Support NeoGAF

[scorcho]

so some publishers/distributors could potentially factor the Apple tax into the price by adding a new subscription tier that also grants access specifically to iOS devices? i wonder if they could also grandfather current subscribers into that plan for an unlimited amount of time to keep their prices the same.

 

[delirium]

so some publishers/distributors could potentially factor the Apple tax into the price by adding a new subscription tier that also grants access specifically to iOS devices? i wonder if they could also grandfather current subscribers into that plan for an unlimited amount of time to keep their prices the same.

I don't think they can. The subscription rates must be the same (or better) when its offered in app (which is also mandatory).

 

[Tobor]

I don't think they can. The subscription rates must be the same (or better) when its offered in app (which is also mandatory).

No, he's right, that would work. An iOS specific suscription wouldn't violate the terms as written. How consumers would react to it is another matter.

So far we've seen two subscription(pop sci, and the daily), and they are both priced well. Publishers raising the price will face increased competiion from publishers who don't.

 

[Soybean]

so some publishers/distributors could potentially factor the Apple tax into the price by adding a new subscription tier that also grants access specifically to iOS devices? i wonder if they could also grandfather current subscribers into that plan for an unlimited amount of time to keep their prices the same.

I had this thought too. They could also offer the non-iOS subscription in-app (thus abiding by the rules for equal pricing), which naturally nobody would buy in-app.

 

[Blackhead]

No, he's right, that would work. An iOS specific suscription wouldn't violate the terms as written. How consumers would react to it is another matter.

So far we've seen two subscription(pop sci, and the daily), and they are both priced well. Publishers raising the price will face increased competiion from publishers who don't.

The Daily is iPad only and PopSci doesn't offer digital subscriptions anywhere else (so it's digital iPad only). Apple specifically said they want the same price "or lower" so if this is indeed a loophole to charge iOS users extra, I wouldn't bet against Apple closing it.

More fallout

Apple is actually asking for 100% of SaaS mobile revenue

This whole app store thing has me worried. Not just about Apple's policies effect content access, but regarding how they effect my business, the online software as a service (SaaS) business.

It appears to me that the new "give Apple 30% of revenue" policy will apply to software subscriptions just as well as it appears to content. Many companies that offer a web service provide a mobile client. They charge on the web, and customers can access their service via mobile if they wish. Its a free option.

But now it appears that that will not be acceptable to Apple. Because if you offer a subscription *anywhere* you have to offer it through in app purchasing as well. This seems crazy to me for a bunch of reasons.

As an example, it sounds to me like for SalesForce to continue to offer their service, they will need to give Apple 30% of their subscription revenue for all customers that want to access SalesForce via mobile. So if SalesForce charges $50 per seat per month (I don't really know what their prices are right now), Apple wants $15 per month. They want their 30% cut of *all* of the SalesForce revenue even though the mobile product only offers a fraction of the value that the customer is paying for.

Think about it this way. Would the customer really pay that $50 if all they got was the mobile product? Lets say that, on average, the mobile product is 30% of the value of the product. The other 70% is the web based product, access to customer support, backup services, etc. If this scenario is even roughly correct, then what Apple is doing is asking for 100% or near 100% (perhaps more or less) of the value of the mobile experience. This analysis applies to any multi-platform SaaS product.

Extracting 100% of the value of the mobile product is a total non-starter, and if Apple enforces their new policy against SaaS businesses, I think most of the multi-platform ones will leave because the economics just won't work. The thing is, because Apple has so capriciously changed their policy, effecting companies like Amazon, and companies like SalesForce that have made a significant investment iOS investment, one has to wonder whether building iPhone apps is safe even if they don't initially enforce this policy against them. Because they could. If you always have to worry whether the platform vendor is going to figure out a way to put you out of business or extort you, it just may not be worth the risk. Damn I feel like I am writing about the Gambinos!

I am particularly worried about this because my company is going to launch a new service in April and we are busily working on an iOS application and we can't really turn back now. The main reason we chose iPhone is because I have an iPhone and an iPad and because the iPad currently leads the tablet market. But I am now worried that we may have made the wrong choice and should have gone the Android way.

If this doesn't get cleared up or changed, there will still be plenty of games and and productivity tools for the iPhone, but new multi-platform SaaS application developers won't touch iOS with a 10 foot pole. And existing companies will pull their iPhone apps in droves.

