal ~5% figure? Or some recurrent fee? What would an alternative scheme for this look like? I suppose the Google alternative is there, with its 10%, but then there's also a mechanism to do more data sharing with publishers there by default. 30% or 10% with data sharing, are these the actual options?

Or perhaps I am still missing the point.
posted by artlung at 7:59 AM on February 17, 2011 [1 favorite]

Is the objection that Apple inserting themselves into these subscription transactions is wrong and outrageous? If that's the claim I think you're saying that these transactions need not affect Apple or Apple infrastructure in any way. I don't think that's a sensible claim if the payment APIs are and systems belong to Apple.

Many, many subscription services do not use any of Apples payment API's. The general objection here is that those services will be forced to offer the user the choice of using those API's (via an in-App purchase). Personally, I don't attach moral values (i.e., 'wrong' or 'unfair'); quite frankly, business is business. But as it appears to stand right now, many of those subscription services are going to not be able to afford to offer an App on iOS. Does that matter? In the 'big' sense, maybe not, but I enjoy a good game here and there, and also enjoy armchair quarterbacking a game, so this is interesting. As a heavy user of both iOS and those subscription services, I also have a bet on the game, making it (as always) more interesting.
posted by Bovine Love at 8:22 AM on February 17, 2011 [1 favorite]

If the terms of the GPL are incompatible with the terms of the Microsoft Market, as they are with the iOS App Store, is that not the appropriate action to take? Rather than accepting the app without competent vetting and then having legal hassles, as is happening with the iOS port of VLC?

Yes, for GPL'd applications that's the case, my bigger interest is LGPL code -- the stuff used in huge numbers of open source code libraries. They're perfectly compatible with the App Store's terms of service of developer guidelines -- the LGPL was explicitly designed to allow for use inside closed-source applications like those that are released in the App Store. For some reason Microsoft is explicitly banning LGPL code in addition to GPL code, however.


Or let's not have a lengthy derail about an entirely different topic.

My apologies. I didn't mean to interrupt the firehose of uninformed speculation; it seemed relevant given that there was no new information about Apple and we've already started drifting to discussion about the Android store and Google's new payment gateway.
posted by verb at 8:24 AM on February 17, 2011

Yes, the environment of the scenario is not 100% the same. If Microsoft did that in Windows, it would be outrageous, whereas Apple has its mouthpieces and its conditioning convincing people that when they do the same thing, it's not outrageous. That it is, in fact, even defensible somehow.

Please don't assume that you know what I think and what I would think in hypothetical circumstances. I've repeatedly said that Apple's statements to date have been too be sure how they'll treat certain kinds of services, and that they need to clarify it. Perhaps you were talking about someone else in the thread, but I know what I've been saying is not equivalent to "defending" the worst case scenario.
posted by verb at 8:27 AM on February 17, 2011 [1 favorite]

s/too be sure/too vague to be sure. Doh.
posted by verb at 8:28 AM on February 17, 2011

Metafilter: the firehose of uninformed speculation
posted by artlung at 11:16 AM on February 17, 2011 [1 favorite]

Apple has its mouthpieces and its conditioning

So far, the rest of us have been using facts and logic as a foundation for our ideas and opinions, and you should understand that your emotional pleas and insults do little to nothing to negate that. Your contributions so far have not stood up well to the light of reality, and you might introspect for a moment and think about why that is, instead of insulting others.
posted by Blazecock Pileon at 11:39 AM on February 17, 2011

Heh. So maybe the June 30 deadline is probably just a deadline for when Apple gioves developers a milkshake and a basket of kittens?

If this runs true to form I fully expect June 30 to be the date that Apple partisans switch from telling us that there's room for interpretation in the guidelines to saying that of course the guidelines have been that clear and strict all along and nobody should have been suprised by it.
posted by Artw at 12:16 PM on February 17, 2011

I'm actually a little surprised that this hasn't bothered more Apple users. I would love the idea as an Apple shareholder, but as a user all this does is either increase prices to me through companies passing on the higher cost, our remove competitors from the market (which will then increase prices to me).
posted by markr at 12:31 PM on February 17, 2011

Things typically don't bother users until they go into effect. Until then they only bother us, which is to say, jerks on the interweb.
posted by artlung at 12:48 PM on February 17, 2011

If this runs true to form I fully expect June 30 to be the date that Apple partisans switch from telling us that there's room for interpretation in the guidelines to saying that of course the guidelines have been that clear and strict all along and nobody should have been suprised by it.

You know, you can just send Josh Gruber email if you'd like, instead of pretending that we're him.
posted by verb at 12:55 PM on February 17, 2011

And just to spice the thread up: The International Asian News Service reports that Jobs has just six weeks to live.
posted by verb at 1:06 PM on February 17, 2011

Simply outrageous. Will drive prices up. Thanks Apple!
posted by juiceCake at 1:47 PM on February 17, 2011

And just to spice the thread up

Stay classy, Metafilter.
posted by Blazecock Pileon at 2:46 PM on February 17, 2011

Stay classy, Metafilter.

Well, until I hear about it from more than one news source it's in the 'Wacky Rumor' category for me.
posted by verb at 3:03 PM on February 17, 2011

The magazine sets its advertising rates based on how many readers they have, and it's in the advertisers interest to only pay for potential sales candidates. If I am charged $1/10,000 readers, and my product costs more than 5,000 of those readers can afford, I basically wasted half my advertising budget. I would be better off paying $2/10,000 to a magazine that guarantees everyone who reads it at least Could buy my product.

But that's still crazy! Why not then use an outside entity to estimate what percentage of readers are in the target demographic? Or use some other means, such as reader surveys?

When you start playing around with basic economic mechanisms, such as sales, in order to make money from a higher-order mechanism, such as simplifying the demographics of one's audience in order to provide advertisers with a more accurate measurement of the nature of your readership, I begin to consider that things are perhaps a bit goofy in magazineland. Aren't these kinds of elaborate economic mechanisms more fragile, and vulnerable to breakage in times of changing market conditions?
posted by JHarris at 3:18 PM on February 17, 2011

Even if it is just a rumour verb - and I hope it is - that's still a fucking tasteless way to link it. Not cool. Not cool at all.
posted by ArkhanJG at 4:52 PM on February 17, 2011

Hypothetical for discussion:

I put together a big box of my stuff I want to sell. I walk down to my friendly local StuffStore, get the manager's attention, and tell them the following:

"Hi! I'd like to put my big box of stuff in your store. The things in the box all have price stickers on them, but I'm not actually going to sell them in your store. I'm going to stand out on the sidewalk and collect the money out there. I know you have a commission program, but I'm only storing my stuff here. Since I'm selling it somewhere else, I don't need to pay your cut."

I can't imagine that conversation going too well, but isn't that basically what's going on here? "Free" apps go up on the App Store, but money gets exchanged elsewhere? I suppose this makes me crazy-Apple-partisan-guy, but it doesn't seem outrageous for a store owner to want some form of compensation for putting my merchandise in their shop.

I used to work at a comic shop - we bought books from the distributor for half-off cover price; is selling them to customers for full price a "comic shop tax"? If not, why?

I can certainly imagine folks whose business model depends on free access to the App Store being upset about this, but if the margins are so thin that anything greater than zero nukes me, is that really a viable business model?

I can certainly entertain the argument that 30% is too much to charge, but demanding free access to a commercial space somebody else built for my own commercial purposes seems unreasonable, as well.
posted by dvorak_beats_qwerty at 3:01 AM on February 18, 2011 [1 favorite]

By that reasoning, your ISP should get a cut of every transaction you do on the web, since they built the web, or at least a corner of it.

MS should get a cut of every transaction done on the web on a windows machine; if it wasn't for them, that person wouldn't be running windows and wouldn't be able to do it. The provide almost all the worlds desktops (near enough), providing an incredible opportunity. Every web browser provider should be compensated.

Hell, when I buy Bridgestone tires to put on my Infiniti, Bridgestone should have to pay Infinit, because without them, I wouldn't be buying tires. Or is it the other way around, if Bridgestone wasn't making tires, I wouldn't have an Infiniti to buy?

Personally, I bought an iPad because the Kindle App was available on it; I wouldn't have bought it otherwise (this is true, BTW, not just an example). Amazon provided the commercial space (Kindle book sales) and Apple benefited. Amazon should be charging Apple.
posted by Bovine Love at 5:32 AM on February 18, 2011

Even if it is just a rumour verb - and I hope it is - that's still a fucking tasteless way to link it. Not cool. Not cool at all.

You're right, and I apologize.
posted by verb at 6:00 AM on February 18, 2011 [1 favorite]

I can certainly entertain the argument that 30% is too much to charge, but demanding free access to a commercial space somebody else built for my own commercial purposes seems unreasonable, as well.

How is it free? You could sell one item out of that big box at the local stuffstore, like say, a game console. The local store gets a cut. You could then sell games for that console out of your own store but then the local stuffstore says no, wait, you have to sell your games here to, or we won't carry your console at all. So the guy caves in and sells his games at the local stuffstore and raises the price of all the games to account for the additional expense of selling at the local stuffstore because they have to price matched. Or, he stops selling the console at the local stuffstore as well and says bugger you, I'm not doing business with mafia style assholes.

