Apple: if we get you subscribers, we deserve a cut

[zridling]

The crazy just keeps on at Apple.
http://arstechnica.com/apple/news/2011/02/apples-in-app-subscriptions-if-we-bring-in-subscribers-we-deserve-a-cut.ars

"Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," CEO Steve Jobs said in a statement.
____________________
"And if you so much as eat an apple or say the word apple or think of apple, send us 30%!

[zridling]

All this time I thought it was the app that brought in the customers, not the OS. How foolish of me.  

If Amazon thought like Apple, they'd raid your bank account. "You know that investment book you bought from us and made $3000 on? Send us $900 immediately or we're deleting your account and banning you!"

[Renegade]

"All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."

Good grief...

I suppose it might help to have people fill in a long form so that they'd rather type on a computer than their phone...

[zridling]

@Renegade
Exactly! So where does the 30% figure come from! Why not 50% or 70% or 95%? Would any Apple user protest if it were doubled tomorrow to 60%? Apple clarified later today: The rules are very straightforward: Publishers can continue to sell digital subscriptions on their own websites and give free access to existing subscribers. Apple will not take a cut from these transactions. Publishers who offer out-of-app subscriptions, though, also have to offer in-app subscriptions and the price has to be the same or lower than for subscriptions processed outside of the app. Apple will take a 30% cut from these in-app transactions. http://www.apple.com/pr/library/2011/02/15appstore.html

And what if 30% never existed in history in some businesses? Apparently this means Amazon is going to have to pull its link to the Kindle Store that it currently provides in its iPhone, iPod Touch and iPad apps. Yea, they're sure making it easier and simpler all right. Question for Steve Jobs: How much is enough?

[Renegade]

30% is a pretty standard affiliate commission. Some go higher. At CJ you can give out up to 75%.

But Apple brings ZERO value to the table as a retailer. They don't *earn* that 30%.  It's up to YOU to go out and get your customers. With 200,000 software titles in the Apple App Store (not "on" the app store because I speak English properly... but that's another rant), you are nothing but the long tail. And they want 30% to throw you in the long tail? Huh? YOU are still responsible to go out and spend the money, time, and effort to get the customers. And THEN they want a 30% cut from YOUR work AGAIN?

If Apple did jack to actually earn that 30%, it would be different. But it's not.

The whole thing boils down to YOU putting in all the work and they collect for doing nothing.

Now, if you have preferential placement in the store, like the first page or the top few in a category, well, I can see paying for that. But to be #4,832 of 12,356? That's just bullshit. And that's the bullshit piled on top of all their other bullshit, but as above, that... is another rant...

[zridling]

You make good points, Renegade. Apple claims "they built a new backend system that any of these apps can take advantage of. And when they do, it will give them within one-click access to some 100-mn+ credit cards." Bull. That's already in place! And just as there's no free trial for their apps, Apple also doesn't allow a free trial subscription. You're all in or forget it. That makes it hard on companies with more expensive subscriptions (or apps).

I really shouldn't make a snit over this. Companies should just charge Apple users a 30% tax on everything they buy. In fact, double it to 60% and make 30% off Apple's back. Problem fixed. If Apple users complain, give them Steve Jobs' iPhone number.

[Deozaan]

I really shouldn't make a snit over this. Companies should just charge Apple users a 30% tax on everything they buy. In fact, double it to 60% and make 30% off Apple's back. Problem fixed. If Apple users complain, give them Steve Jobs' iPhone number.

I agree with this, except they can't. From your own post previously (emphasis added):

Publishers who offer out-of-app subscriptions, though, also have to offer in-app subscriptions and the price has to be the same or lower than for subscriptions processed outside of the app. Apple will take a 30% cut from these in-app transactions.

So in my opinion it's time for publishers to withdraw their apps from Apple and make it perfectly clear to their customers exactly why they had to, until Apple wises up. And then maybe stay out anyway if Apple changes their mind.

I can hope, can't I?

[Deozaan]

I just looked at the source article, and you forgot to quote the really bad part (emphasis added):

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.

[Renegade]

And all this is a large part of why I truly hate Apple (most days).

They're vampires.

[zridling]

And Rhapsody is the first to say NO. The model can't work and keep content providers in business:
http://news.cnet.com/8301-17938_105-20032119-1.html

Our philosophy is simple too--an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable.

______________
@Deozaan: The reason I missed it is because I didn't read it clearly. That's worse than I thought.

[Deozaan]

And Rhapsody is the first to say NO. The model can't work and keep content providers in business:
http://news.cnet.com/8301-17938_105-20032119-1.html

Our philosophy is simple too--an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable.

And you gotta love the comments below that article where people are actually defending Apple on this...  

Good job for Rhapsody! I hope Amazon and all the others follow suit.