Well one thing for sure, the Android team must be kvelling!

 

[Tobor]

The Daily is iPad only and PopSci doesn't offer digital subscriptions anywhere else (so it's digital iPad only). Apple specifically said they want the same price "or lower" so if this is indeed a loophole to charge iOS users extra, I wouldn't bet against Apple closing it.

As for The Daily, it's only iPad exclusive because there is no other device worth releasing it on. The iPad is currently the only game in town. Murdoch has been clear that as soon as there is a relevant competitor, The Daily will be there.

Regardless, why a publication is affordable is irrelevant to my previous point.

 

[scorcho]

I'm not sure if it's a loophole that needs to be closed if true. If prices were raised on third-party distributed content bought on iOS, that would make that same content on iTunes and iBooks the cheapest option, and where Apple still makes their 30% cut. They win regardless.

 

[kaching]

If Apple's in-app subscription mechanism were simply optional, I'd have no problem with it. Start small, build on its potential merits, show some flexibility in the fees charged. I'm sure some of the app/content providers primarily making their revenue from the iOS platform in the first place might actually favor the centralized subscription model. It's the all or nothing, now or never, one size-fits-all approach that's killing the concept. I realize that's typically Apple's MO so no big surprise, but every once in awhile they engage in a "hobby" and that's probably the way they should have handled this one as well.

 

[hyp]

sure it's a dick move by apple, but if it challenges the corporate status quo then more power to them. although there is big money involved, it really does sound like it's a good move for consumers, me. these companies will not ignore the app store despite the "dick" move and if they do, I still have way too much entertainment at my fingertips to handle. as a consumer i may lose out on some potential media but who fucking cares when there's a million and a half alternatives out there. iOS isn't the only player at the end of the day. can't deny apple has the biggest dick and loves to swing it around.

 

[Mrbob]

I'm trying to figure out how this is a good move for consumers? I only see two options at this point. First one is companies start pulling their apps from the itunes store. Second one is companies start increasing prices for everyone to compensate for the Apple tax. I don't like either option.

The 200 million number of itunes devices sounds nice, but in reality its a small part of a huge pie. Over 300 million PC devices are sold every year. So yeah you do the math and even with Apple's growth with iphone/itouch/ipad it is small by comparison.

 

[kaching]

But, MrBob, think of all those subscription forms you'll no longer have to fill out...every few months...or so...

 

[Technosteve]

Look I see this move in Apples part to better control the platform. Because I think there next iOS product will be cheaper then the current cost of ipad. I think we have to see how this plays out, if Netflix does not solicit new subscribers through it's app, and is only an streaming application then these new rules don't apply.

I think apple would love to kick off amazon barnes n noble and Sony off app store, just as PS3, Xbox and Nintendo do not have third party marketplaces on there devices. This a turn in maturity of the platform, apple has begun exert more control very surprised there isnt a very high platform liscence fee and a royality rate for large publishers.

Netflix Hulu twitter facebook either had to negotiate a price to be on the console platforms or was paid a price to be on the platforms.

Let the market decide.

 

[scorcho]

But, MrBob, think of all those subscription forms you'll no longer have to fill out...every few months...or so...

that's a nominal thing to accomplish on a computer. it makes subscribing on an iOS device a whole lot easier, but that's about it.

 

[giga]

Just make the cut 10% and be done with it blah.

 

[kaching]

that's a nominal thing to accomplish on a computer. it makes subscribing on an iOS device a whole lot easier, but that's about it.

Pro-tip on reading kaching's posts: three ellipsis in one sentence = almost certainly sarcasm.

On a separate note, interesting timing, Google:

http://googleblog.blogspot.com/2011/02/simple-way-for-publishers-to-manage.html

 

[Tobor]

Just make the cut 10% and be done with it blah.

Some variation of this is what's going to happen anyway(at least for the companies with leverage). This whole thing is posturing and negotiating, and nothing happens until June 30, which is the cut off date for existing apps according to All Things D.

So we'll get months of saber rattling and hand wringing followed by a whole bunch of deals.

 

[numble]

Some variation of this is what's going to happen anyway(at least for the companies with leverage). This whole thing is posturing and negotiating, and nothing happens until June 30, which is the cut off date for existing apps according to All Things D.