It's as if the local stuffstore had seen on benefit whatsoever to offering their customers the game console. It is as if that never was a factor in bringing customers in. If you shop here you can get this this and this. Only the fact that they're the local stuffstore is the reason customers come in. Well how very special they are. The companies and people who produce products that they can sell and that bring people in are not to be respected. They don't value add.
posted by juiceCake at 7:11 AM on February 18, 2011 [1 favorite]

By that reasoning, your ISP should get a cut of every transaction you do on the web, since they built the web, or at least a corner of it.

I pay my ISP an ongoing fee to access the internet. I don't see the equivalent on the iPad. My ISP is free to try and set up a double-dipping system like you suggest; I'm also free to switch to another ISP.

MS should get a cut of every transaction done on the web on a windows machine; if it wasn't for them, that person wouldn't be running windows and wouldn't be able to do it.

I think Steam is a closer analogy, and I don't think Valve lets you into their store out of the goodness of their hearts. Or even the Marketplace for WinPhone 7. Or X-Box Live. You sell a product, they get a cut. If someone submitted a "Free" game to them that did microtransactions directly, would those apps get approved for sale on any of those systems?

Hell, when I buy Bridgestone tires to put on my Infiniti, Bridgestone should have to pay Infinit, because without them, I wouldn't be buying tires. Or is it the other way around, if Bridgestone wasn't making tires, I wouldn't have an Infiniti to buy?

I'm sorry, I don't follow this. Whatever shop sells you the tires gets a portion of the transaction. Infiniti doesn't have a "Tire Store", and Bridgestone doesn't put their tires in that nonexistent store for zero dollars in the hope of charging you later to fill them with air.

I just don't see that as a useful analogy to what we're discussing - maybe I'm missing something.

Personally, I bought an iPad because the Kindle App was available on it; I wouldn't have bought it otherwise (this is true, BTW, not just an example). Amazon provided the commercial space (Kindle book sales) and Apple benefited. Amazon should be charging Apple.

Sure - the relationship is mutual. But why didn't you just buy a Kindle? Why buy the iPad instead? If Apple wanted a 5% cut, or a 1% cut, would this bother you?

In my mind, all Apple is saying is "Amazon, if you want to sell additional services on our device, we want the chance to benefit for providing you with the opportunity to do so". When Apple announced the App Store, I think the "we'll host free apps at no charge" was written with small developers in mind as the beneficiaries.

I don't think they were thinking of Amazon or Netflix, or other large commercial operations. Again, I can understand why the folks that benefit from the loophole that's being closed here are upset - their business model just changed in a way they don't like. But that happens all the time in business, and in politics, and the folks that used the loophole are always the folks that squawk the loudest.

Seriously: if Apple was asking for 1% here, would this still be as objectionable? I totally understand the argument that asking for almost a third of the transactions in question is unreasonable; I don't understand why asking for anything at all is.

They built a store. Like all shopowners pretty much everywhere, they want compensation for the products that move through that store.
posted by dvorak_beats_qwerty at 7:57 AM on February 18, 2011 [2 favorites]

How is it free? You could sell one item out of that big box at the local stuffstore, like say, a game console. The local store gets a cut.

That's not what was occurring here. Kindle app, Netflix app, Pandora app... you don't have to pay to download any of them. Free distribution for their stuff through Apple's system.
posted by dvorak_beats_qwerty at 8:00 AM on February 18, 2011 [1 favorite]

"Amazon, if you want to sell additional services on our device, we want the chance to benefit for providing you with the opportunity to do so".

Re-reading this, I can already predict that folks will attack this sentence because of my word choice. Please strike it and instead assume I wrote the following:

"Amazon, if you want to sell additional services on our App Store, we want the chance to benefit for providing you with the opportunity to do so".
posted by dvorak_beats_qwerty at 8:06 AM on February 18, 2011 [1 favorite]

Of course I could have bought a Kindle instead. Apple brought additional value to the table and were paid handsomely for it

Look, this kind of "grow up kids, this is business and this is how it happens" really ticks me off. We *are* discussing the business. Most here are not going "whaaaa, I want everything for free" or some such bull. We are discussing the business relationships and the impact. Show me the chorus that is should be absolutely free. Who is arguing that? That is purely a strawman.

And Kindle and Neflix do NOT distribute their stuff through Apple's system. Only the app goes through apples system, the content is entirely managed and delivered by Kindle, netflix, etc.

In any case, I don't understand your argument. Apple is free to say fuck you all, no more apps. Or they can say, I want all the money. Whatever. The discussion here isn't what they have the right to do, it is about the impact (and what the actual policy is)
posted by Bovine Love at 8:07 AM on February 18, 2011 [1 favorite]

That's not what was occurring here. Kindle app, Netflix app, Pandora app... you don't have to pay to download any of them. Free distribution for their stuff through Apple's system.

Sure, I was just using the analogy cited when you do have to pay to download. But even when you don't, free apps that people like that are available for the iPad gives more incentive for people to buy the iPad.

Now if they decide they don't want to offer their apps through the iPad because of this, the iPad becomes less attractive to certain users. It's astounding that this is great for Apple, you have an app for our device, we demand we get a cut of your revenue from subscriptions. In the computer world this would be like saying to application developers that if you write an application for our platform, and you make money outside of that with this application (even if the app is free), we get a cut because although our application allows your application to make money, we really don't see how it's possible your application brings any value to our operating system. No one ever bought a Mac because they could only get Scrivener on it (though finally it is now available for Windows). No one uses Windows in IT because you have more extensive administrative control than say the Mac, I guess. I'm willing to entertain the idea that people don't base part of their decisions to use an OS on the applications they can run with it but in my world and experience, this is largely the case. Imagine the damage this would do small applications on computers that have yearly subscriptions.

Of course this can't be done with operating systems on computers as it stands now.
posted by juiceCake at 8:21 AM on February 18, 2011

Looks like Rhapsody is considering suing over the news. Since Apple doesn't have its own subscription music service, I wonder if Rhapsody has a legal basis for an antitrust challenge?

It begins.

The Justice Department and the FTC are both interested in examining whether Apple is running afoul of U.S. antitrust laws by funneling media companies' customers into the payment system for its iTunes store—and taking a 30% cut, the people familiar with the situation said. The agencies both enforce federal antitrust laws and would have to decide which one of them would take the lead in the matter.
posted by zabuni at 8:34 AM on February 18, 2011 [1 favorite]

Most here are not going "whaaaa, I want everything for free" or some such bull.

That's not really the argument I was trying to make, but I can see how it would come across that way.

A lot of the posts in the thread do read to me as "WTF Apple shouldn't do this" - it wasn't clear to me whether the outrage was caused by "this" being "charge 30%" or "charge anything at all". My questions were mostly aimed at the folks in the latter camp. Maybe that camp is much smaller than I thought it was. If so, apologies for the derail.

And Kindle and Neflix do NOT distribute their stuff through Apple's system. Only the app goes through apples system, the content is entirely managed and delivered by Kindle, netflix, etc.

Sure. But that app is a loss-leader tool intended to help generate later revenue. It's not the only thing you get when you buy or subscribe to the content, but it's part of the value proposition.

So, let's change the scenario a bit. How many brick and mortar stores would let me put free cell phones in their shops? Zero dollars for consumers to take home, but I sell the service plans through my website.

I don't see that happening unless I let the shop owner have a portion of that service plan revenue, and it seems completely understandable to me why brick-and-mortar stores wouldn't allow this. But (at least partially, I think) because the store's digital in this case, folks are upset.

I'm still not completely clear on whether folks are upset because the amount being charged is too high and threatens services they value, or if they're upset because the general principle offends them, or if mapping stuff from the physical to the digital causes business practices to seem more unfamiliar.
posted by dvorak_beats_qwerty at 8:44 AM on February 18, 2011

But even when you don't, free apps that people like that are available for the iPad gives more incentive for people to buy the iPad. Now if they decide they don't want to offer their apps through the iPad because of this, the iPad becomes less attractive to certain users.

Agree - Apple's at real risk of driving off some of the apps that make their platform attractive. Personally, I'm of the opinion that Apple's right to close the loophole, but may have asked for too big a portion. I suspect there'll be some serious back-room negotiations over this between now and June.

But on the foundation level, I can't find fault with Apple's thinking that they deserve some piece of the revenue those apps generate. Maybe not 30%, but something.
posted by dvorak_beats_qwerty at 8:46 AM on February 18, 2011

I'm still not completely clear on whether folks are upset because the amount being charged is too high and threatens services they value, or if they're upset because the general principle offends them, or if mapping stuff from the physical to the digital causes business practices to seem more unfamiliar.

They're unhappy because they bought an item that promised to have x, y, and z features, and part of that was the ability to have content from other service providers. Apple changed the rules. If things had been like this from the start, no one would be complaining. They might not have iphones either.
posted by zabuni at 8:49 AM on February 18, 2011

Actually, part of the frustration also, for me, is Apple butting in. One of the nice things about digital distribution is that it has dis-intermediated quite few things; or at least, some of the intermediates. It makes things cleaner, cheaper and more friendly. I don't want the traditional brick'n'mortar business model. I have a nice (on the whole) relationship with Amazon; on click purchase, book purchase history, recommendations, multi-device, etc. To Apples credit, I will continue to have this available to me, but Apple has decreed no more link so they have made it (marginally, I'll admit) harder. They also may (big may) drive apps from the store. Why do they feel the need for force their way into this relationship? I don't want a third party. I'm all for them covering the costs of the App store (and then some), but there are other ways.

