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back to article Apple 'greed' tax spreads beyond music, movies, magazines

Apple's recently enacted "give us 30 per cent of your subscription revenue" dictum is metastasizing beyond online magazines, newspapers, music services, and video apps, ensnaring at least one software-as-a-service app as well. Steve Jobs' App Store police have rejected the iOS version of Readability – an online service that …

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WTF?

So let's see...

Readbility are pissed because Apple want a 30% cut of their revenue, and say it makes their business model impracticable. Their business model being... to take a 30% cut of the subscription fee people pay to read the content served up by Readability...?

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Alert

Point being?

That's their busines model.

Apple's business model appears to be gravitating towards take as much as you can get.

The problem here isn't just the fee, it's the fact that they won't let you create an app which accesses a subscription service, without offering the subscription through In-App purchasing.

Which is sort of a faux pas, since it's not really an "offer" if you're also not allowed to tell the person using the app that they can also sign up on their website. You may not link to an external subscription link from within your app, and you may not offer an external subscription for a rate cheaper than the iPhone In-App purchasing subscription: so say goodbye to any marketing promotions with, say, anyone other than Apple.

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Troll

umm

delicious irony.

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title

This reply is really to all the Apple apologists who, deliberately or not are completely ignoring the point.

Nobody is complaining if Apple want to charge 30% for subscriptions via the App Store. It is the fact that Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else.

Please tell me how that can possibly be good for consumers or any business other than Apple.

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Jobs Horns

Readability Offer Something - Apple Don't

For their 30%, Readability's app is taking the subscription and changing the content (stripping the ads)

Apple is providing nothing - Readability already has a proven subscription system, they don't need Apple's, but Apple is forcing them to make it the only obvious method of payment..

Imagine if the government put a £30 toll on every motorway, then removed *ALL* roadsigns that didn't send you down the motorway. Towns are also banned from erecting their own signs pointing down the "A" roads. Many people would drive down the motorway without knowing the alternatives. Yes, you could go out and by a SatNav to find the alternative routes, but why should you when there are proven simple signs.

I am Apple of Borg. You will be assimilated.

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You are so right...

Making margin on product you sell in a store is a normal part of business, and 30% is not quite the sweet spot, but it's where it should be.

In addition to that, I don't want to share my info with Readability or anyone else. I prefer Apple asking me whether I want to share that information, and indeed, processing my purchases.

These guys are as short sighted as can be, and they will soon realize that someone else will find a way to effectively monetize what they were doing.

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Of course they won't....

Apple, in case you hadn't noticed, bases everything they make on what the end-user experience will be. This new process refines that experience, and keeps it consistent. I don't want to go to some extraneously anonymous website while on my iPad or iPhone to make a purchase. I want to do it through my account, as that is where I am "shopping". Get it?

And as far as their rule about not letting you offer it in the App store if you are offering it cheaper elsewhere, they are doing that because developers would simply find a way to direct customers to their website to make these purchases intended to be consumed on the iPad or iPhone, to circumvent the process. Brilliant actually.

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FFS - no title required

you don't need to pay for this 'serivce' it's not even a service, it's simple button (online version) which strips ads and menus and so on. so it's not pure service at all. 'reader' link in safari does the same (it's built on these guys' work) so yeah, they're asking fiver per month for a button (which any web developer can create).

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how is this

different to any standard rules in the business? for example amazon market place? exactly the same rules

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Jobs Horns

Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else

^ This.

I once said I was platform agnostic. For example, I would and currently do use a mac. Nevertheless, I have so far refused to buy an iPhone because of Jobsian restrictions.

This new move by Apple however is seriously making me reconsider my current use of macintoshes.

Stevo, don't be such a greedy shit. I mean... to what end?

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WTF?

Mr 'makemineamac'

aka 'makemineanextralargekoolade'.

Wow. Just wow...

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@sT0rNG b4R3 duRID:

"Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else"

Your post would make sense if the line you'd quoted were actually true. It isn't. Apple's rules only demand that you must *ALSO* support the App Store method of payment, not JUST your own web-store one. You also cannot undercut the App Store pricing on your own site. Which makes sense given that Apple are taking care of the bandwidth and hosting issues for you with the App Store itself. (They're already fronting up those costs for freebie apps as it is. Good luck trying to get Digital River to do likewise. Even C|NET's Download.com charges for hosting now!)