So we'll get months of saber rattling and hand wringing followed by a whole bunch of deals.

http://techcrunch.com/2011/02/15/apple-keelhauls-music-streaming-services/

That’s because they don’t have 30% margins to begin with, the labels and publishers take somewhere around $8 of the $10 subscription fee. We saw Rhapsody balk at Apple earlier today. On Wednesday morning, we hear, most of the online music streaming services will be issuing a joint statement condemning the policy.

Does Apple’s move violate antitrust laws? The Wall Street Journal seems to think probably not. Of course, if Apple now launches their own music streaming service, that may change. Apple will be the only company that doesn’t have to pay Apple’s 30% subscription fee, so they’ll be the only company that can offer a $10/month music streaming service without losing money on every user.

How does this all play out? We hear the music labels are torn between waging an all out legal war against Apple and just capitulating and lowering their fees enough to keep the streaming services in business.

The problem isn’t that Apple is asking for 30%. It’s that the apps can’t charge more to cover those costs. In the end Apple may get what they’re asking for, but if they do it will only be because the labels cave and because Android has gained so much market share that Apple may be able to effectively beat an antitrust action.

Looks like they will take multiple fronts:
1. Get Apple to not do this
2. Get Apple to lower the 30% rate
3. Get Apple to not require price matching
4. Developers pressure publishers to take lower cuts to make up for Apple's take
5. Lawsuit

 

[Blackhead]

http://techcrunch.com/2011/02/15/apple-keelhauls-music-streaming-services/

Looks like they will take multiple fronts:
1. Get Apple to not do this
2. Get Apple to lower the 30% rate
3. Get Apple to not require price matching
4. Developers pressure publishers to take lower cuts to make up for Apple's take
5. Lawsuit

6. Sign up for Apple's music and movie streaming subscription service launching this summer with iOS5.

 

[kaching]

Google's just announced competing One Pass program apparently lets publishers keep 90% of revenue and gives them ownership of the consumer data that gets submitted.

http://news.cnet.com/8301-17938_105-20032217-1.html?part=rss&subj=news&tag=2547-1_3-0-20

 

[Technosteve]

http://techcrunch.com/2011/02/15/apple-keelhauls-music-streaming-services/

Looks like they will take multiple fronts:
1. Get Apple to not do this
2. Get Apple to lower the 30% rate
3. Get Apple to not require price matching
4. Developers pressure publishers to take lower cuts to make up for Apple's take
5. Lawsuit

good points didn't think of it that way.

 

[hyp]

I'm trying to figure out how this is a good move for consumes? I only see two options at this point. First one is companies start pulling their apps from the itunes store. Second one is companies start increasing prices for everyone to compensate for the Apple tax. I don't like either option.

The 200 million number of itunes devices sounds nice, but in reality its a small part of a huge pie. Over 300 million PC devices are sold every year. So yeah you do the math and even with Apple's growth with iphone/itouch/ipad it is small by comparison.

true, but you gotta admit those 200 million love to spend money =]

 

[kame-sennin]

Predatory pricing is about selling below cost to discourage competitors and new entrants. The fact that you're requiring the big pockets of Apple to subsidize their books or B&N to be richer to create a hypothetical where they can subsidize as well to compete is precisely the problem that predatory pricing creates.

Neither of those things is required. The reason Amazon is taking a loss on ebooks is because publishers are afraid ebook sales will cannibalize their print business, which brings in higher margins. McMillan can of course afford to sell their books for $9.99, as they sell paperbacks at a much lower cost. But they fear that customers will get used to the low price and convenience of digital books and stop buying hardcovers, which have much higher margins. Their reaction to this is to keep ebook prices artificially high. In effect, old media publishers are actively destroying a market for their own product because it competes with other higher margin aspects of their business. In video games, Harmonix did the same thing when they saw that the Wii version of Rock Band sold the most. They raised the price from $50 to $60 to match the cost of the 360 and PS3 versions. It could also be argued that they were trying to push the userbase towards the PS3/360 altogether because those platforms have stronger DLC sales. What Amazon is doing is protecting the market from their own business partners, who fear and seek to marginalize it.