Something like mandating that a free app (i.e. offered free) has a per-download fee if it offers (or uses) out-of-apple purchase opportunity. Apple's costs are covered, they get per user finders fee, and the app publisher is free to work with the consumer as they see fit. If apple makes in-app subscriptions super convenient, the app publisher might well chose it, especially smaller publishers (who may well become big!).

In either case, it sure adds credence to the anti-walled garden crowd since side-loading solves the problem (for the consumer and app publisher) completely. I liked the walled garden up to now -- I think its benefits have outweighed its downsides -- but this is the first sign of abuse by the garden owner.
posted by Bovine Love at 9:11 AM on February 18, 2011 [1 favorite]

But on the foundation level, I can't find fault with Apple's thinking that they deserve some piece of the revenue those apps generate. Maybe not 30%, but something.

And that's fine. Opinions differ. They do deserve a cut if a subscription is offered through their services but forcing companies to offer the subscription within the service if they offer it outside is alarming. There are lots of free applications that people can voluntarily donate too. There are lots of paid applications for a number of Operating Systems that do not require giving a cut to the operating system vendor upon which the application runs. What's next?
posted by juiceCake at 9:39 AM on February 18, 2011

Opinions differ. They do deserve a cut if a subscription is offered through their services but forcing companies to offer the subscription within the service if they offer it outside is alarming.

But isn't that the exact thing they have to do to close the loophole? I don't think depending on developers to do this out of generosity would be good business sense for Apple.

There are lots of free applications that people can voluntarily donate too.

It's possible that Apple could start going after donationware; if they did, I would be extremely unhappy. Let's cross that bridge if we come to it, though.

There are lots of paid applications for a number of Operating Systems that do not require giving a cut to the operating system vendor upon which the application runs. What's next?

My prediction: given the success of the App Store and the Mac App Store, this business model is about to get a lot more popular. I'm willing to bet that upcoming app stores will follow in Apple's and Google's wake on this and ask for subscription revenues. Not sure what the exact percentage they'll want to charge will be, of course.

On a platform like the desktop, I don't see it being the only place to get apps. On mobile, I'm less sure. I wouldn't be surprised if cellular companies and/or handset makers started rolling out pay-to-play app stores for their devices, for example. These are the folks who sign deals to give you multi-gig un-deletable movie files on the phone they're selling you, after all.
posted by dvorak_beats_qwerty at 10:04 AM on February 18, 2011

dvorak_beats_qwerty said: I'm still not completely clear on whether folks are upset because the amount being charged is too high and threatens services they value, or if they're upset because the general principle offends them, or if mapping stuff from the physical to the digital causes business practices to seem more unfamiliar.

That's been my frustration with this thread up to now as well, though you've articulated it far better than me. Now, later we have some more comprehensible to me answers to that question...

zabuni: They're unhappy because they bought an item that promised to have x, y, and z features, and part of that was the ability to have content from other service providers.

Bovine Love: Actually, part of the frustration also, for me, is Apple butting in. One of the nice things about digital distribution is that it has dis-intermediated quite few things; or at least, some of the intermediates.

Actually, that sounds rather more like the mobile web, which is precisely how Google mostly handles the iPhone platform, they *get* what Apple is doing and opting not to buy in whole-hog on the platform. I think most of this digital content distribution stuff will be doable using web browsers as a platform, and disintermediating Apple. The minute you use a native App, you've opted-in to the system, and now are playing by more restrictive rules, in exchange for the benefits of user experience of native applications.

There are lots of paid applications for a number of Operating Systems that do not require giving a cut to the operating system vendor upon which the application runs.

And there are lots that do, see: game consoles of many stripes, see: multiple mobile phones operating systems. The fact that different operating systems have different methodologies and many use one model does not mean that all operating systems must operate the same way. Whether that's wrong or right a la the five freedoms of the Free Software Foundation is a whole other discussion.
posted by artlung at 10:28 AM on February 18, 2011

The fact that different operating systems have different methodologies and many use one model does not mean that all operating systems must operate the same way.


Agreed. Never implied otherwise.

Whether that's wrong or right a la the five freedoms of the Free Software Foundation is a whole other discussion.

I thought this was the discussion we were having though wider than FSF.
posted by juiceCake at 10:44 AM on February 18, 2011

But isn't that the exact thing they have to do to close the loophole? I don't think depending on developers to do this out of generosity would be good business sense for Apple.

For smaller, and possibly intermediate size, developers, I don't really agree. Being freed of distribution and order fulfillment is, in general, a pretty big plus. I think a lot of publishers might like that, and have liked that. The problem comes in with publishers who already have order fulfillment systems because they also operate outside of the Apple eco-system. It won't only cost them 30%, it will mean some of their investment has gone to waste. In addition, it may actually cost them even more to integrate Apples system into their own. The other publisher that might object is the ones with large scale; they would likely argue that the 30% should scale back after a certain number of sales.

A large part of the App store success, I think, has been that is has been very good for both the developer and Apple.
posted by Bovine Love at 11:20 AM on February 18, 2011

dvorak_beats_qwerty wrote: ""Amazon, if you want to sell additional services on our App Store, we want the chance to benefit for providing you with the opportunity to do so"."

That would be reasonable if there were an alternative distribution scheme as some competitors have. Since the only way one can get an application onto an iOS device is through said App Store, Apple brings the free distribution problem on themselves.
posted by wierdo at 11:22 AM on February 18, 2011 [1 favorite]

Apple changed the rules

It sounds like they are enforcing existing policies, which to date hadn't been enforced or more clearly spelled out. I realize saying that will get accusations of fanboism from the usual handful of people, but it seems like, factually, Apple is only changing two things: 1) How stringently they are enforcing the ability to collect their 30%; and, 2) Adding a subscription feature that did not exist before. The policy itself is about the same as it has always been, with respect to point 1.

As far as the subscription stuff goes in point 2, if we're being fair and look aside for a moment that Big Bad Apple is involved, it's a bit hard to fault any company for not having policy set in stone on something they did not have set up for customers (in this case, developers) to take advantage of from day one of when the iPhone was released. It would be like faulting UPS for not telling customers about fuel surcharges well before gasoline price gouging became de rigeur.
posted by Blazecock Pileon at 9:10 PM on February 18, 2011

It sounds like they are enforcing existing policies, which to date hadn't been enforced or more clearly spelled out. I realize saying that will get accusations of fanboism from the usual handful of people, but it seems like, factually, Apple is only changing two things: 1) How stringently they are enforcing the ability to collect their 30%; and, 2) Adding a subscription feature that did not exist before. The policy itself is about the same as it has always been, with respect to point 1.

Yeah, I have to disagree on this point. With the Flash/Adobe controversy a while back, that explanation made sense. But now? They added a new, previously unsupported feature to the OS that other people had already implemented in their own apps. And now that they have a "supported" version of that feature they're treating the pre-existing functionality in other apps as attempts at circumvention.

That's a change, not a clarification.
posted by verb at 6:16 AM on February 19, 2011

That's a change, not a clarification.

Indeed. Makes the whole Big Brother commercial rather amusing. With all the nonsense doublespeak we have from corporations (not just Apple of course) and the strange phenomenon of people being emotionally and identity attached to corporations I continue to be astounded by all of that and impressed by Orwell's 1984.
posted by juiceCake at 9:54 AM on February 19, 2011

Fascinating datapoint regarding another digital goods provider, Amazon, and how they calculate payments to publishers -- mainly, if your Kindle subscription goes through "WhisperNet" -- 3G -- the publisher bears that cost: The true cost of publishing on the Amazon Kindle. See: Terms and Conditions for Kindle Publishers.
posted by artlung at 9:57 AM on February 19, 2011

the strange phenomenon of people being emotionally and identity attached to corporations

There is definitely a strange emotional, almost psychotic need some people have to trash other people who enjoy using well-made and well-thought-out tools, as well as trash people who create new and interesting things that make the world a brighter and more fun place to live. So it goes.
posted by Blazecock Pileon at 2:29 PM on February 19, 2011

Kindle app, Netflix app, Pandora app... you don't have to pay to download any of them. Free distribution for their stuff through Apple's system.

And there are thousands of free apps that not only don't generate any revenue for Apple on sale but will never have any associated subscription revenue.

If this is really some kind of problem, why would Apple let anything go through their system free at all?

Because:

1) The value proposition of Apple's devices is *greatly* magnified by its app ecosystem -- to the point where people were finding ways to create apps before Apple blessed the effort. And that's just the general case. Specific apps like Kindle, Netflix, and Pandora probably bring extra value to the platform, because these are each high profile services with a large userbases of their own. Having them present means a consumer doesn't have to choose between a Kindle and an iOS device, between Apple's stuff and something else that will let them view Netflix and listen to Pandora.

2) The marginal cost of hosting and delivering some portion of free apps on top of having a platform at all with for-pay apps is probably pretty small.

Of course, even given these facts, I don't think it's unreasonable for Apple to see the subscription revenue going through the platform and see an opportunity. The big problem here is that they're off by an order of magnitude in terms of what you could reasonably expect to get for the service in a competitive market it... along with the fact that they appear to have decided to force the issue rather than really offering a value to those who are already contributing to the platform.

