Apple’s subscription system: A mess

From ‘Apple Just Fd Over Online Music Subs’ | paidContent:

“Music and video services do not have a 30 percent margin to give away to Apple NSDQ: AAPL. It means you’ll see them exit the market on iOS devices, paving the way for Apple’s own iTunes streaming.”

Does the subscription system include music content? No one knows, and Apple isn’t saying.

Does it cover content sold piece by piece, like books? This quote:

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

from Apple’s Trudy Muller certainly says it does. But no one really knows, and Apple isn’t saying.

I doubt that Amazon could follow this rule, even if it wanted to. What’s more, the only ambiguity in that statement is around “outside of the app” – because if that also means “in a browser from any machine” then Kindle on iOS is dead in the water. Is Apple confident enough of its own position to do that?

Of course, some publishers will just go for it. Apple is betting that the publishers will see the opportunity as great, and the risk of being left behind as greater still. The fear factor of missing out will loom large.

But it will leave a sour taste, and publishers will know they’ve been screwed over. In the short term, that won’t matter much. But when a company keeps playing hardball constantly, insisting on the same cut no matter what service it provides because it’s in a position of power, sooner or later it gets bitten back.

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  • http://mangochut.net/ mangochutney

    This is one of the few instances where — in my opinion — Apple needs to communicate their guidelines and goals more clearly.
    I’m all for gaining the upper hand on existing and potential competitors, but I fear that keeping mum on a matter that concerns three separate industries and Apple’s customers might do more damage than good.

  • http://twitter.com/piotwit Piotrowski

    Ian, it seems that a lot of commentators have very short memories. It was only a few months ago that Amazon switched their revenue share with magazine and publishers from, 70/30 to 30/70.

    Even with Amazon’s new reduced cut they deduct “service” costs first. That reduces the publishers ‘take home’ to around 60%. According to this article. http://bit.ly/bThrM.

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  • http://pulse.yahoo.com/_7PSYIBYSL3IERNYK7I5R5KXBHI Ryan

    Oh, please. You want to see a mess? Look at Google’s Android-

    Vaporware, Forked OS’es, Apps that steal your data and send it to China or Russia, apps that don’t work, cheapos that wont pay for apps and did I mention announcements about products that only exist on crappy home made videos- like One Pass.

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