With regards to Barnes and Noble, you have completely misread the situation. B&N, I would assume, has more than enough money to succeed in the ebook market. I said that they have "conflicting interests", just as old media publishers do. If the ebook market were to cannibalize the print market, B&N would see a significant portion of their brick and mortar retail business go under. That's their core business, and they don't want to see it go up in flames. The ebook market is direct competition to B&N, and so their plan is to grab a piece of the ebook market to hopefully control it and prevent it from destroying their core business - or at worst, have something to fall back on should the core business fall.

What you don't understand about the ebook situation is that a lot of the players have financial interests that are not aligned with the success of digital distribution. While no company will intentionally sabotage their own product, companies whose products threaten to cannibalize each other will often dull one or another product's competitive edge. That's why Apple's iBook store is the only fair comparison to Kindle. Apple has no print business to protect and can thus aggressively pursue digital distribution. We saw that when Apple entered the digital music business, they attempted to do exactly what Amazon is doing. They mandated a reasonably low price for songs so that they new market could grow effectively. They did not take a loss because music publishers were more malleable and perhaps did not see digital distribution ending their core business as swiftly as it has (note, many record companies have since pushed back and raised the price of digital tracks). We know Apple can afford to charge less for ebooks, the only reason they aren't is to win the favor of print publishers who are terrified of the 'digital revolution'.

Amazon isn't using a "predatory pricing" strategy because they haven't priced anyone out of the market. All the players involved can match Amazon's prices. Many choose not to because there is a risk that they will be competing with other products that they sell (print books) which bring in higher margins. So it's not Amazon who is keeping the price artificially low, but publishers who are keeping the price artificially high in order to protect their print business.

 

[numble]

Neither of those things is required. The reason Amazon is taking a loss on ebooks is because publishers are afraid ebook sales will cannibalize their print business, which brings in higher margins. McMillan can of course afford to sell their books for $9.99, as they sell paperbacks at a much lower cost. But they fear that customers will get used to the low price and convenience of digital books and stop buying hardcovers, which have much higher margins. Their reaction to this is to keep ebook prices artificially high. In effect, old media publishers are actively destroying a market for their own product because it competes with other higher margin aspects of their business. In video games, Harmonix did the same thing when they saw that the Wii version of Rock Band sold the most. They raised the price from $50 to $60 to match the cost of the 360 and PS3 versions. It could also be argued that they were trying to push the userbase towards the PS3/360 altogether because those platforms have stronger DLC sales. What Amazon is doing is protecting the market from their own business partners, who fear and seek mot marginalize it.

With regards to Barnes and Noble, you have completely misread the situation. B&N, I would assume, has more than enough money to succeed in the ebook market. I said that they have "conflicting interests", just as old media publishers do. If the ebook market were to cannibalize the print market, B&N would see a significant portion of their brick and mortar retail business go under. That's their core business, and they don't want to see it go up in flames. The ebook market is direct competition to B&N, and so their plan is to grab a piece of it to hopefully control it and prevent it from destroying their core business.

What you don't understand about the ebook situation is that a lot of the players have financial interests that are not aligned with the success of digital distribution. While no company will actively sabotage their own product, companies whose products threaten to cannibalize each other will often dull one or another products competitive edge. That's why Apple's iBook store is the only fair comparison to Kindle. Apple has no print business to protect and can thus aggressively pursue digital distribution. They can obviously afford to charge less for ebooks, they only reason they aren't is to win the favor of print publishers who are terrified of the 'digital revolution'.

Amazon isn't using a "predatory pricing" strategy because they haven't priced anyone out of the market. All the players involved can match Amazon's prices. Many choose not to because there is a risk that they will be competing with other products that they sell (print books) which bring in higher margins. So it's not Amazon who is keeping the price artificially low, but publishers who are keeping the price artificially high in order to protect their print business.

End this discussion right now. You seem hell-bent on this off-topic discussion about Amazon's practices. My point was not to prove that Amazon definitively engaged in anticompetitive practices, but that they have too many practices themselves that have shades of anti-competition that bringing a anti-trust suit against Apple, by saying that Apple's new subscription policy has shades of anti-competition, is going to create more problems for Amazon's practices, since Apple can counter-claim with Amazon's practices. Whether or not they definitively get to anti-trust is a different matter entirely, but opening yourself up to those legal risks (and their concomitant legal fees) is a gamble for Amazon.