Mark Pilgrim's observations about sharecropping seem to grow more apt.
posted by weston at 3:50 PM on February 19, 2011 [4 favorites]

"Is 30% a fair price for Apple to charge? I must be clear about my intentions here. I do not employ the word “fair” the way my children often do. I am not whining about Apple’s right to charge whatever it wants. Apple may do whatever is best for shareholders in the short- and long-run. I argued yesterday that Apple’s recent decision does not serve its shareholders in the long run. Google announced One Pass yesterday – hastily, I might add – in order to signal to Apple and its shareholders that monopoly power rarely lasts forever. But none of that questions the ultimate morality of Apple’s decision or its rights.

I use the word “fair” to refer to a state of economic efficiency. A fair price is one that maximizes not just individual revenue, but total revenue across all players. Such revenue maximization cannot be achieved without simultaneously satisfying the largest possible number of consumers with the greatest possible amount of innovation.

It is on that basis that I declare Apple’s 30% pricing unfair. How do we know what a fair price is? In an efficient market, fair prices land somewhere close to the cost of delivering services."

I know, Forrester, which immediately brings the credibility down a notch, but I think it reiterates a good point here. This kind of policy isn't only problematic on some "unfair" level because it abusive on a moral level -- though I do think it has that failing as well.
posted by weston at 10:44 AM on February 20, 2011 [1 favorite]

There is definitely a strange emotional, almost psychotic need some people have to trash other people who enjoy using well-made and well-thought-out tools, as well as trash people who create new and interesting things that make the world a brighter and more fun place to live. So it goes.

Agreed. Fortunately we rarely see that here on Metafilter, though we do see a lot of accusations that this is so when it is not and lazy arguments like "haters going to hate" that are disingenuous when someone's personal take and preferences are wrongly warped into some sort of inability to see the light.
posted by juiceCake at 6:47 AM on February 21, 2011 [2 favorites]

It's not just content providers now, the readability app was banned for not going through the store:

http://blog.readability.com/2011/02/an-open-letter-to-apple/
posted by zabuni at 9:18 AM on February 21, 2011

An Open Letter to Apple (from readability.com).

Some key phrases:

"it’s clear that you intend to pursue any subscription-based apps, not merely those of services serving up content. Readability’s model is unique in that 70% of our service fees go directly to writers and publishers. If we implemented In App purchasing, your 30% cut drastically undermines a key premise of how Readability works.

Before we cool down and come to our senses, we might as well share how we’re feeling right now: we believe that your new policy smacks of greed.

...To be clear, we believe you have every right to push forward such a policy. In our view, it’s your hardware and your channel and you can put forth any policy you like. But to impose this course on any web service or web application that delivers any value outside of iOS will only discourage smaller ventures like ours to invest in iOS apps for our services. As far as Readability is concerned, our response is fairly straight-forward: go the other way… towards the web."
posted by weston at 9:20 AM on February 21, 2011 [1 favorite]

(jinx)
posted by weston at 9:20 AM on February 21, 2011

Yeah.

Apple's going to get burned in this.
posted by verb at 10:52 AM on February 21, 2011

Apple's going to get burned in this.

Maybe. It's odd that 30% is too much for Apple charge, while it is okay for Readability to collect 30% as its own cut. Are Readability's developers as greedy as Apple?
posted by Blazecock Pileon at 3:08 PM on February 21, 2011

Mod note: Comments removed. Blazecock, I'm tired of having to tell you to cut it out. Cut it the fuck out.
posted by cortex (staff) at 3:20 PM on February 21, 2011

The difference being that Readability are bringing something to the table. Apple aren't.

And Artw was right. He said that companies are forced to go through Apple, and they are. Apple won't let you link to your alternative methods in your app, which means no body is going to even know that you can make purchases unless you use Apple's system. That is forcing its use.
posted by markr at 3:20 PM on February 21, 2011

If 30% is an acceptable cut for Apple to ask from them, then apparently Readability's 30% is actually too small. Unless, of course, their business model is to pay the content providers, Apple's rent, and work for free.
posted by weston at 3:22 PM on February 21, 2011

Why should Apple give their platform away for free, so that Readability can make its 30%? Despite the misinformation, Apple doesn't require that users have to go through the app to make purchases. Can't Readability just provide alternative methods that allow users to buy products directly from them, to preserve their 30% cut?
posted by Blazecock Pileon at 3:37 PM on February 21, 2011

The platform was not free. I paid over $700 for it, in fact. An, in fact, I own it, not Apple. So, I should get to choose who to give my money to; ultimately I can jailbreak it and do just that, but it would be nice to see Apple enable companies to do business, instead of blocking them (as in these cases, they are enablers in other cases)
posted by Bovine Love at 3:58 PM on February 21, 2011

Why should Apple give their platform away for free, so that Readability can make its 30%?

And as far as I can tell, no one at all is arguing that Apple should give its platform away for free. Lots of people are arguing that 30% isn't a fair amount specifically for this service, which boils down to referral and payment processing services, no matter how shiny it may end up being. 30% may or may not be a fair amount for publishing. Apple seems to think so if the App Store or iBooks are any indication. I don't know that I disagree.

But if you like, I will argue that Apple could well profit by not worrying much about making even a dime on subscriptions that go through apps given away through the App store for free. As I argued earlier, every App brings potential value to their devices, which AFAIK they're selling at a profit in large numbers in no small part because of the added value of these apps. If it's something like the Kindle app or Readability that already has an audience and/or is being offered on another platform somewhere else, there's particular value for Apple because the buyer doesn't have to choose between something else that runs them and Apple's devices. If it's something that's nowhere else, well, that's potentially a unique selling point for their platform. So it's not as if Apple ends up truly uncompensated even without a direct revenue stream. Not to mention the halo effects.

Still, it's probably not unreasonable for them to charge something for the referrals and payment processing. They're just off by an order of magnitude.
posted by weston at 4:02 PM on February 21, 2011

Perhaps if Apple is running a sustainable business, that can enable it to provide an environment for apps like Readability to make money for their developers.

If Apple isn't allowed to make a profit, the whole system probably would not exist in the first place, at least as it exists today.

The products made by a healthy 2011-Apple are much better than what the 1997-near-bankruptcy-Apple was making, by several orders of magnitude.

They're just off by an order of magnitude

A few have been reasonable and made that suggestion, but that's not really the argument most are making, who are stating categorically that Apple doesn't deserve to charge for their platform, which users have somehow "already paid for" and "own".

Nonetheless, if prices get raised to the point where users — the real customers — move to other options (such as the web), doesn't that solve the problem for everyone involved? It's not like Apple has a monopoly. It's just that no one buys stuff via the Android store, and developers are upset about potentially taking a smaller cut or dealing with the risks associated with an ad-based business model.

Users on the whole probably care less about this than developers, and if anything, an easier purchasing system and better customer privacy protections benefit the real customers.
posted by Blazecock Pileon at 4:15 PM on February 21, 2011

I have no problem at all with what Apple are charging. I have a problem with Apple not allowing companies to pass that cost on by charging a higher price for purchases made using it, and I have a smaller problem with them not allowing programs to use other means.

Users on the whole probably care less about this than developers, and if anything, an easier purchasing system and better customer privacy protections benefit the real customers.

I agree with this. Apple a providing a fine service, and I like their customer privacy policies a lot. But they should be willing to compete openly on just this rather than attempting to force its use and attempting to fix prices. If this is such a good system at a reasonable price, then companies will use it.
posted by markr at 4:31 PM on February 21, 2011

If Apple isn't allowed to make a profit

This isn't going to happen. Apple's been banking profits from the combined sales of their hardware and digital goods on their media/app store for a long time before they implemented this policy. There's no reason they won't continue to even if they were to pull back entirely.

who are stating categorically that Apple doesn't deserve to charge for their platform, which users have somehow "already paid for" and "own".

I'm not sure I understand why you're putting those phrases in quotation marks. These things are certainly true of the devices. There is a significant amount of real money flowing from purchasers to Apple even if hardware is the only consideration.
posted by weston at 4:32 PM on February 21, 2011

Apple's been banking profits from the combined sales of their hardware and digital goods on their media/app store for a long time before they implemented this policy.

Why are those profits okay, but these are not? It seems a subjective line has been crossed because it is Apple, even though it is okay for third-party developers to make the same profit margin. Amazon makes even more from its e-book sales.

I'm not sure I understand why you're putting those phrases in quotation marks

Just because I own my car doesn't make the car-maker on the hook for filling up the gas tank with premium, or upgrading the stereo system, or replacing the tires, etc. In the same way, owning the hardware doesn't entitle me to all the software and other extras being made free of charge.
posted by Blazecock Pileon at 4:40 PM on February 21, 2011

Why are those profits okay, but these are not? It seems a subjective line has been crossed because it is Apple...

No, the subjective line is that Apple allowed the ecosystem to develop using one model (Apple-gets-a-cut-for-app-sales) and is now shifting to another model (Apple-gets-a-cut-for-content-delivery). That change is where the subjective line is for most people, and most developers. Some have a problem with it, some don't, but the real issue is for developers that invested time, money, and energy in the ecosystem only to have it change. Now they're justified in pulling out. And Apple will suffer for it.
posted by verb at 4:54 PM on February 21, 2011

Apple will suffer for it.

