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 …

[Piers]

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.

[Anton Ivanov]

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.

[Ian Wellock]

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.

[jai]

@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?

[Anonymous Coward]

@ 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.

[Twilight]

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)).

[Alex Rose]

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.

[Piers]

@ Alex Rose

Your condescension is appreciated.

[Naughtyhorse]

tomorrows news

non appstore/itunes authentication code will be banned from appstore

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

[thenextwatson]

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.

[ratfox]

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...

[Alan Denman]

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?

[Mr F&*king Grumpy]

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) ?

[Desk Jockey]

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... :(

[Anonymous Coward]

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.

[Neil Charles]

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%.

[slooth]

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.

[Robocat]

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.

[dssf]

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...

[Alex Rose]

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!

[Andy Jones]

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!

[Arnold Lieberman]

Living Marxism

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

[hplasm]

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."

[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.

[Steve Loughran]

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

[Jedit]

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.

[Can't think of anything witty...]

^^ Plus 1 ^^

Simply for the use of the phrase "Das Apfelreich"

[Phil Hare 2]

Fanbois...

...Assemble!

[Dan 55]

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.

[Anonymous Coward]

our-way-AND-the-highway deal

just fixed that for you.

[honkj]

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?

[Graham Dawson]

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.

[Can't think of anything witty...]

@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...?

[Lazlo13]

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

[RegisterThis]

@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?

[Harthin]

Ugh...

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

[Avalanche]

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.

[Rob Dobs]

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....

[Destroy All Monsters]

"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!

[Jason Hindle]

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).

[bazza]

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!

[nsld]

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!

[Toby 10]

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.

[Cameron Colley]

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.

[Anonymous Coward]

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...

[xantastic]

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.

[Steven Knox]

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."

[WR]

This is nothing new

As a consumer we all ready know some distribution channels are more expensive than others. You can buy Levis at a high street store or you can go hunting for the same thing in a discount mall.

Is there something stopping content providers, simply stacking a 30% margin on the Apple subscription vs the "factory door".

Some people will pay for the convenience of an in app purchase and others can save a few bucks by logging into the content provider web site.

All seems fair to me.

[Pirate because....well you know why]

[Martin 76]

It would be OK if this WAS the case...

But unfortunately, apple have stated that you can't LINK to anotehr payment method (means the users have to go and find it themselves, OK fair enough)... Whats worse tho, is that the other payment method can't be less than the iTunes method.... So you can't buy it cheaper elsewhere, and the iTunes method will be easier, so it'll ALL be done by iTunes. Fine and simple for the user, but actually the content provider will have to up their prices on the other channels....

[Blarkon]

No - prices must be the same in app and at website

If you go back and read the article, the prices in the app have to be the same as on the website - so you can't jack up the in-app price to drive people to your site - otherwise you aren't in compliance anymore.

[Andrew Harvey]

@WR - Saving a few bucks over venal Apple

"Some people will pay for the convenience of an in app purchase and others can save a few bucks by logging into the content provider web site"

This is one of the issues - content providers apparently cannot charge less for content bought directly than for content bought through apps - so there is little motivation to buy direct.

I love my iPhone - but have always been wary of Apple. I'm actively starting to dislike them (no comment necessary - thanks) as they appear to be increasingly venal. I would buy directly from providers rather than "in app" to deny Apple their pound of flesh.

I really do think Apple are starting to sow the seeds of their own eventual decline.

[David 141]

Who needs publishers?

I might be missing something here, but why would an author bother going through a publisher at all, if they could sell directly on iTunes?

[Cameron Colley]

You don't mean "Author" in that case.

You mean Author, Editor, Proof Reader, Cover Artist, Layout Designer, and Publisher.

If an author is willing to learn all these trades and is actually capable of editing their own work because they've written something grammatically incorrect, or they're just plain shit at characterisation then fine.

An author may be the most important person involved in a book or magazine, but they're not the only one.

[Anonymous Coward]

Sort it, now

Publishers would do well to refer apple to the local competition people to FORCE them to not require an in-app signup that goes via apple (and thus 30% taken). Giving the option, fine, but there must be an option for the publisher to say no, no signups via itunes permitted.

In the longer term, the apple 30% rakeoff has to get reduced. Since apple does very little for the bigger provider, there needs to be something like a 5% rakeoff level in the longer term.

Its blatant monopoly behaviour and apple needs to get slapped down. Imagine Panasonic demanding 30% from the Beeb licence fee for allowing the user to tune to their channels.

[Mike Hanna]

Shopkeepers

How much mark-up do newsagents and Tesco and everyone else who sell magazines make? 30% is aqbout the going rate, isn't it?