Note that this means Readability merely have to support the same price through their website as they charge through the App Store method. This is nowhere near the end of the world that Readability are complaining about. They could simply bump up their prices via BOTH methods. Or they could reduce their *existing* 30% slice. (Oh, I'm sorry, did you miss that part? Readability has *EXACTLY THE SAME PRICING MODEL AS APPLE!* Hypocrites, much?)

That some of Readability's source code ended up in Safari is irrelevant. Apple aren't breaking any rules by including it. That's kind of the *point* of those licenses, after all. Whining about someone using your *freely available and licensed work* on the grounds that you disagree with some of their *other* policies is just hypocritical. Either you *willingly* gave your code to the wider software development community (of which Apple is certainly a member, what with having given away plenty of their own code in the form of WebKit and Darwin), or you didn't. Which is it?

Of course, Readability could always jump ship to Android. Apple won't care.

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@makemineamac

You are a pretty anti-social individual ...!

The net effect of this is that publishers take a 30% cut in revenues ... or raise the prices 30% to cover this. Now I doubt many publishers can do the former given the cellar pricing of digital content, which leaves only the latter / RAISE prices for everybody by 30%.

So what you are really supporting is paying 30% more for ALL YOUR purchases through Apple AND that EVERYBODY ELSE must pay 30% more elsewhere too? All so you can entrust your details only to your beloved Apple who will never do anything wrong with them? Excuse me if don't see why everybody else should be paying more just so Apple's sheeple can live in an only Apple world! The very definition of arrogance for a company who has at best 16% of the entire internet connected market globally!

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WTF?

Ummm....

He said:

"Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else"

And then you said:

"Apple's rules only demand that you must *ALSO* support the App Store method of payment, not JUST your own web-store one. You also cannot undercut the App Store pricing on your own site."

Methinks you just confirmed what he said using different words. And did you just now say that they could 'reduce' their profit so as to make up the loss on the Apple tax? If their profit is 30% and they need to pay a 30% tax....ummm....they get nothing?

And please don't bash people with webkit and darwin. Webkit is cool but considering the quality of the browsers that use it Apple is the least responsible for it's success and darwin is flop as a FOSS project, pretty much nobody uses it besides Apple.

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Actually ...

... If you were to pass on the costs of this to the consumer, the price increase would be 43%.

1/*(1-0.3) = 1.42857 ~ 43%.

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Title

Sean Baggaley...

You are one of the most prolific of Apple apologists on the Reg comments board but you do at least normally make a coherent, if somewhat puzzling case for Apple's behaviour. So please answer my original question...

The statement quoted *is* true. If you want to sell a subscription that works with an iOS app, you must use the App Store and you cannot make it cheaper anywhere else. That does not mean you are *only* allowed to use the App Store since if that were the case the second part of that sentence would be redundant , wouldn't it? Just to be absolutely clear, let's rephrase it as "you must enable the App Store subscription function" instead so there's absolutely no "confusion".

Please tell me how such an arrangement can be to the benefit of anyone other than Apple.

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Soooo...

while I'm not sure how much I actually support the idea of taking 30% of subscription services, I have to say there's a lot of fuss about nothing here.

1) It is a GOOD thing for consumers to have one point of access for buying things and makes it a safer shopping experience. You could say that you only buy things off of websites you trust, but I think there is a legitimate concern with that, which should be blatantly clear to anyone involved in IT.

2) If it's too much for you then don't bother. If you can't support that 30% then write your app for something else, if it's good enough it'll still sell. The main problem seems to be that they want the visibility of the app store but don't want to have to pay 30% of their income to Apple. If their profits don't support it they need to either raise the price or stop. Whining about it probably won't change Apple's mind.

3) Complaining about Apple using source that they released for free seems a bit rich. Considering it would be completely different departments anyway...well.

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Jobs Horns

Consumers shouldn't turn a blind eye

No fangirl, I'll complain to the justice department and support anti trust action to force allowing an alternate market. This is stupid, if microsoft forced you to buy all software for windows from best buy this would be a no brainer.

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Your analogy...

Is very apropos. I used to harp and rail about how evil msoft was/is/was, but now apple is trying to be rotten to the CORE...

But, what i think this is really about is apple may be running out of steam in cranking out fondlephones and wants to bolster the uuber chic design lab with money squeezed out of every isomething. Imagine if automobile manufacturers decided they wanted/needed more than just the dealership's payup and any warranty kickbacks...imagine if Honda or GM or Toyota schemed (separately or in collusion) to REQUIRE dealerships to go away, and for consumers to permanently tie their vehicle purchase, gas, and carpooling/car-sharing expenses directly to the dealer.