Everyone keeps saying that each time, but customers keep coming back. Maybe this time will be different, but insofar as this also benefits users, I am doubtful. A developer that leaves out of politics or spite just opens up a business opportunity for someone else.
posted by Blazecock Pileon at 5:03 PM on February 21, 2011

Just because I own my car doesn't make the car-maker on the hook for filling up the gas tank with premium, or upgrading the stereo system, or replacing the tires, etc. In the same way, owning the hardware doesn't entitle me to all the software and other extras being made free of charge.

Absolutely. No one is saying or implying that this is the case. I can't wait for the day when car manufacturers, gas companies, tyre companies and related automotive companies try taking a cut of all fast food sales for restaurants that allow cars to go through drive throughs without charging for the drive through itself, but only the food that is ordered. After all, without cars there wouldn't be drive throughs and therefore, there wouldn't be increased sales at these fast food restaurants and so therefore, the auto manufacturers deserve a cut of that revenue or something. Next up parking lots.

Car analogies. Aren't they the greatest...
posted by juiceCake at 5:04 PM on February 21, 2011

Ugh.
posted by Blazecock Pileon at 5:07 PM on February 21, 2011

Blazecock, you continue to be the master of the strawman. What was the last post that said Apple doesn't deserve to charge for subscriptions? Why keep arguing a point no one is making.
posted by Bovine Love at 6:09 PM on February 21, 2011

verb wrote: "another model (Apple-gets-a-cut-for-content-delivery)"

You mean Apple-gets-a-cut-for-doing-nothing. If it were possible to sideload apps, it wouldn't be nearly as insidious, but Apple is the one that decided that they would be the sole distributor of apps. They put themselves in the position they did, and now they've decided they want to make more from their distribution monopoly on their platform.

It's utterly ridiculous that if I supply content, I have to give them the opportunity to take 30%, whether or not I want their service. If I were a content provider, I'd much rather pay Apple 30 cents per download to distribute the app than pay them 30% on the ongoing purchases (that aren't distributed by them anyway) in perpetuity.

Blazecock, Amazon is not an apt comparison. They charge content providers for delivery over WhisperNet. As an owner of an iPad, Apple doesn't pay a dime for my connectivity. I'm already paying at&t and my cable company for that. As an owner of a Kindle, Amazon does indeed pay for (some of) the bits I consume.

Also note that there is absolutely nothing stopping Apple from ceasing to distribute free apps for no charge tomorrow. They chose and continue to choose to allow anyone who pays their $50 to get free distribution.
posted by wierdo at 6:10 PM on February 21, 2011

Ugh.

Well Bo Diddley says "Yeah" quite a lot in his songs so I'm going to guess James Brown?
posted by juiceCake at 9:30 PM on February 21, 2011

What was the last post that said Apple doesn't deserve to charge for subscriptions?

Pretty much this entire thread.

They charge content providers for delivery over WhisperNet.

That can't be true. I've bought Kindle books online and read them on my WhisperNet-less iPhone, paying the same prices as everyone else.
posted by Blazecock Pileon at 10:26 PM on February 21, 2011

Readability have had their iOS app rejected for violation for section 11.2 of the App Store Review Guidelines: "Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected."

Readability have a $5 subscription service on their website. It strips out clutter and ads from other websites, and gives you a 'clean' feed of an article stories viewable directly in your browser (it's a plugin), or hosted on readability's website for later viewing. You can also read this version on the browser on your mobile device, i.e. in the iOS browser, and it's resized to suit your browser. They produce no content of their own. 70% of their revenue goes to the sites that get decluttered. Apple actually implemented part of readability's code into safari directly.

They also produced a new free iOS app that allowed you access this optimised content that way, rather than in-browser. They had no link to a subscription service in the app, theirs or via Apple's payment system. Lacking the latter, it was rejected.

They're quite annoyed.

11.2 is now being intepreted as any software as a service app provided as part of a multiplatform subscription service needs to add an entry for Apple's API. There's no reason why dropbox, evernote, box.net etc etc won't fall under the same rule - unless they sort out some sort of special deal with apple.

Indeed, there's no reason that Salesforce - who have free iOS apps for salesforce subscribers - won't now be required to provide in-app subscription options via Apple, which they take 30% for. And those are expensive.
posted by ArkhanJG at 12:32 AM on February 22, 2011

Hah, missed it was linked above. Whoops.
posted by ArkhanJG at 12:36 AM on February 22, 2011

Here's the thing though. BP is arguing Apple should get a cut of the App charges in order to pay their costs. The problem is that they are linking two entirely disparate things.

Someone does an online service. They also now make a free iOS app.

Previously, Apple didn't have a method of handling subscription charges in-app - so providers had to do it themselves. They set up their own delivery infrastructure via web and 3G/wifi. They do their own billing on their website. They do their own authentication on their app.

What does Apple get involved in? They provide the app itself via the App Store. If the app is free, they only have to handle delivery of the bits. If the App is charged, then they take 30% of the price for delivery, handling billing, marketing etc. Free apps add value to iOS, even if Apple makes no money directly, so Apple happily promotes free apps, like the Kindle App, because it gets people onto the platform.

People buy hardware to run the software they want. Not the other way around.

So now Apple adds a subscription function to the App Store. And wants everyone who did it themselves before, and will in future as part of a multi-platform app to now run it through them for payments, and take 30% at the same price.

Apple are adding very little new value to the App - but now expect to get 30% of all future revenue that comes from it. They provide a one time service of delivering the app in the first place, and then charge 30% for acting as a credit handler for ongoing charges. That is far, far more revenue than it costs them to host the app. All the ongoing data delivery, the majority of the cost, is still carried by the subscription service, not apple.

If they were being fair, they'd
a) charge something realistic as to their costs and proportionate to what they provide - i.e. billing - so maybe 5% or so. Credit card merchant services charge substantially less than that, and that is all Apple is actually adding in value here.
b) More importantly, make it optional. If they're really doing it to make developers life better, then they should flock to it voluntarily. You only need to force people to use your method if you think they're getting ripped off.
c) find an alternative method to monetize free apps (that make money elsewhere by providing a service you have nothing to with). Charge for what you're actually providing, not speculative invoicing for all time because you incur a one-time charge. Perhaps charge the developer a per-download fee even for free apps, above a certain threshold.

That they're not doing this means Apps like Readability, Sony Reader, Rhapsody won't be available on iOS. If Apple do carry through their threat of kicking off existing Apps in June that don't follow through - there's going to be a lot less subscription-funded services that provide an iOS app as part of a wider strategy. I suspect a number of them will target iOS via browser alone. They simply can't afford to give up 30% of all future revenue for virtually no added value in the present.
posted by ArkhanJG at 12:56 AM on February 22, 2011

Just because I own my car doesn't make the car-maker on the hook for filling up the gas tank with premium, or upgrading the stereo system, or replacing the tires, etc. In the same way, owning the hardware doesn't entitle me to all the software and other extras being made free of charge.

I don't think this analogy works the way you think it does.

I buy an Apple car. I decide to buy some more tyres. In fact, let's just say there's one garage that sells the particular types I like for my car. Let's call that tyre seller Sony, and my tyres look like books!

So having bought my car, I wave goodbye to Apple, I go to Sony and say, give me some lovely book tyres please. And Sony come over to my car, and put some tyre books on my car, using their tyre delivery van. I pay Sony, in Sony's shop for their tyres.

Now Apple turns up and says - hey, I want 30%. You're using my car to put tyres on! I'm shutting down Sony's store, you're not allowed to serve Apple car customers any more.

I say WTF, but go to buy fuel from Rhapsody. Their singing fuel is so good, I hook my car up with their fuel hose, and drive around everywhere - whether it's on roads I own, or government roads that I pay taxes for - and have my Rhapsody singing fuel delivered to my car everywhere I go. And rhapsody has my card number, and they bill my card to deliver fuel to me.

and Apple turns up and says - give your card to me, I want 30% to charge your card, and give the rest to rhapsody. We don't provide the road, or the fuel, or the hose, just the car. But if you don't give us 30% of what you pay for fuel, we'll put a lock on your fuel cap, and no more fuel for you!
posted by ArkhanJG at 1:07 AM on February 22, 2011

Except Apple won't show up at Sony or Rhapsody, but they will insist that they sell their books and music as well at Apple and if customers buy it there they'll get a cut, if not, they won't. It's the insisting on you have to do it through us as well that people are objecting to. No one is objecting to the idea that Apple deserves a cut if a vendor does use their services as an option, meaning by choice (the amount of the cut may be in debate however).

Despite a fantasy argument to the contrary that pretty much the entire thread is objecting to Apple getting a cut, no one in this thread has a problem with Apple getting a cut of revenue if a vendor decides to use their services but the fact that Apple is insisting on it is what people object to. The message is basically use our services as well as your own or else your app won't be in our store any more and it won't be available on our platform because we don't see the value of it for our customers or our platform and we have leverage to "influence" you to do this. It's similar to Microsoft saying don't package other browsers with Windows or we'll charge you more. They leveraged their influence to do this. Apple is leveraging their position to force people to use a service they don't need and already provide. Corporate mafia.
posted by juiceCake at 5:09 AM on February 22, 2011

Apple will suffer for it.