[Anonymous Coward]

Money for nothing

http://www.theregister.co.uk/Design/graphics/icons/comment/fail_32.png

It is so hard to understand, Apple are not delivering the content, i.e. they are not acting in the same role as Newsagents and Tesco.

It's more like Ford asking for a 30% cut on all petrol sales or TV manufactures asking the TV channel owners for a 30% cut on all advertising shown on 'their' TVs

[The Fuzzy Wotnot]

Don't like it? Don't buy from Apple then!

I'm not a fanboi, I just can't see what the fuss is about! If enough "media-makers" get pissed off with Jobs and Co., they will push for their own store but most won't as they want they want cachet the affiliation with the shiny Apple stuff gives them.

You pay for the information to be easily assembled into a single PDF, if you don't want to pay then you will have assemble your own info from the many sources. Most publications these days are pushing their own agendas anyway, if you do you're own digging you will make up your own mind about this and that. Alright it takes more time, but you can't have it all ways!

[Anonymous Coward]

What's your problem

30%, not a problem. Stop your moaning. You don't have to worry about the delivery/distribution.

Try and build your own system to do this with the 30% of the cost of your App/Subscription.

[sT0rNG b4R3 duRiD]

Wait a sec...

I can see how the app store would appeal to smaller impoverished developers who probably are supporting themselves with another job in any case,, let Apple take care of distribution etc...

But I think this is somehow different.

[RegisterThis]

@AC "What's your problem"

Err ... Apple don't do delivery or distribution ... the operators do! Unplug Apple's servers and then see how far they 'distribute' or 'deliver' ...

[RegisterThis]

The next step in self-destruction ... GREED!

If Apple controlled the majority of connected device routes to the market, then this might make sense, but they don't. Apple is clearly starting to believe their own spin that everybody in the world has an internet connected Apple device and they have the biggest connected device channel to market. A bit like Mercedes benz decideing that they have the biggest share of the automotive industry!

[nsld]

As I predicted a while back

The Apple tactic was to get enough content providers onto there itunes platform with an "app" and then force them to use iTunes to sell the content the app views.

The content is still coming from the infrastructure of the publishers, they still need to host it and maintain it so the 30% is an additional levy.

To all the fanbois telling the world you cant build a distro channel for 30%, what distro channel do you think the publishers currently use? Do you think the subscription content already out there eminates from the arse of a magic elephant? Of course it doesnt, they already have both subscription and distribution channels!

Apple has used those early app providers to sell devices, now it has them it wants to force a new distro channel for content on them, the publishers dont need an in app sub service, they have a perfectly good one already.

What Apple have missed is that the App aspect of subscriber viewing isnt that large, all the content providers have to do is make it a sign in web page viewable on Safari, job done with no jobsian tax.

Ultimately this puts app creators out of business but Apple arent averse to a little collateral damage, they will just pop some iNets around the developers buildings to catch them when they jump!

[The Fuzzy Wotnot]

Superb!

"the arse of a magic elephant"

That one's going to the next team meeting!

[David Dever]

Anti-Apple bias

As noted above–the tone of your article suggests that it's a mandatory 30% take on everything, when in fact it isn't–Apple charges a portal fee (percentage) for on-platform purchases, but the user retains the option of purchasing (subscribed) content within the app or outside the app.

Therefore, the policy ticks the regulatory checkboxes–it's now up to the app developers to determine how they'll implement this (which, if you REALLY think about it in the context of Android and WebOS devices, makes sense: each platform has its own app portal, plus the app-neutral portal).

On the whole, this policy may end up being better for Google and HP–and possibly lucrative for a few third-party payment portal vendors as well.

As for Rhapsody's 30% whine–talk to the record companies, they'd rather you went away as it is.

[Bob Terwilliger]

Apple still think they are the only show in town

Seems like an Elopian move.

If Kindle is forced off iOS, it may hurt Apple more than Amazon.

Of the few iPad users I know all mention Kindle as a key part of their use of the device.

Wonder if iBooks has to pay this 30% tax also? If not then the lawyers could be busy.

[NorthernSands]

Kindle might be OK...

Kindle might be OK. You don't browse for books to buy 'in app'; there's just a link to the Amazon site (Kindle books section). Instead of calling it the Kindle Store in the app, they call it a link to their website. A subtle difference, but different, none the less. Apple would have to ban all web links to stop that.

If Apple do insist the Kindle app comes under their new policy, then goodbye Kindle app, I should image. Remember Amazon do have a browser based reader in the works, however...

Overall, I think it's a stupid idea. As an option for small dev's with no existing infrastructure, fine (but 30% is high), but for vendors whoem already have a system, that they'd still have to fund, utterly ridiculous!