 

[Tobor]

Neither of those things is required. The reason Amazon is taking a loss on ebooks is because publishers are afraid ebook sales will cannibalize their print business, which brings in higher margins. McMillan can of course afford to sell their books for $9.99, as they sell paperbacks at a much lower cost. But they fear that customers will get used to the low price and convenience of digital books and stop buying hardcovers, which have much higher margins. Their reaction to this is to keep ebook prices artificially high. In effect, old media publishers are actively destroying a market for their own product because it competes with other higher margin aspects of their business. In video games, Harmonix did the same thing when they saw that the Wii version of Rock Band sold the most. They raised the price from $50 to $60 to match the cost of the 360 and PS3 versions. It could also be argued that they were trying to push the userbase towards the PS3/360 altogether because those platforms have stronger DLC sales. What Amazon is doing is protecting the market from their own business partners, who fear and seek to marginalize it.

With regards to Barnes and Noble, you have completely misread the situation. B&N, I would assume, has more than enough money to succeed in the ebook market. I said that they have "conflicting interests", just as old media publishers do. If the ebook market were to cannibalize the print market, B&N would see a significant portion of their brick and mortar retail business go under. That's their core business, and they don't want to see it go up in flames. The ebook market is direct competition to B&N, and so their plan is to grab a piece of the ebook market to hopefully control it and prevent it from destroying their core business - or at worst, have something to fall back on should the core business fall.

What you don't understand about the ebook situation is that a lot of the players have financial interests that are not aligned with the success of digital distribution. While no company will intentionally sabotage their own product, companies whose products threaten to cannibalize each other will often dull one or another product's competitive edge. That's why Apple's iBook store is the only fair comparison to Kindle. Apple has no print business to protect and can thus aggressively pursue digital distribution. We saw that when Apple entered the digital music business, they attempted to do exactly what Amazon is doing. They mandated a reasonably low price for songs so that they new market could grow effectively. They did not take a loss because music publishers were more malleable and perhaps did not see digital distribution ending their core business as swiftly as it has (note, many record companies have since pushed back and raised the price of digital tracks). We know Apple can afford to charge less for ebooks, the only reason they aren't is to win the favor of print publishers who are terrified of the 'digital revolution'.

Amazon isn't using a "predatory pricing" strategy because they haven't priced anyone out of the market. All the players involved can match Amazon's prices. Many choose not to because there is a risk that they will be competing with other products that they sell (print books) which bring in higher margins. So it's not Amazon who is keeping the price artificially low, but publishers who are keeping the price artificially high in order to protect their print business.

You realize your entire argument is over a year old and already proven false, right? Amazon yielded to the agency model a year ago, and the prices, while initially high, have fallen back down to an average of $10-$12. It's over, dude. Step out of the time machine.

 

[Zaraki_Kenpachi]

Steam is 60/40.

I don't mind for apps but to do it for everything someone sells especially with the thing on the this page is ridiculous. They shouldn't make 30% from amazon by me buying a kindle book on my phone/ipod touch, I think that is ridiculous. Steam is also footing a much bigger bill in bandwidth no?

You realize your entire argument is over a year old and already proven false, right? Amazon yielded to the agency model a year ago, and the prices, while initially high, have fallen back down to an average of $10-$12. It's over, dude. Step out of the time machine.

I wonder how much the bolding of it saying that the price was set by the publisher had to do with it also. They sort of made sure to separate themselves from the higher pricing.

 

[zou]

You realize your entire argument is over a year old and already proven false, right? Amazon yielded to the agency model a year ago, and the prices, while initially high, have fallen back down to an average of $10-$12. It's over, dude. Step out of the time machine.

Except for those titles that are more expensive than the print titles.

You're a hilarious character.

 

[Tobor]

Except for those titles that are more expensive than the print titles.

You're a hilarious character.

So you missed where I said average price?

 

[Soybean]

Netflix gets an exemption?

Netflix will not be affected by Apple's new subscription billing plan, we are hearing from a source.

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

That's basically all there is. Could be BS.

 

[rezuth]

Netflix gets an exemption?

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

That's basically all there is. Could be BS.

Why would it be affected? Don't you need to be a netflix costumer and then you get a login+password? In essence you are just logging in to a service, you are not buying one.