Everyone keeps saying that each time, but customers keep coming back. Maybe this time will be different, but insofar as this also benefits users, I am doubtful.

This benefits users in one way and one way only: it gives them one place to enter payment information. That's it. Finis. End of story.

While that is a nontrivial benefit, the tradeoff is the 30% cut Apple now demands of all transactions processed by software running on its platform. I argued upthread that the 'agressive' interpretation of this change would be absurd: Apple would surely not demand 30% of the revenue from web services and other low-margin businesses with freemium models, simply because they released iPhone apps. I was wrong, and I think that Apple will, in the medium term and long term, suffer for it.

Sure, people will continue buying iPhones, but people continue to buy Windows boxesby the metric ton no matter what bad things are done by Microsoft. Actions that alienate developers and poison the development ecosystem don't lead to instant stock and sales dips, but they do hurt the company that relies on the ecosystem eventually. The iOS platform is particular susceptible to this, because much of its success is based on a steady stream of innovative, interesting apps.

A developer that leaves out of politics or spite just opens up a business opportunity for someone else.

Please note the example of Readability: they aren't leaving out of spite, they were rejected from the app store for doing something that you -- upthread -- said would be perfectly fine.
It's unlikely that apps will abandon the iPhone completely. More likely, they will either release feature-crippled versions for iOS, raise their prices by 30% across the board, or stick to iOS compatible web apps, the way Readability is.

You've said upthread that Apple's cut is to cover their hosting and infrastructure costs, and that companies who can't afford to give Apple a 30% cut of all of their business shouldn't ship on iOS. If Apple can't afford to process a digital payment without taking a 30% cut, they shouldn't be running infrastructure.
posted by verb at 6:43 AM on February 22, 2011

Well, verb, I'm glad to see that you've come around to my interpretation :) At the same time, I'm sorry to see it.

As an aside, but related issue: Some while back, Mr. Jobs dodged a side-load question; i.e. he most definitely did not give the usual kind of NFW. He seemed to leave it open.

I wonder if this is the 'opener'; maybe they will kick all the non-compliant out, and then say 'run your own damn fulfillment and distribution if you don't want to pay' which some would be happy to do. They would still have to keep the 100% free apps in the fold, they are a huge draw. Probably wishful thinking.
posted by Bovine Love at 6:51 AM on February 22, 2011

I think consumers will suffer for it. If you're on a non iOS device and have a subscription to a service that is available on iOS and the vendor wants to stay on iOS they'll have to raise their prices to accommodate for the potential decrease in revenue for those who use in in-app subscription services the vendor is now being forced to offer (in addition to their own).

It has the potential to cost consumers outside the iOS system more money as well.

Thanks Apple! It's wonderful that you're leveraging your success to make the world both a better place apparently, and a potentially, a more expensive one.
posted by juiceCake at 6:51 AM on February 22, 2011

I just had the realisation today that trading apps (e.g. etrade) are completely fucked by the new rules. Wonder what Apple is going to do.
posted by seanyboy at 6:57 AM on February 22, 2011

Well, verb, I'm glad to see that you've come around to my interpretation :) At the same time, I'm sorry to see it.

Yeah. I still suspect there will be some sort of rollback eventually, but that's based on my hope rather than any particular chain of reasoning. I think I officially owe you a beer, based on the bet I made earlier in-thread? Heh.
posted by verb at 7:25 AM on February 22, 2011

Blazecock Pileon wrote: "That can't be true. I've bought Kindle books online and read them on my WhisperNet-less iPhone, paying the same prices as everyone else."

And the publisher didn't pay extra for that because you didn't use WhisperNet. (although I think the charge only applies to periodicals, I'm pretty sure it's built in to the deal with books)
posted by wierdo at 7:40 AM on February 22, 2011

I still suspect there will be some sort of rollback eventually...

Given the rollback on other programming frameworks it is a possibility. But they may not care about small players leaving the roost with their current Walmart mentality in this matter.
posted by juiceCake at 7:43 AM on February 22, 2011

Tinygrab are another company abandoning iOS for their free app.

They do social screenshot saving; you install an app on OSX or windows, click a button and upload the screenshot to the website. Free accounts have a 10 pics per day limit and adverts, or you can go premium which also allows you to dump to your own ftp server as well as being ad-free, unlimited uploads etc.

They also have a free iOS app, which performs the same function - but by having it link into their premium account system, they violate the iOS terms in about 6 places now; in their own words:

Apple would now like a slice of our pie, which is fair enough. We’re more than willing to give Apple a cut of the sales that they assist in, but we can’t. They simply won’t let us. Never mind the fact that 30% is a ridiculous amount to ask us to fork over, considering that we already pay $99 a year for the privilege to develop apps for the Mac App Store and a further $99 a year to develop apps for the iOS store. Never mind that Apple also get a cut of any revenue that we generate from selling our apps through their stores, they now want in on our account and subscription service. However by doing this they’ve just prevented and locked us out of ever being able to introduce the TinyGrab app into the Mac App Store, as well as not being able to ship updates to the TinyGrab iPhone app. Here’s why…

Remember that account system we sell via TinyGrab.com? Well if you’re a paying customer it actually unlocks features in the app which are closed off to free users. These are features like FTP uploads. Infringement Number 1:
“Apps that unlock or enable additional features or functionality with mechanisms other than the App Store, except as approved in section 11.13, will be rejected”
We currently sell our accounts from TinyGrab.com through PayPal. We can’t actually use Apple’s In App Purchasing system because they won’t pass on a user’s data to us, they also prevent you from purchasing goods that exist outside of the app and the app store. So, for example, it prevents you from actually buying a TinyGrab account because the account is a real world purchase and doesn’t lay within the jurisdiction of Apple. Infringement Numbers 2 & 3.
“Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected”
“Apps using IAP to purchase physical goods or goods and services used outside of the application will be rejected”
The move to TinyGrab 2.0 will see accounts that expire after a limited time if you don’t renew your subscription. Infringement Number 4.
“Apps containing “rental” content or services that expire after a limited time will be rejected”
And the final infringements are, of course, about the IAP revenue split.
“Apps that link to external mechanisms for purchasing content to be used in the app, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected”
“Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Developer Program License Agreement.”
posted by ArkhanJG at 8:01 AM on February 22, 2011

Despite a fantasy argument to the contrary that pretty much the entire thread is objecting to Apple getting a cut

There's nothing about this that is a fantasy. Apple is taking a cut on sales through it's system. Most in this post object and think Apple should get nothing for what they have put together, which does not make business sense for reasons already discussed. The whole "we are being coerced" is victim-speak by devs who don't want to let go of profits.

The fake victimization narrative is compelling because, let's face it, "Apple is an evil mafia" — despite it having created a new platform in three years from scratch, one which makes devs millions in the first place.
posted by Blazecock Pileon at 10:53 AM on February 22, 2011

There's nothing about this that is a fantasy. Apple is taking a cut on sales through it's system. Most in this post object and think Apple should get nothing for what they have put together.

This is a lie, plain and simple BP. I'm not suggesting you're deliberately trying to deceive anyone, but at the very least you're repeatedly overlooking the most important fact that everyone here keeps repeating:

Apple is now requiring that you use their system, even if you were previously using a different one.

They're perfectly justified in charging for their billing, fulfillment, and user data tracking system. But previously, companies were able to use their own solutions if they made more sense or didn't need integration with the iOS store. Now, apps that take that approach are being rejected from the app store.

That is the key fact, and there is no 'false victim' narrative at play. Apple has the right to do this, just as Microsoft would have the right to make Windows only run Microsoft brand applications. If you'd like to imagine that I'm an Apple hater, desperate to lash out at any perceived shortcomings, you're welcome to. Please remember that I'm an iPad, iPhone, iPod, MacBook Pro, MacBook, Mac Mini, PowerMac, Newton, Quadra, IIsi, Mac Plus, Fat Mac owning Apple user who has spent most of the thread defending them and urging caution before pulling out the torches and pitchforks.
posted by verb at 10:59 AM on February 22, 2011

There's nothing about this that is a fantasy.

I believe there is. You don't. End of really. Thanks for the effort though, really appreciate your perspective my friend, even though you continue to distort what people are saying. I'm sure, the fault is in our own typos, grammar, and communication skills and not your own reading of it.

Have a great Apple enhanced day!
posted by juiceCake at 11:15 AM on February 22, 2011

This is a lie, plain and simple BP.

Most in this thread are objecting to Apple collecting anything as a matter of principle — it wouldn't matter if it is 30% or 1%. A few are being reasonable and wondering if the cost is too high and should be adjusted, suggesting there will be market consequences from charging too much, but that isn't what this thread is about, on the whole, and being called a liar doesn't change that.
posted by Blazecock Pileon at 11:20 AM on February 22, 2011

you continue to distort what people are saying

You have accused me of saying things I haven't. So it goes.
posted by Blazecock Pileon at 11:22 AM on February 22, 2011

You have accused me of saying things I haven't. So it goes.

Just my perception. Thanks for the correction. You're just reading it differently I guess and as I said, I'm sure the failure is mine or ours and not yours. I'm not sure how much more I can appease you. I apologize for any misconceptions. Enjoy your day and believe what you will, as will I. Again, really appreciate your gracious effort in this discussion. We are of a kind, you and I.
posted by juiceCake at 11:28 AM on February 22, 2011

This benefits users in one way and one way only: it gives them one place to enter payment information. That's it. Finis. End of story.

