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back to article Steve Jobs unveils 30% subs model for ... everything

Apple finally unveiled the shape of its new subscription model for the App store today, confirming that it will force magazine and newspaper publishers to hand over 30 per cent of their cover price. Cupertino billed its take-it-or-leave-it T&Cs as "the same innovative digital subscription billing service that Apple recently …

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Hang on...

>when the publisher brings an existing or new subscriber to the app,

>the publisher keeps 100 per cent and Apple earns nothing...

So what they're *actually* saying is you can:

A) Use the iTunes infrastructure and pay 30% for the privilege

- OR -

B) Build your own payment/security/etc infrastructure and keep 100% yourself

I fail to see what the problem is with this - you can have it either way.

Your article seems to suggest that *only* A) is available.

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Terminator

Who cares about the infrastructure

It is the "fix it when it is broken" process which is what really interests content owners so that all the paid content does not suddenly end up as a torrent on Pirate Bay.

Apple has demonstrated to everyone that it will fix again and again and again jail-breaking holes and apply whatever stick and carrot it takes to keep its phones reasonably secure.

Want to try doing that with your app and infrastructure for 30% of the iTunes take? Unless you are someone the size of Viacom or News Corps your 30% will simply not go far enough.

So overall, this is actually a pretty good deal for a content publisher.

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Alas, not so

If only that were the case.

Apple now *require* publishers to offer an in-app single click option if there is an outside-app version, *and* publishers can't provide links to external locations where the outside-app version is *and* publishers can't offer better prices outside the app.

I wouldn't mind if we had equal opportunity to promote our own version, but I think few end-users will see the choice of 'click here' versus 'go to your web browser and type this address in, and then go through hoops' as being competitive; Apple now require us to cripple our outside app systems so the in-app version is far superior for the end-user.

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Only if you don't read the article...

...does it seem to suggest that "*only* A) is available".

If you use your brain, parse the sentences and comprehend the meaning behind the words then you'll see that the article states that "Publishers are still permitted to "leverage other methods for acquiring digital subscribers outside of the app," – ie, sell digital subscriptions on their website without having fork out cash to Apple"

I know that the internet appears to have caused everybody's brains to have dribbled out of their ears but, seriously, saying an article doesn't make something clear when it's written there in clear English beggars belief.

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tomorrows news

non appstore/itunes authentication code will be banned from appstore

come on... even a mactard should see that coming

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Choice between A) easy and B) hard is left to users

The problem is that users are likely to prefer buying from their shiny iThing. The easiest way to do that is to use iTunes, since the new T&C FORBID putting a link to the web site of the publisher to allow the customer to purchase content or subscriptions outside of the app.

The users can click twice and have the content through iTunes, or they can go hunt for the website of the publisher by hand. So practically every user will use iTunes, as they do not care who gets the money, and they want to have what they want, fast.

So basically, the publishers have to offer users the possibility of buying content in a much more easier way that makes them lose 30%. And they have to make the other possibility harder. I am not sure many publishers have a 30% margin they can give away like that...

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FAIL

tomorrow's news preview today

You can also get a glimpse in Apple's pronouncement and language that they will soon move to installing the App Store as the default method for software installation for Mac OS X. Over time, they will make it more and more difficult to install software on your own computer unless you go through the Apple app store.

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jai
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@Ian Wellock - Re: Alas, not so

"but I think few end-users will see the choice of 'click here' versus 'go to your web browser and type this address in, and then go through hoops' as being competitive"

No, end-users won't consider the competitive issue at all, we just want our content. We'll choose the easiest path to get it. If it's a single button click inside the app, that's perfect and a lot easier than mucking about on some website.

But also - if the only way to get the content is to go to your website and go through hoops, then we'll go get the content from another provider using their app that does allow for single click access, because that's a lot easier than the going through hoops.

Apple care more about the end users than they do about the publishers and that's just horrific isn't it?

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WTF?

@ jai

<quote>Apple care more about the end users than they do about the publishers and that's just horrific isn't it?</quote>

The ONLY thing relating to the 'end users' that Apple care about is their MONEY. Anyone who thinks different is a deluded iFucktard.

Wake up and smell what you are shovelling.

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Happy

@ Alex Rose

Your condescension is appreciated.

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no diff pricing outside the app?