If ifondledevices reach a saturation point, then the revenue stream will dwindle. So, apple are squeezing money out of a fondleturnip.

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@Shakje

"The main problem seems to be that they want the visibility of the app store but don't want to have to pay 30% of their income to Apple."

No, they don't want the visibility of the App Store. The problem is that they MUST use the app store in order to distribute their app the first place. So no, no App Store envy. Unless Apple allows other methods to get apps on their devices? Don't mention Jailbreaking, because then you'd just be proving a point.

"If you can't support that 30% then write your app for something else"

Yes, they likely will just jump the sinking ship and go with Android. However, the problem we face isn't just having to pay the Tax. It's a monopoly. In dealing with foreign and domestic products, countries place import taxes and such on foreign goods to ensure domestic (read: Apple) products sell better/make money as opposed to "cheaper" foreign (read: competitor) products. You must consider Apple now has a music store, book store, and newspaper. It's rumored that they'll have a music subscription service. Do all of these services have to inflate the prices or lose profit margin due to the tax? Nope. So, get The Daily for $5/mo or get New York Times for $6.50/mo. The Store-Brand Principle would show people will buy the cheaper "similar" alternative when presented with both. This 30% hike is a way to drive higher sales to their home-brew services, but also gouge a cut off people that still use the alternatives. Apple is using their market control to gain more revenue. Sound like monopolistic practices? Yeah, I thought so too.

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Antisocial? Really?

Mr. Registerthis:

How often do you go to a store and pay for your purchases at another location?

If you went to a Tesco, and were told you had to go down the street to pay for your purchases, would that make sense to you? Would it?

Didn't think so.

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Because iTunes is so much more secure than anyone else's payment system

Shakje spake:

"1) It is a GOOD thing for consumers to have one point of access for buying things and makes it a safer shopping experience. You could say that you only buy things off of websites you trust, but I think there is a legitimate concern with that, which should be blatantly clear to anyone involved in IT."

You miss the stories about buying stolen iTunes accounts, or the mother who's kid spunked over a grand on In-App purchases?

Philosophical discussion on the ignorance of naive mothers and chinese hackers aside, the fact is when it comes down to it, people should be allowed to CHOOSE who holds their personal details. And there's a certain savvy that anyone here should know about not putting all your eggs (or Apples) into the same basket.

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I don't think so

'You also cannot undercut the App Store pricing on your own site. Which makes sense given that Apple are taking care of the bandwidth and hosting issues for you with the App Store itself.'

Actually after the initial purchase there is absolutely no need for you to touch Apple's servers when downloading other content. The hosting cost of the app should have been absorbed in the initial purchase cost.

Apple are making the likes of RyanAir and thetrainline.com with their 'booking charges' and 'credit card fees' look reasonable.

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@makemineamac Re: "Antisocial? Really? "

ok ... sorry ... not antisocial ... just dumb ... or at best obtuse!

For your sake I truly hope that Apple get's their way, that you get to pay for everything at Apple (since you only want to shop there) ... and that you can afford to pay 30% more for everything.

And don't whinge when it gets expensive and you go shopping for the same content elsewhere only to find it costs 30% more too ... because you wanted this!

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All take, no give ...

That's what Apple has become. Wasn't always that way. Who would have thunk it? I notice, however, there *is* a backlash starting.

Fuck them, their app store and the horse they rode in on.

They're power-crazed, greedy bastards happy to take and make profitable use of other people's stuff for free, sell it at vastly inflated prices and make out they're innovative.

Microsoft pales in comparison.

Neither of them will be anything but historical footnotes in twenty years time.

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Silver badge

The backlash started in 2003

The difference is that Apple have now made it impossible for others to defend them convincingly. The new charge on subscription services means that the costs of being in the ecosystem now outweigh the benefits for many major companies that you've heard of.

If competition regulators are able to do anything here (which seems unlikely) then it could be the first time they've intervened effectively to save a company's business model.

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Hahaha...

"Fuck them, their app store and the horse they rode in on."

Reminds me of "Caligula" and "Equus"... Munge those two movies with Apple and all sorts of vivid and lurid imagery arise... Calappgula and Equustore come to mind...