Another way that it benefits users is in setting up a barrier for how information is distributed to third-parties. The unspoken arrangement in the competitor's 10% deal is — how did another Mefite put it? — the developer is the customer and users are the product. It is cheaper because ads can be targeted more effectively. I would suggest that fewer ads are a net positive for end users, but part of the gamble here is whether users want to pay raised app and subscription prices for that benefit.
posted by Blazecock Pileon at 12:08 PM on February 22, 2011

Another way that it benefits users is in setting up a barrier for how information is distributed to third-parties.

If I want to purchase something from a company, Apple is the third party, not that company. They are inserting themselves between me and that company I wish to do business with.
posted by verb at 12:51 PM on February 22, 2011

To clarify: it is absolutely their right to do so, but any discussion of this issue that ignores the fundamental change Apple is enforcing is a misdirection.

This isn't a matter of people saying "Apple should charge nothing." It isn't a matter of people hating Apple. At this point, it's a discussion about the implications of a technical and legal change that Apple has implemented, whose primary driver appears to be the desire to tap into the ongoing revenue stream of companies that release iPhone apps.

They can do this. Other companies are also perfectly justified in pulling out of the iOS ecosystem. You've said that such moves would be "spite" based rather than rational economic decisions, and I think that suggests you're attaching an emotional component to the discussion that doesn't need to be there.
posted by verb at 1:02 PM on February 22, 2011

You've said that such moves would be "spite" based rather than rational economic decisions

No, I said no such thing. I said that developers who leave out of politics or spite will be leaving open a business opportunity for other developers. That sentence is very clearly not the same as saying all developers who are leaving are doing so for those reasons. So, no, I said no such thing, at all.

I think that suggests you're attaching an emotional component to the discussion that doesn't need to be there.

This seems ironic to me, because about 99.99% of what seems to be an irrational, emotional response to this policy by developers and others would have probably been cleared up by starting with reading what Apple actually said.
posted by Blazecock Pileon at 3:04 PM on February 22, 2011

No, I said no such thing. I said that developers who leave out of politics or spite will be leaving open a business opportunity for other developers. That sentence is very clearly not the same as saying all developers who are leaving are doing so for those reasons. So, no, I said no such thing, at all.

The rest of us were talking about developers that make economic decisions, and you replied that developers who leave "out of spite" would only be hurting themselves. I apologize if I misunderstood your comment as being a response to the conversation, rather than an unrelated pronouncement.

In all seriousness, BP, you're beyond rational conversation. Not because you're supporting Apple's decision -- rather, because you're pulling out wacky double standards and accusing anyone who comes to different conclusions of being irrational and hateful towards Apple. You've made sweeping pronouncements about the motivations of posters here, you've ignored the issues that most people are discussing and beat up on straw men... And then you demand that anyone responding to you bend over backwards to avoid attributing anything to you until you sign off on it.

That's well within your rights, but it means that I'm going to ignore you, even though I'm on your "side" in these discussions.


This seems ironic to me, because about 99.99% of what seems to be an irrational, emotional response to this policy by developers and others would have probably been cleared up by starting with reading what Apple actually said.

Yeah, that's what I've been saying for quite a few days -- until Apple started rejecting apps for doing what you're saying should be okay. Honestly, BP, I'm an Apple guy, too. I'm not getting my hate on here -- I just think they're hurting themselves and their ecosystem with this move. They're doing precisely what those of us who defended Apple said wouldn't be done. You are being proven wrong. I am being proven wrong. Those of us defending Apple's decision are being proven wrong.

The only discussion now is around what will happen.
posted by verb at 3:53 PM on February 22, 2011 [2 favorites]

And then you demand that anyone responding to you bend over backwards to avoid attributing anything to you until you sign off on it.

Pointing out where and how I am being misquoted is not a demand for anything.

Apple started rejecting apps for doing what you're saying should be okay

Though I suggested people read the specific part of the policy that contradicts popular misconceptions about it, I haven't argued for what should be "okay", so I do not know what you are attributing to me specifically. While they should get to take a cut, I suspect it is probably going to turn out to be too much and the market will correct things out. I have tried to suggest as much a few times, I think. But whatever.
posted by Blazecock Pileon at 7:02 PM on February 22, 2011

I've seen some interesting posts about some possible run around solutions that really highlight the potential absurdity of this ridiculous behaviour by Apple. I have a Gmail account. It is one account and it allows me to access a number of Google's services, such as Calendar, Docs, etc. I can access those services via one account through a variety of devices. My Macintosh VM, my Windows 7 machine, a mobile device, etc.

Now if I was using the pro level subscription to these services and therefore making payments yearly and these were apped in addition to be available over the web Apple would get a cut in this new model if I signed up within the App because Google would be forced to offer that option or have the app banned.

Others are now proposing, as a work around, that companies offer a subscription for Apple devices only and a separate and therefore different subscription for other devices. Under this model, I could get a subscription for an iApp from Google or some newspaper or other service with it's own account settings, username, password but for other devices I could get a cheaper subscription (less the extra cost of the Apple one). This is similar to the "cash discount" work around or delivery is free but you can get a "pick up special" type of deals. Apple, because they have control over the app acceptance/rejection would probably still kick you out but it would be outrageous if they could dictate that products for other devices be priced the same as products for iOS devices if they are subscriptions. It would be absurd to have to have subscriptions that do not run across multiple platforms but Apple's decision may well make this so.
posted by juiceCake at 6:28 AM on February 23, 2011

Thus far all signs have been that this affects "content" only, though the wording is ambiguous enough to cause concern.
posted by Artw at 6:50 AM on February 23, 2011

True, but the Google example is good example of a subscription to services (which could be content) that you can use on multiple devices. If Apple limits itself to content type subscriptions the same thing could happen, a subscription to some newspaper's content is not the same for iOS as it is for other devices and therefore, not subject to the Apple tax.
posted by juiceCake at 6:56 AM on February 23, 2011

That said, isn't Readability more of a service?
posted by juiceCake at 6:58 AM on February 23, 2011

Apple Set to Approve 'Readability' for Inclusion in App Store?

"It is unclear exactly what events have transpired to patch things up between Readability and Apple, although the tenor of the Tweet suggests that it is happy with the outcome. Consequently, it seems that Apple may have reversed its initial decision or at least required only minor modifications on the part of Readability in order for the app to be accepted."
posted by Blazecock Pileon at 2:51 PM on February 23, 2011

There's never really been a question that the #1 factor in whether an app is or is not approved for the app store is, in fact, whether Apple gets bad press. Objective standards? What's that?
posted by kafziel at 3:17 PM on February 23, 2011

Obviously false on the face of it as the vast majority of apps get no press what so ever.
posted by Mitheral at 5:53 PM on February 23, 2011

And yet when they do - whether it's something that people think shouldn't have been accepted, like Peekaboo Tranny or the Manhattan Declaration, or something that shouldn't have been rejected, like any number of satire apps or this Readability one - Apple always caves to the opinion of the internet. Rules for admission only matter in so far as following them isn't unpopular.
posted by kafziel at 7:12 PM on February 23, 2011

Perhaps they'll react quicker overall then they did with the framework debacle. Interesting times ahead. I commended them for falling back to a more reasonable position then and will do so again if they do it in this instance. I don't view it as succumbing to bad press or lack of a popular policy but rather seeing that the decision(s) in the first place were simply outrageous and/or had consequences that they could not have foreseen.

The content subscription versus service subscription issues remain.
posted by juiceCake at 7:58 PM on February 23, 2011

Apple always caves to the opinion of the internet.

But opinions are so varied I'm not sure how that's possible.
posted by juiceCake at 7:59 PM on February 23, 2011

Store Wars: Opt out, opt in, sell out, capitulate?

Put simply, publishers don’t want readers to opt in, because they know readers will prefer to opt out. Transparency is not a friend of publishers who for decades made a mint by selling out readers to advertisers and list brokers. Most readers may not be aware of this, but those who are don’t like it. Publishers know that and hate Apple for calling their bluff. If personal info harvesting isn’t essential for publishers’ business model and it is in the interest of readers, then why would they be against an instant referendum in the form of the opt in button?...

Publishers have several choices:

...

4. Wage guerilla warfare against Apple in the press — Adobe, Part Deux. This is inevitable since many of those who produce the anti-Apple hysteria write for the publications that would financially benefit from a change in App Store policies.

5. Ask for government help — Publishers will likely ask the government to intervene and conduct a threatening investigation of App Store policies to browbeat Apple into changing its policies. Also, as the last refuge of scoundrels, they will appeal to the Congress for tax payer support under the guise of saving jobs.

...

8. Create alternatives to iTunes/iOS — This is the perennial Plan B, if Apple doesn’t budge. The usual suspects are those with a store and the will to spend money liberally to undermine Apple, namely Google, Microsoft and Amazon. Google recently transferred its upcoming music store to Andy Rubin’s Android division and is now negotiating with publishers. Microsoft rolled Nokia’s Ovi into its own store and would be happy to bankroll publishers to attract Windows Phone users. Amazon has already tangled with Apple last year after the introduction of iBooks over the agency model Apple offered to publishers. These are all big competitive players with plenty of cash to render as absurd any notion that Apple somehow has a monopoly over digital stores. It is, however, a reminder that all such previous attempts to cut down Apple by direct competition has failed
posted by Blazecock Pileon at 9:22 PM on February 23, 2011

The idea that Apple protects your privacy is fine if you only consume on you iOS device. If you wish to be multiplatform, it actually harms to consumer, since the consumer will be unable to authenticate themselves to the provider.