>>>Apple now *require* publishers to offer an in-app single click option if there is an outside-app version, *and* publishers can't provide links to external locations where the outside-app version is *and* publishers can't offer better prices outside the app.<<<

Wow! Publishers are not allowed to offer better prices outside the app? That's new (it was allowed as far as known last week from what I read). That is a ludicrous requirement - I would expect in-app content to cost 42% more (to cover Apple's 30%) - otherwise, the publisher is going to lose money (and likely withdraw iOS support (bad for users and Apple)).

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Alan Denman

I'm left wondering what will happen to all of those convenient shopping apps.

With 30% Apple tax and then adding on another 20% VAT will mean 50% + in tax!

Shopping hell?

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Grenade

Credibility. Have you heard of it ?

"It's almost certainly going to be too much for Amazon, who may discontinue their iOS Kindle app"

huh ? Amazon already provides their own payment platform. Do you have a source for this, is it pure provocative invention (as usual) ?

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Joke

There is a tune for that

Money for Nothing by Dire Straits!

Would Apple change their mind (and the T&Cs) if almost every single book and magazine provider suddenly pulls out of the Apple App store? Publishers, rise up and unite... no wait... :(

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Flame

A "good" idea

This is actually a good idea. If all the providors of content leave the Apple platform, it won't be as attractive to consumers.

The people will go to where things work - ironically the iPhone is the proof. Mnay consumers wouldn't have bought an iPhone if it hadn't been innovative and the best at the time. There's plenty else out there in the marketplace now.

Don't get me wrong, there will always be Fanbois out there who'll buy any old shit. But would Apple rather have 100 million users, or 50 million users????

My next phone won't be another iPhone even although I like some of the features.

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Dear Publishers,

Think very, very carefully before you embrace that shiny new appley world. Have a look at iTunes and wonder if the major music publishers ever regret handing control of digital distribution over to Mr. Jobs.

Then build a decent website and keep your 30%.

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Coat

Innovative? Me thinks not

According to most dictionaries:

Innovate - to introduce something new; make changes in anything established

Innovative - using or showing new methods, ideas, etc.

According to Steve Jobs:

Innovate - we will screw you and there is nothing you can do about it!

Yes, the media only have themselves to blame for perpetuating their dinosaurus models.

Mines the one with the new innovative contract in the pocket.

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Not as bad as I'd feared

I have a Direct Debit subscription to The Economist. Thankfully the T&Cs mean that I will continue to be able to use the app but still be able to pay directly to The Economist so that they get all the money.

I would hate to lose the Economist app but I would stop using it instantly if I was forced to pay through iTunes such that all of the subscription fee did not go to The Economist.

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How cunning and devious...

This, to me, looks like Apple's attempt to corner the market. Line up the largest and most promising content providers first, and then charge a horrendously high premium so as to *ock bl*ck the other news-media pad devices. At 30%, these publishers most likely will be unable to afford to spend resources developing content appearance for other devices (formatting, labor, time, security, subscriptions...)

Alternatively, the publishers might higher subscription rates on other to attempt to make up for Apple's long-part-milling-machine effect on them...

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Yes, that's exactly how capitalism works

I'm pretty sure British Gas will soon be putting their gas prices up until they are 1000 times higher than their competitors, then their customers won't be able to afford to look for an alternative supplier.

Not an exact analogy I know, but for the love of god can you people not use your brains before posting this drivel?

You seriously suspect that Apple putting its prices high will DIScourage content providers from seeking an alternative distribution method? By that logic Apple should be charging at least 100%, then no one else will be able to get a look in. In fact why don't they charge 200%, they'll be sure to be left as the only game in town if they do that!

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Idiot

Alex Rose - you are an idiot! What he is saying is that content providers will not be able to afford to redesign their content for other platforms if Apple take 30%, not that Apples high charge will discourage them from looking for different platforms!

And British Gas are a completely different kind of business so you can't use them as an analogy, unless you are talking about them creating an App that allows you to see your gas/electric usage!

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Joke

Living Marxism

Is that like "History Today" - the only interesting thing when I were dreaming through the delights of Sutton Hoo in history lessons...

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Happy

History Today?

Is that the one that goes along the lines of-

"Professor, do you see that pile of dog poo?"

"I am aware of it."

"That's your iPad case, that is."

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Anonymous Coward

Even if the had their own

Even if the had their own system, my understanding is that Apple would still want 30% before allowing content purchased through another system to be viewed on an iTunes device.