 

[Burger]

You couldn't ignore Hitler either (yes, I just willingly broke Godwin's Law)

Nice.

The modern smart phone comes from PalmOS, Apple just took it to consumers.

Come on, the iPhone was years ahead of what everyone else was doing, it was a major leap forward. The iPhone changed the phone business.

 

[Soybean]

Why would it be affected? Don't you need to be a netflix costumer and then you get a login+password? In essence you are just logging in to a service, you are not buying one.

This is what Steve Jobs said in the press release:

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.

 

[LCfiner]

Netflix gets an exemption?

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

That's basically all there is. Could be BS.

If true, that might be good news not only to netflix but perhaps for SaaS apps like Salesforce.

I think we (well, developers, anyway) are all still looking for Apple to clarify just what the hell it expects from all these various subscription based services that aren't magazines.

 

[kame-sennin]

You realize your entire argument is over a year old and already proven false, right? Amazon yielded to the agency model a year ago, and the prices, while initially high, have fallen back down to an average of $10-$12. It's over, dude. Step out of the time machine.

We're arguing over whether or not Amazon was engaging in "predatory pricing", which was a term people were throwing around in this thread. I understand that you probably did not dig through the thread to see how the debate started, but it's silly to jump into a discussion if you don't even know what people are debating. I have no problem with the agency model at all, and I'm glad prices have fallen. I would still argue that ebook prices are still too high and a lower price point would help to significantly grow the market. I think a lot of people view ebooks as too expensive for the value you get, especially compared to print books - which is probably just fine with print publishers.

End this discussion right now. You seem hell-bent on this off-topic discussion about Amazon's practices. My point was not to prove that Amazon definitively engaged in anticompetitive practices, but that they have too many practices themselves that have shades of anti-competition that bringing a anti-trust suit against Apple, by saying that Apple's new subscription policy has shades of anti-competition, is going to create more problems for Amazon's practices, since Apple can counter-claim with Amazon's practices. Whether or not they definitively get to anti-trust is a different matter entirely, but opening yourself up to those legal risks (and their concomitant legal fees) is a gamble for Amazon.

And I disagree with that, at least in regards to ebook pricing. If you don't want to debate that, that's fine. I don't want to drag this thread off-topic either, but I thought your predatory pricing claim was absurd. I still do. I'm perfectly fine leaving it at that for the sake of the thread.

 

[zou]

So you missed where I said average price?

So you missed your own point? The forced change negatively affected pricing. Your argument boils down "bu-bu-but it could have been worse".

 

[kame-sennin]

Netflix gets an exemption?

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

That's basically all there is. Could be BS.

So is Apple just playing favorites with the biggest publishers? Are they going to cut deals to prevent big draw companies from leaving the app store and only apply the new policy to smaller developers?

 

[Burger]

Google's just announced competing One Pass program apparently lets publishers keep 90% of revenue and gives them ownership of the consumer data that gets submitted.

http://news.cnet.com/8301-17938_105-20032217-1.html?part=rss&subj=news&tag=2547-1_3-0-20

That's undercutting Apple by a significant amount. Why are Google passing on your personal information to the seller though?

 

[kame-sennin]

Why are Google passing on your personal information to the seller though?

Because their business is advertising and advertising runs on consumer data.

 

[numble]

So is Apple just playing favorites with the biggest publishers? Are they going to cut deals to prevent big draw companies from leaving the app store and only apply the new policy to smaller developers?

Could have to do with the difference between a publisher and a reseller. The press release about subscriptions is all about what content publishers can do (they repeat publisher all over the press release, when they usually would have said "developers"). We'll see...

 

[kame-sennin]

Could have to do with the difference between a publisher and a reseller. The press release about subscriptions is all about what content publishers can do (they repeat publisher all over the press release, when they usually would have said "developers"). We'll see...

If that's the case then Amazon would be off the hook as well. I'm not sure why Apple would make that distinction, except that magazine publishers have far less tech expertise than the Amazons and Netflix's of the world, so it's easier to bend them over.

 

[kaching]

That's undercutting Apple by a significant amount. Why are Google passing on your personal information to the seller though?

That's what the CNET article reports, although I'm not actually seeing it on the onepass site itself. MG Siegler over at Techcrunch is reporting slightly different: 10% off the top but only a portion of customer data is given to the content provider, similar to Apple (email, zip code, etc.). So, not sure which is accurate at the moment.