Apple presents this as protecting your privacy. It could just as easily be viewed as making sure you are locked in to their system. If Apple provides out-of-iOS authentication, where my service can ask Apple to authenticate, I'll buy the privacy argument more readily.
posted by Bovine Love at 5:21 AM on February 24, 2011

What an awful, emotional laden, childish article. Thanks for posting. I love seeing arguments that have a few good points (their privacy policy is great but has nothing to do with strong arming subscriptions onto their devices) being destroyed by the authors that write them.

Anti-Apple hysteria? It's so absurd we see this "charge" or "argument" leveled consistently when an Apple policy or two is criticized or disliked. This over the top bullshit is classic. We never see this on Metafilter because we misinterpret it when we think we do but thanks for posting a real world example.

Scoundrels? So you object to being manhandled in a distinct mafia style and you're a scoundrel. This makes my day for humour.
posted by juiceCake at 5:28 AM on February 24, 2011

Dammit, the I tags were closed on preview. Trying that again to be more legible.

Apple Set to Approve 'Readability' for Inclusion in App Store?

Follow up article;

So why the change from war to peace? Has Apple’s policy already changed? Well, no — not yet, anyway. Readability’s Richard Ziade said his tweet was a “joke” and had this to say:

We did re-submit to Apple with an explanation of why we think they should approve Readability. We did not speak to anyone at Apple. We have no idea if they’ll approve it. We just explained ourselves as best we could through the appeal process.

I love this quote from BP though;

These are all big competitive players with plenty of cash to render as absurd any notion that Apple somehow has a monopoly over digital stores. It is, however, a reminder that all such previous attempts to cut down Apple by direct competition has failed

Because it's clearly written in bizarro-world where Amazon, Google and Microsoft/Nokia all set up stores in iOS with Apple's blessing, and iDevice customers voted with their wallets and stuck firmly with Apple's own App Store. Apple would have a bit more credibility claiming that delivering a few hundred kilobytes of data via the App Store means they deserve 30% of all future revenue from developers if they didn't force said developers to only be able to use Apple's service on iOS.

What's the next story from bizarro-world? Apple complaining about how much the Mac App Store costs to run, so only Apps installed via it will be allowed to run on OSX?
posted by ArkhanJG at 7:15 AM on February 24, 2011

Google following Apple's strict in-app purchase strategy?

Google may be following an in-app purchase strategy similar to that of rival Apple. Visual VoiceMail developer PhoneFusion claims its app was removed from the Android Market for skirting Google Checkout and using a separate system to take in-app payments, though the search giant has yet to fully detail which terms of the developer payment rules were violated.

The free app represented one of the most popular titles in the Android Market, with over a million downloads. Users could pay for premium services such as fax numbers and voicemail transcriptions, however PhoneFusion routed customers to its own website for upgrades.

Google cited Section 3.3 of the Android Market Developer Distribution Agreement as the source of the problem, according to a GigaOM report. Among other items, the section includes an explicit requirement that "all fees received by developers for products distributed via the Market must be processed by the Market's Payment Processor."
posted by Blazecock Pileon at 6:00 PM on February 25, 2011

As much as you want this to be the same, the two situations are not analogous.

And even if they were, citing an article which says "other company doing evil thing" is no way of proving that Apple are in the right.
posted by seanyboy at 5:29 AM on February 28, 2011

As much as you want this to be the same, the two situations are not analogous.

Hah. Of course not.

And even if they were, citing an article which says "other company doing evil thing" is no way of proving that Apple are in the right.

I don't really agree with what Apple is doing, I just found it ironic that Google doesn't get grief from the usual parties when it does the exact same thing.
posted by Blazecock Pileon at 6:20 AM on February 28, 2011

Why Was PhoneFusion Pulled from the Android Market?

Seems sort of sucky, but unrelated.
posted by Artw at 7:18 AM on February 28, 2011

I just found it ironic that Google doesn't get grief from the usual parties when it does the exact same thing.
I know. (swoon face). It's like they're so blinded by their allegiance to this company that they'll ignore everything in order to protect the good name of said company. Even when the evidence is completely & utterly unavoidable. Heh. What is it we say? Do you want chips with that Cognitive Dissonance? LOL.
posted by seanyboy at 8:31 AM on February 28, 2011

Because Google does not require the user, nor the developer, use the Android market in order to get an app on the device, then Google is not doing the same thing.
posted by Bovine Love at 9:11 AM on February 28, 2011

Even outside of that, not very similar. Google seems to have rejected the app because PhoneFusion allows an upgrade to an ad free version from outside of the app - something that they are offering cross platform, and that is arguably more tied to the PhoneFusion account than the app. I'm not 100% sure on this, but I think it would be something that would actually be allowable in the Apple app store. On the other hand, it seems like their rules specifically allow "untaxed" content purchases.
posted by Artw at 9:36 AM on February 28, 2011

Even outside of that, not very similar

From Artw's link:

"The gist of this section is fairly straightforward: you can't get the benefit of distributing a free app in the Android Market, but then sell the paid version elsewhere to get around paying Google their cut."

If anything, this is even more greedy than Apple's policy. From reading their policy, Apple gives developers the option to sell content outside the app, who don't want to share revenue. And those who don't want to sell on Apple's App Store can always go to Cydia.

When presented with reality-based evidence that everyone in this business wants their percentage, I was hoping to see a bit more of a fair response. Citations like these and others make a case for bias here, and I hope Metafilter starts paying equal scrutiny to all parties involved going forward.
posted by Blazecock Pileon at 2:34 PM on February 28, 2011

Blazecock Pileon: "And those who don't want to sell on Apple's App Store can always go to Cydia."

Yeah, that's not the same thing at all. I don't appreciate Google's policy on this in the least, but it's slightly less heinous, in that I as an end user can relatively easily sideload anything I want (or use a third party store).
posted by wierdo at 2:58 PM on February 28, 2011

No warranty-voiding necessary, even.
posted by wierdo at 3:00 PM on February 28, 2011 [1 favorite]

Google actually helps you avoid their scheme; they then try to lure into their scheme by providing value (or at least try to appear to provide value). Apple is forcing the scheme. It is the forcing part that is fundamentally icky. If Apple permitted side-loading without dodgy, sometimes difficult, jail breaks you wouldn't hear a peep out of me. It is the no-side loading, forced-subscription-offer combination that is difficult and will leave developers without an viable option on the platform. I smell a change coming, so we'll see what Apple does in the next bit, maybe after their next announcement.
posted by Bovine Love at 6:06 PM on February 28, 2011

I meant to say [i]some[/i] developers. Clearly some business models are reseller friendly, or perhaps can need a third party fulfillment model, and those will do well under Apples new rules.
posted by Bovine Love at 6:08 PM on February 28, 2011

But wait--if PhoneFusion is in violation, what about other apps with similar models: the additional storage you can buy from DropBox; the  products you can buy through Amazon's various apps; the premium version of Yahoo! Mail that works over wifi; premium accounts for music streaming apps like Pandora; free apps like Rdio that don't work at all after a short free trial, unless you sign up for a premium account on the web. Should this serve as a warning to all those apps' developers?

Thankfully, no. Remember, Google's first email to PhoneFusion referenced the Developer Content Policy, a different document. There, we find a similar clause, but with a couple of exceptions: for purchases of physical items, and "where payment is for digital content or goods that may be consumed outside of the application itself." In other words, when I buy additional storage for my DropBox account, it's tied to the service as a whole, and not to the Android app itself. But when I pay to remove ads from an app, I'm just paying to remove ads from an app.

So no, not very similar.
posted by Artw at 9:47 AM on March 1, 2011

John Gruber - who is seldom defeated in his efforts to defend Apple - goes all out here.
posted by Joe Beese at 6:59 AM on March 2, 2011

Android Developers Union

"We have compiled a list of seven demands which Google can implement to improve the Market...

* Renegotiation of the 32% Google-tax on applications sales
* Remedy to the Order of Entry Effect
* Public Bug Tracking
* Increased Payment Options
* Codified Rules and a Removal Appeal Process
* Communication and Engineering Liaison
* Algorithmic Transparency"

(I might add: please don't do ridiculous things like pretend 45ms is "low latency" for audio applications, for heaven's sake)

Funny thing about this: I was thinking about situations in which unions make sense and in which they make less sense the other day, and the conclusion I came to is that where where market conditions, specialized knowledge, and/or geography mean that most labor is essentially beholden to one employer, they make the most sense. Software has up until now not really been such a field, particularly if you take the broad view of software development skills, and I think that's one of the reasons why there's never been any kind of real professional association much less a guild or union.

But my next thought was: if there's anything that actually could produce the pressures necessary to create a developer's union of one kind or another, it's an App Store model. And... well, here's at least an attempt. We'll see if anything comes of it.
posted by weston at 10:31 AM on March 2, 2011