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kindle may still work

-amazon will have the billing and auth services, and even if apple want 30% of all in-app purchases, there's nothing to stop you browsing over to amazon.com in safari, logging in and buying some kindle books there, books that could trickle over.

That said, Mr J probably views all customers who buy stuff online on one of his browsers as something he deserves a commission on. How every AOLy

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Jobs Horns

Missing the point

If Amazon do this, they are required to charge no more on their own site than they do on the Apple Store. So a £10 sale on Amazon.co* is £10 to Amazon, but the same £10 sale on the Apple Store is £7 to Amazon and £3 to Das Apfelreich. Sure, there's nothing stopping you browsing over to Amazon to buy other than laziness - but people like convenience and to the customer it's the same price wherever they go, so why would they bother? There's no reason to do it unless you want to deny Apple your money, and if you wanted to do that you wouldn't have bought an iPhone in the first place.

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^^ Plus 1 ^^

Simply for the use of the phrase "Das Apfelreich"

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Troll

Fanbois...

...Assemble!

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Jobs Horns

Does that mean 30% and no questions asked about content?

Or 30% if it passes Jobs' board of censors.

I think I know the answer... Monopoly on payment and content can't be good.

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Dead Vulture

our-way-AND-the-highway deal

just fixed that for you.

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where is the uproar when a magazine stand takes it's cut?

where is the uproar when a magazine stand takes it's cut?

it is just amazing that people aren't up in arms that a magazine retail store is taking it's cut, or the guy with a push cart selling papers on the street takes his cut...

are people really that naive? let's get a life out there....

these newspapers want to charge the same price, even though they have no printing costs, WHICH IS A HUGE SAVINGS..... let the person hawking your magazine or newspaper take their cut... geesh...

what's next? a lynch mob for the paper boy?

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Bad analogy

A newspaper stand has to compete with the big shop down the road and the newsagent across the street. They have to remain competitive by charging as low as possible whilst still retaining a profit.

You're also forgetting the major problem for publishers here: they lose a market signal. They are no longer able to accurately measure their subscription audience composition, which means their advertising revenue will be hit as they are no longer able to accurately describe the market segment they cater to and will no longer be able to adjust their content to the segments they want to cater to, which means that they'll lose market share, and hence even more revenue. They stand to lose a fortune. This is not like the news stand, which is frankly a sideshow for most publications where they make extra money on top of their subscriber base. This is apple attempting to insert itself between subscribers and the publisher in order to control the flow if information between the two.

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FAIL

you do realize magazines cost more on newstands?

and you keep the news stand markup when you subscribe directly??? how would your point even be relevant here?http://www.theregister.co.uk/Design/graphics/icons/comment/fail_32.png

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@honkj

Actually, you need to take your analogy a step further. The billing should be done by the carriers, who take a small share (e.g. the magazine stand landlord who HANDS YOU your magazine), who then pass on a bit to the publishers (who provide him the content)?

So where is Apple in this? Well I guess Apple with their App store performs one of many roles analogous to a magazine stand: signage, advertising, packaging etc. and should also get a share from the magazine stand owner. The point is that the START of the value chain should not be Apple, but the point of delivery. After all Apple DON'T create the content (media house) NOR deliver it to you (operator). When was the last time you paid the advertiser for your magazine? The only role of the APP Store is a pretty shop front - and without the operators one which cannot even be visited or deliver.

* Note the contrast of the Apple business model already emerging in HP's announcements and the Nokia/MS tie up of 'carrier billing'. Apple are slowly coming under attack from the operators finding friends in other places and now they are planning to p1ss off their suppliers too?

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FAIL

Ugh...

Do you think most magazine stands get a 30% profit of the cover price?

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@Graham Dawson

Of course, the side effect of this is that apple will be in the perfect position to accurately describe market segments, for all those who bought this subscription, or that one. That will be worth a lot to them for the advert revenue alone.

Remember that ad company that apple bought not so long ago...?

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Badgers

Why so negative?

Why are you being so harsh to apple about this model? I was highly negative of this myself initially, but only because I got the impression that publisher would be forced to do everything through apple. Now it seems that publishers have the choice to still sell through their own channels and take the full price. So newspapers are still able to give their (hardcopy) subscribers access to the digital version without paying Apple, and can still maintain a record of their subscribers (as long as they are not subscribed through Apple).

I think that takes most of the sting out of the subscription plan.

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FAIL

Why would anyone do business with this cabal?