[f0dder]

And when they do, it will give them within one-click access to some 100-mn+ credit cards."

Pft, that doesn't cost more than $100 max from your favorite Russian or Ukranian vendors

[Renegade]

YAY for Rhapsody~!

I hope others follow suit.

Apple needs to earn that 30%.

[zridling]

Google's One Pass takes a swipe at Apple's 30% by taking only 10%. Still too much! "The cut is too damn high!"
http://googleblog.blogspot.com/2011/02/simple-way-for-publishers-to-manage.html

More detail at WSJ:
http://online.wsj.com/article/SB10001424052748703373404576148142926860706.html

Steve Jobs said his company is protecting user privacy and simply seeking the same compensation for periodicals as for other content sold through iTunes. He said the revenue split is justified because Apple is bringing additional subscribers to publishers.

Jobs talks like he owns his customers, and almost monomaniacal about mega-profit.

[Renegade]

Google takes a swipe at Apple's 30%:
http://googleblog.blogspot.com/2011/02/simple-way-for-publishers-to-manage.html

The post implies it's free, but doesn't "Google Checkout" charge 10%? If so, that's still about 8% too much for me.

I was just about to post the same topic, but you beat me to it!

10% is MUCH more manageable than 30%.

Google One Pass is currently available for publishers in Canada, France, Germany, Italy, Spain, the U.K. and the U.S.

That's a bit of a drag. But I'm sure they'll roll out more with time.

[zridling]

Google says the 10% only covers their cost, but they never tell you exactly how they come to that tidy figure. To me, that's yet another "Trust us, we're a corporation" statement. All together now:

The cut is (still) too damn high! 

[Renegade]

BS. There's NO way in Hell that their costs are 10% for a transaction. That's a flat out LIE.

[40hz]

Such are the realities of dealing with a closed software ecosystem.

And such is the high tariff some feel we should all be made to pay for what amounts to little more than convenience when shopping.

Fortunately, the solution is very simple.

If you don't want to live with: arbitrary policy and decision-making,  predatory business tactics, 'rules' based on (and changed at) whim, high nonnegotiable pricing, blatantly unfair and constantly rewritten licenses -  then stop doing business with companies that make no bones about the fact that's exactly what they're going to subject you to.

Your single, most effective response to a bad deal is to walk away.

[Renegade]

@40Hz - If only it were that simple...

[superboyac]

Such are the realities of dealing with a closed software ecosystem.

And such is the high tariff some feel we should all be made to pay for what amounts to little more than convenience when shopping.

Fortunately, the solution is very simple.

If you don't want to live with: arbitrary policy and decision-making,  predatory business tactics, 'rules' based on (and changed at) whim, high nonnegotiable pricing, blatantly unfair and constantly rewritten licenses -  then stop doing business with companies that make no bones about the fact that's exactly what they're going to subject you to.

Your single, most effective response to a bad deal is to walk away.

I truly think Apple is close to crossing some kind of line with their closed business model.  Apple has grown so much over the last two years, it's crazy.  Between the laptops, tablets, phones, they have grown their userbase by tons.  They just can't keep it this closed for too much longer.  i don't know, maybe they can.  But we're seeing...companies are not going to give 30% to Apple for subscriptions.  that sounds so insane.  I mean, if they end up all doing it, I'd be shocked.  That's too big of a cut.  So I'm predicting a lot of important companies will just resist it and their product won't be available on apple devices.  So then the userbase will complain, and because it's growing so much, those complaints will be hard to ignore, I imagine.  So Apple will have to lower their cut.  but what if they don't?  That's going to make more people either A) not want to use Apple devices or B) jailbreak their devices to do what they want.  Either way, it starts fragmenting Apples closed system.

[40hz]

@40Hz - If only it were that simple...

It's as simple as you let it be.  

Or is until your pacemaker becomes dependent on your owning an iPad.  

[superboyac]

@40Hz - If only it were that simple...

It's as simple as you let it be. 

Or is until your pacemaker becomes dependent on your owning an iPad. 

I would totally jailbreak my pacemaker and have it do some cool shit.

[40hz]

^ Exactly!  It worked for Ironman.

(Way to go Aram! )

[vlastimil]

30% is surely a lot and the conditions are pretty limiting. I have never developed anything for any Apple product, but I can imagine the disillusions some of the developers must feel.

On the other hand, the Apple store probably was a relatively easy source of money for many developers. Everything has its end.

Who knows, maybe Apple will lover their cut to 15% in a couple of days/weeks/months and everyone would happily pay that knowing that things could be worse. Maybe we do not see the whole picture yet.

[Deozaan]

Or is until your pacemaker becomes dependent on your owning an iPad. 

I would totally jailbreak my pacemaker and have it do some cool shit.

Then Apple would simply disable your iHeart and let you die.

Apple breaks iBooks for jailbreakers.