 

[Tobor]

We're arguing over whether or not Amazon was engaging in "predatory pricing", which was a term people were throwing around in this thread. I understand that you probably did not dig through the thread to see how the debate started, but it's silly to jump into a discussion if you don't even know what people are debating. I have no problem with the agency model at all, and I'm glad prices have fallen. I would still argue that ebook prices are still too high and a lower price point would help to significantly grow the market. I think a lot of people view ebooks as too expensive for the value you get, especially compared to print books - which is probably just fine with print publishers.

Fair enough. I was responding to the parts of your argument where you stated the publishers were out to destroy the ebook market, which I think is proven false by the slide in overall pricing over the past year. The market is still expanding, and there is no data I can find to suggest the agency model has had any negative impact whatsoever.

 

[Burger]

That's what the CNET article reports, although I'm not actually seeing it on the onepass site itself. MG Siegler over at Techcrunch is reporting slightly different: 10% off the top but only a portion of customer data is given to the content provider, similar to Apple (email, zip code, etc.). So, not sure which is accurate at the moment.

Wait and see then... It would be nice if Apple was a little more straight up about their intentions.

 

[kame-sennin]

Fair enough. I was responding to the parts of your argument where you stated the publishers were out to destroy the ebook market, which I think is proven false by the slide in overall pricing over the past year. The market is still expanding, and there is no data I can find to suggest the agency model has had any negative impact whatsoever.

If I said "destroy the market" then I was being hyperbolic. What I should have said is that their best business - hardcover books - conflicts with their interest in the ebook market, which brings in much lower margins. This is causing the publishers to make poor decisions about ebook pricing (even if prices have fallen).

 

[LCfiner]

If I said "destroy the market" then I was being hyperbolic. What I should have said is that their best business - hardcover books - conflicts with their interest in the ebook market, which brings in much lower margins. This is causing the publishers to make poor decisions about ebook pricing (even if prices have fallen).

FWIW, I can totally agree with this.

 

[LuCkymoON]

The Daily is iPad only and PopSci doesn't offer digital subscriptions anywhere else (so it's digital iPad only). Apple specifically said they want the same price "or lower" so if this is indeed a loophole to charge iOS users extra, I wouldn't bet against Apple closing it.

More fallout

Apple is actually asking for 100% of SaaS mobile revenue

You can get a PopSci sub on the Nook for $2.99 /month

 

[Road]

6. Sign up for Apple's music and movie streaming subscription service launching this summer with iOS5.

http://www.billboard.biz/bbbiz/indu...ubscription-rules-could-kill-1005036412.story

The bigger question now is whether this is just Apple's way of taking a cut of a business it helps create by virtue of the iPhone platform's popularity, or is Apple knowingly kneecapping other streaming music services in preparation to launch its own streaming music service for the iPhone in the coming months?


Think about it: Competing music services have for years now been free to offer streaming music to iPhone users, basically giving Apple free market research data and at the same time priming the market by getting early adopters hooked on the experience. Then it comes along and changes the rules of the game, offers its own competing service, and cleans up on both ends -- either stealing away users of competing service by offering a cheaper and more integrated music service itself, or profiting off its competitors subscribers without having to pay the music licensing fees they are.

 

[Burger]

Whoops, replied to ancient post by accident....

 

[Blackhead]

Why Are You People Defending Apple?

As you’ve doubtless heard by now, yesterday Apple revealed its new fee structure for premium content: all apps that offer premium content outside of the App Store have to also offer it via Apple’s official in-app purchases (this includes Amazon’s Kindle) and Apple takes a 30% cut of all subscriptions. The response has predictably ranged from outrage to approval — my colleague MG Siegler did a thorough piece talking about why this makes sense for Apple and users, even if it may leave developers up in arms. But I’m still having a hard time swallowing it.

My reaction has been one of trepidation. I don’t like where this is headed, and I think that many who consider themselves technophiles are completely dropping the ball by rationalizing what Apple has done.

The first mistake people are making has been to focus on whether or not this move is Apple’s prerogative. Ignoring the rumored antitrust issues, I really don’t think it’s worth considering whether Apple has the right to impose a 30% fee on applications, any more than I question whether Monster Cable has the right to sell their HDMI cables at multi-thousand percent markups, or whether cell carriers have the right to charge exorbitant fees for text messages. But that doesn’t mean they aren’t being obscenely greedy.