As I posted just earlier today (on a article relating to Apple's human abuses in China)

"The point is Apple will continue to abuse their employees, foreign partner workers and THEIR CUSTOMERS as much as they can get away with it."

oops, I obviously forgot their domestic business partners as well....

"The point is Apple will continue to abuse ANYONE as much as they can get away with it."

There all fixed now....

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Happy

"A surprisingly attractive Trotskyite"

In turtleneck sweaters?

"Belgian regulators have already been sniffing around Apple's subs plan. Now they'll be able to get stuck in proper."

They should not. Let's see what "the market" will do for once. "Sniffing around" just builds the Bruxelles Bureaucracy. Don't feed the cancer!

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I think Kindle is already compliant

The fact that Kindle brings up a Safari session on the iOS device might be a bit dodgy in Apple's eyes but there's a simple solution to that: New Kindle app where the user must sign in once for unlimited whisper sync healthy goodness (and users can still load Safari themselves and go to the Amazon website).

I'm sure Sony could do the same. Incidentally though, both Amazon and Sony may still end up victims of Apple's selectiveness when it comes to applying (and indeed making up) the rules. I suspect eventually, there's a day in court for that (and both Amazon and Sony which end of the lawyer to point at Apple if need be).

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Anti trust investigation?

One can be but moments away somewhere or other in the world.

Charging a percentage is a bit dum, smacks of profiteering, and is surely designed to allow Apple to corner the market for itself. I would be mightly surprised if Apple charged themselves 30% for their own content distribution.

If they had set a flat rate then it would be easier to believe that they're merely out to recover costs + plus a small margin.

Having said that, my previous experience with on line subscribing to a newspaper's home brewed paid content was deeply unsatisfactory. It smacked of a bunch of amateurs not caring that they had your money but were failing to deliver on their contractural promises. Apple will probably do a much better job than that.

But I doubt that Apple appreciate just how popular Amazon's Kindle is becoming. Everyone I know has one / is going to get one. I know one person with an iPad. The content providers will soon start noticing and wondering whether Amazon are going to screw them as much as Apple are. With colour e-readers (capable of full video too!) just round the corner I think that iSomethings are going to start looking mighty expensive and rubbish for written content.

On the topic of Kindles, their success just goes to show how important getting the content provision right is. Sony have had an e-reader out for ages, didn't do so well because there was no substantial source for books. Amazon got it right; everyone knows that Amazon sells books, so it was no surprise to anyone that they could sell e-reader books too. Sony should have got in to bed with Amazon years ago. Too late now!

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FAIL

where are the fanboi defence force?

In the run up to this non surprise the fanboi where out in force preaching how it wasnt going to be this.

And lo and behold it came to pass that it was going to be this.

Come on Michael and Sean and all the rest of the apologists lets here you spin this one!

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Why bother?

As soon as there's an article on Apple you all dive in saying how they're evil and doomed no matter what the facts of the article are.

I'm neither a fanboy or a hatergirl and so I'm unwilling to debate with either polarised camp. It's like the Daily Mail of IT with everyone who doesn't have a rooted Android phone dismissed as a fanboy regardless of their argument.

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This is big Steve.

He's very worried about your business model. he is so worried that, in return for 30% of all takings, he will protect you from teams of rabid lawyers and corporate bribery.

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Flame

Hmm

I'm going to be controversial here.

So, a publisher can do their own thing and earn the 'extra' 30% themselves. Great and all, but that assumes that they won't spend at least the equivalent on their own infrastructure. If you don't already have the infrastructure to handle that kind of billing, with the support systems in place, with regulatory compliance etc. etc. you may well find you spend more than 30% on such.

And in plenty of cases, 70% of the revenue going to the publisher is actually higher than in other media...

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Unhappy

My issue with this ...

That's almost true, except that Apple will REJECT your App if you do your own thing in competition with Apple's payment method.

You CANNOT have secure payment pages within your app or link to them outside the app. That's nuts. And you cannot install your app on a device without approval.

It's an apparent conflict, in my opinion. I think it'd be fine to give the users a choice, but the choice is so slanted that it's not really fair to the users at all.

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Jobs Horns

Sooo...

"...when Apple brings a new subscriber to the app, Apple earns a 30 per cent share...."

So Apple is promising content producers how much advertising for this 30 percent share?

Providing a purchasing mechanism is as much "bringing a new subscriber" in as providing a bicycle is "transporting you across the country."

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