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Anonymous Coward

Deeply ironic

As John Gruber points out, isn't there something deeply ironic about someone who takes a 30% cut from the revenue he generates from the creators of that content complaining about someone taking a 30% cut from the revenue they generate from the content he provides (which isn't his to begin with)? Why yes, yes there is.

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Anonymous Coward

seems fair enough to me...

...they have a service that gives consumers an ad-free reading experience and replace advertising revenue with subscription revenue for the content creators - in principle it makes sense but I wouldn't pass comment on the fairness of the split because I have no idea how much a view of an ad pays these days, nor how much it costs to run an operation like Readability.

I'm sure that there are plenty app developers and consumers that like the convenience of the app store model - it has a lot to recommend it if you trust Apple - but there seem to be a lot of cases where consumers and developers are poorly served by it, particularly where it disrupts a business model based around a price point and margin (for developers) or increased cost to consumers because Apple insist on a process where paying their margin is largely unavoidable.

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Jobsian Greed

Oh, is it not amazing how things have changed? Apple has always been many things to the media, but never "greedy". What company isn't greedy? That is their purpose for existence, right? Oh, but Apple has never gored publisher's ox before now? How about the music business? Greedy bastards all, I'd say. It is their "causis belli" as it twere Stack up another one for Apple for now. Ubuntu is starting to look better and better, isn't it?

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Ah yes, Ubuntu.

Owned by Canonical - who recently asked for 75% of the take on an Online Music Store that's offered via Banshee.

If you form a company/corporation you become subject to fiduciary requirements that require that decency, morality and reason be sacrificed in the name of as much profit now as possible, at the cost of all other considerations. Failure to pursue said fiduciary duty leaves one open to legal action and the loss of employment.

This is why the only time Corporations will ever change their behaviour is when the law is changed.

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Anonymous Coward

Stinking filthy pot calling the kettle black

Let's recap:

Readability takes 30% of subscription money for themselves for running a script that skims (removing the original source of income) other websites without their approval. The other 70% are kept in a savings pool until those websites decide to register for this service they never asked for (so they might never sign up, there's no notice being given apart from client logs)

Apple takes 30% of the subscription money for themselves for handling payments and offering the whole App store environment. The other 70% are guaranteed to quickly move go to to the company providing the service.

Who's really being the most greedy in this scenario?

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Haha, no.

"Readability takes 30% of subscription money for themselves for running a script that skims other websites"

Well, Readability is ALSO offered as a free, run-yourself "scriptlet" (yuck, scriptlet. Perhaps the ugliest neologism ever).

Only, guess what? They cannot peddle that to the iHappy crowd, as it is *shock* *horror* interpreted code.

So they have to run the script themselves, which means server space and bandwidth and computer power. That costs money (plus, they DO send money to the content providers, don't they?).

So yes, they charge for something that you could have for free. But that's because Apple's stance makes it impossible to have the free Readability in the first place.

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Anonymous Coward

I sat in a meeting today

and watched a multi million pound turnover UK company can its almost complete iOS apps thanks to this clause.

Its not the first one this week either.

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WTF?

I, too, sat in a meeting today

and watched a multi million pound turnover UK company drool over all the new subscribers they are going to be able to reach thanks to this clause.

Its not the first one this week either.

We can all make up stories to justify our prejudices.

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Grenade

A question

How, I wonder, did the "multi million pound turnover UK company" make its profit in the first place?

I'm guessing it *wasn't* by having the chops to create a seamless and frictionless content marketplace and payment system, but then letting people set up shop in it without collecting a fee to pay for all the time and effort and innovation that went into one of the smoothest online buying experiences *anywhere* and which just about everyone is attempting to copy because they know it works and that customers like it.

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FAIL

Jury is still out.

The jury is still out with In-App-Purchase as a content market. Customers were pretty much luke warm with the newspapers and magazine apps (Conde Nast, Sports Illustrated etc.) which presaged the new subscription content rules.

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Anonymous Coward

An answer

That would be by being the market leader in what they do.

By having the "chops" to grow and develop a product portfolio and service level regarded as the highest in there sector.

And by adopting technology along the way to make the service as smooth as possible.

Its probably also down to having the business sense not to waste money on projects that will lose money with every purchase.

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Anonymous Coward

fundamental difference is

I did sit in the meeting today and listen to the client can the project.

You seem like many of the other know nothing no it alls to equate ownership of an idevice to be the portal to purchase all other goods as if those brands had no presence before Apple came along with iPhones.

Bottom line is that when your the largest in your sector you dont need an app with IAP, your clients want your products anyway, they have many other ways to pay which dont add 30% to your cost base plus the cost of app development.