Another flawed response is that Apple has the users’ interests at heart — after all, they’re restricting how much user information publishers can gather (and re-sell), and they’re making the in-app purchasing process as simple as possible. Which is great, but that doesn’t explain why Apple is demanding 30% of each purchase. In fact, that 30% cut could hurt users. Users benefit from ease-of-use, but they also benefit from competition. As it stands now, Amazon’s Kindle application will probably be handicapped or removed entirely from iOS, because Apple is effectively eliminating its margins. Which stinks, because the only real alternative — iBooks — is far inferior.

Yes, that’s right: Apple isn’t the best at everything. You can’t read an iBook on anything other than an iPad or iPhone, compared to Kindle which supports a half-dozen other platforms and the E-ink Kindle reader, which is a vastly better reading experience than any backlit display to boot. Oh, and users also stand to lose out on the pricing competition between the two eBook platforms.

Similar comparisons can be made for other services that could potentially compete with Apple’s products: music, movies, TV shows, and so on. I like being able to watch Netflix and Hulu from my iPad, but who knows if they’ll be able to operate now if they’re handing over 30% of subscription fees. Not to mention all the applications that Apple doesn’t compete with, but will get pushed out of the ecosystem anyway because of the 30% fee. How exactly are users winning here?

Another argument from Apple devotees: normal people don’t care about this change and will continue to eat up each new shiny Apple device. MG wrote a post yesterday that spent a lot of time talking about how users will vote with their wallets if they don’t like Apple’s policies (which probably isn’t going to happen). But this proves nothing. Normal people don’t care about a lot of important things — does that mean industry professionals and competitors and pundits should simply agree with the consensus (or lack thereof) of the masses? No.

And finally, there’s the related notion that anyone who doesn’t like Apple’s rules can pick up and move to another platform, like Android. Which is ridiculous. Android and iOS share many similarities, but they’re loaded with subtle (and not-so-subtle) UI differences that intimidate ‘normal’ people. Not to mention the fact that users have built up libraries of dozens of applications and DRM-laden content that won’t transfer between devices. This lock-in effect is only going to become more pronounced as Apple shifts content ownership to the cloud and has users stream the movies they ‘own’ from its own servers.

Which brings us to why I find all of this so alarming. Above all, I don’t like the precedents that Apple continues to set. The App Store has existed for less than three years, and Apple has been drastically changing the rules on the fly, ruining some businesses and hampering others. It took years to reveal its developer guidelines in the first place, and, even when it actually printed some guidelines, it’s continued to arbitrarily change how it’s enforcing them.

I don’t take issue with Apple demanding a small processing fee to handle credit card transactions, but 30% is too much, especially combined with the restriction that publishers can’t change their pricing to adjust to the tax. Not every business will be able to offset the decrease in margins with the increased purchase volume promised by one-click payments. And companies that are in the business of reselling premium content with fixed costs, like MOG or Amazon, don’t have many options.

The App Store isn’t a storefront in the way that Amazon.com or Walmart are — this isn’t just an extravagant affiliate fee. We’re talking about the primary method of app distribution for one of the most important computer operating systems, ever. iOS is still in its infancy, and is going to continue to permeate across Apple products: desktop PCs, laptops, televisions, and whatever else Cupertino cooks up. And as people grow up in households where iOS is computing, it’s going to become harder than ever to get them to switch to less restrictive platforms down the road. Even when, heaven forbid, Apple starts making products that simply aren’t as good as the competition, or publishers and developers try to move to a different platform.

I’m sure this post will invite a throng of Apple advocates to poke holes in my logic, pointing out that Apple should be able to reap the benefits of the userbase and infrastructure it’s spent years building out. So be it. Let’s hope some of these arguments do something to allay the sinking feeling I’ve got in my stomach as I imagine a world where a significant number of the world’s computer users are locked behind a 30% toll being enforced by one of the most monolithic companies around.

 

[hyp]

why defend any corporation? they all want our money and time.

 

[numble]

Comparison of subscription services:

http://www.appleinsider.com/print/1...ipad_vs_google_one_pass_vs_amazon_kindle.html