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yeah, but 30%???

It's perfectly reasonable for Apple to want to charge a fee for using their 'wonderful' on-line payment system. But 30%? Do Paypal charge 30% to process a payment? No. Do Visa/mastercard etc charge 30%? No. Do some businesses on tight margins add a small surcharge for people to pay by card? yes? So, if Apple were charging say, 1.5%, minimum 25p, and allowed apps to charge more via the App Store (to cover the Jobs tax) than via other means, then I don't think anyone would complain.

But 30%? And no way to recoup it? Come on - that's a hell of a 'fee' for using a 'smooth' checkout system!

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@Pen-y-gors

It's not just that, it's the obligatory equal pricing, so you've no way to pass Apple's 30% on to the consumer. It's a cost that businesses must be able to swallow if they want to play inside Apple's ecosystem. They now have to exclude themselves from the biggest selling mobile OS (yes, I'm counting iPod Touches and I do know that Android phones outsell the iPhone) or find a way to supply 30% to Apple while still being competitive with those that have excluded themselves from iOS.

For someone like Netflix, Spotify, etc consider US$99/year to supply a free iOS app to their subscribers versus US$99/year + 30% of take from anyone that creates or renews their subscription inside the app, with no option but to add that functionality to the app. And it's for subscription services, so you're probably not getting additional revenue from the on-average more affluent iOS customers versus customers in general, and Apple's rules prohibit a different price for iOS customers.

Likely outcomes are (i) dump iOS; (ii) introduce a higher subscription rate for all mobile customers. And the latter just adds weight to any consideration of the former further down the line.

On the flip side there are people, like my own company, with no previous subscription infrastructure in place and aspirations. This is great news for us, but for the industry as a whole it's likely to turn iOS into amateur hour. So even we're seriously considering whether to do anything.

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@ThomH

"Likely outcomes are (i) dump iOS; (ii) introduce a higher subscription rate for all mobile customers. And the latter just adds weight to any consideration of the former further down the line."

Or (iii) introduce a "premium package" with near valueless "bonuses", and offer the basic subscription to Android phones, but only the premium for the iPhone.

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This is almost as believable

as the guy who told me about the Lib Dem voting, Prius driving llama that would have played drums for Oasis had it not got into a fight with the Gallagher brothers!

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Grenade

Aargh ... no ... spare me ...!

"premium package" only for iOS?

Can you bear to imagine the smug fabois then ... "I have access to exclusive content so I am now even more superior" ... la la lala la ...

... but at least the joke will be on them ... 30% more for probably cosmetic and minor content / packaging change :-) Multiplied by multiple content taxes ... suckers!

But then they are ADDICTS so probably won't mind as long as their iDevice feeds their sense of identity and superiority ... ho hum!

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Jobs Halo

A Letter From Steve Jobs

Rich,

While I fully understand your position on this matter, there is one detail that you have overlooked. This is my sandbox. If you don't like that, take your toys and leave. You'll be back, since I have the biggest sandbox in the park.

- Steve

Sent from my iPad

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FAIL

since I have the biggest sandbox in the park.

...for now...new bigger one is being build as we speak.

--ex iCrap user

Sent from my Xperia

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bex

Apple will be taken down

Once the regulators get their teeth into this the shit will fry. If microsoft have to be forced to play fair so will Apple

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Flame

Oh really?

Those that never drank the Cool Aid piss in your sandbox.

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Flame

I actually wish for Apple/Jobs to stay on course.

I hope that Jobs will not be swayed and fire off his usual "go fuck off" ... err... "not that much of a problem" emails. Why? Because this is bound to cause a massive stampede of developers and publishers pulling off the iOS platform, dooming the iThingys into oblivion.

Once this happens, the users will follow suit, especially those planning to buy an iPad2 will probably hold off on that decision. Or the iPhone 5. By the time Apple reacts to the stampede, it will be already too late. Hopefully, this would lead to a post-Jobs Apple policy.

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Too much wishful thinking...

I love all these AC's posting their opinions anonymously.

At the moment the only place you can make money selling apps is through Apple's App Store. Developers go to where the paying customers are and that is iOS. Apple have 100's of millions of customers who are prepared to pay money to buy applications. The competition not so much.

"Because this is bound to cause a massive stampede of developers and publishers pulling off the iOS platform, dooming the iThingys into oblivion."

Not going to happen.

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