Apple To Keep 30% of Magazine Subscription Revenue 381
Hugh Pickens writes writes "The Guardian reports that Apple has launched a new subscription service for magazines, newspapers and music bought through its App Store, expanding the model developed for Rupert Murdoch's iPad newspaper and will keep 30% of the revenue from subscriptions if the subscription is purchased through Apple. 'Our philosophy is simple – when Apple brings a new subscriber to the app, Apple earns a 30% share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing,' says Steve Jobs, Apple's chief executive, who is presently taking a medical leave of absence from the company. '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.' Apple's control over its App Store payments plan has long been a cause for concern for content companies. Publishers want to have access to subscriber data which can provide lucrative demographics on which to base advertising campaigns and targeted reader offers. Apple says customers purchasing a subscription through its App Store will be given the option of providing the publisher with their names, email addresses and zip codes. The use of such information will be governed by the publisher's privacy policy rather than Apple's."
Isn't this better than mailing dead trees? (Score:5, Insightful)
But Worse Than Distributing on Android? (Score:4, Insightful)
To get 70% of the subscription money, all of the ad money, and have no printing/postage costs actually doesn't sound too bad for publishers.
Okay but why not just go to the Android Market where you get 100% of the subscription money, all of the ad money, and have no printing/postage costs?
Re:But Worse Than Distributing on Android? (Score:4, Insightful)
Because Apple does a much better job about delivering a large set of eyeballs attached to people who are already trained to pay out money for cool shiny things. Apple is primarilly a marketing company and they are damn good at it. I am not in their target demographic: young, trendy, willing to spend money for the cool factor. So Apple delivers the right audience for online magazines.
I suspect most droid users would say "fuck it... I can get the same info for free if I just spend 10 seconds and Google it".
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Because Apple does a much better job about delivering a large set of eyeballs attached to people who are already trained to pay out money for cool shiny things. Apple is primarilly a marketing company and they are damn good at it. I am not in their target demographic: young, trendy, willing to spend money for the cool factor. So Apple delivers the right audience for online magazines.
I suspect most droid users would say "fuck it... I can get the same info for free if I just spend 10 seconds and Google it".
Apple is primarily a marketing company?
Then why do they have what many in the industry consider to be the best OS, running on the best-manufactured hardware? Some consider Apple behind on tech; but I think the real answer is that they don't simply jump at every new buzzword the electronic salespeople try to sell them. Their products ALL have a fantastic build quality, and their notebooks generally last far longer than the equivalent plastic pieces of crap that pretty much everyone else foists on the buying
Re:But Worse Than Distributing on Android? (Score:4, Insightful)
The Best OS? Which one? And based on what?
The best manufactured hardware? Foxxcon will build at whatever quality you want for anyone. Product Engineering is just slapping COTS stuff together in a shiny case.
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If he is talking about Apple notebooks, they are made by Asus and Quanta.
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Foxconn can only build what is designed.
Product Engineering is just slapping COTS stuff together in a shiny case.
And that kind of attitude is why no one else in the industry gets near the quality of Apple's hardware designs.
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Take some of it apart sometime, it is built the same as everyone else. Clips that you have to use a plastic tool to pop apart, etc. Heck, Apple is worse in the sense that batteries are a pain to replace compared to other vendors.
Re:But Worse Than Distributing on Android? (Score:5, Insightful)
I've taken apart an iMac a Macbook and an iPod. I'm well aware what's in them.
And no, they are NOT the same as everything else. In the same way that all buildings are not the same just because they all use off the shelf construction materials.
Re:But Worse Than Distributing on Android? (Score:4, Informative)
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(edit after preview: for some reason the comment system is adding a ton of extra carriage returns - I didn't type it this way)
The case is part of the hardware. I want all of that commodity stuff they put inside (it makes obtaining upgrades and repairing easier, and with the same architecture underneath it makes cross platform software development easier offering a larger selection of software for me to use).
What I *don't* want is the shitty, noisy, tacky plastic cases that come with most PCs. I am under no
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The best OS claim is subjective, but the beauty is you can run your choice of OS on an Apple - it's no irony that one of the best Windows laptops is the Macbook Pro.
That's a lie and that's not how it works. You can run any OS of your choice on a PC, even Apple's Mac OSX. The difference is Apple will not allow you to run their OS on any hardware. There's nothing stopping me from taking a random Windows box and loading up Linux, FreeBSD, or anything else for that matter. In fact there's nothing stopping me from running OSX on my PC either, except Apple's OSX license terms.
Re:But Worse Than Distributing on Android? (Score:4, Interesting)
Apple hardware is pretty far from "commodity", if you actually try opening it up.
(Or using it.)
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That's not a fair comparison. The 9 series won't be aout for another month or two.
When it is, it still won't be fair. It's lighter, thinner, faster, has a lighted keyboard, more memory, and a larger SSD drive.
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Well, many people in the industry consider it to be the best OS and hardware because of Apple's marketing.
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Marketing will only get you so far. You have to back it up with actual product quality too.
After this amount of time, even with sometimes fantastical (some say magical!) marketing, if they were selling polished turds people would stop buying.
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Marketing will only get you so far. You have to back it up with actual product quality too.
After this amount of time, even with sometimes fantastical (some say magical!) marketing, if they were selling polished turds people would stop buying.
Obligatory Mythbusters: http://www.youtube.com/watch?v=yiJ9fy1qSFI [youtube.com]
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Nobody considered iOS to be the best OS. Nobody
I'm sure Cisco does.
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He't not talking about iOS.
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If you think OS X is merely a "skinned" BSD, you are either enormously clueless or deliberately facetious. Possibly just wilfully ignorant.
Hate it, love it or be ambivalent about it, but your statement is simply inaccurate if it was an attempt to hit a barn door with a shotgun from 5 paces it would have missed. Also known as the "Dick Cheney school of shotgun accuracy".
Especially the part about the marketing department putting it together. That's a good one. Anyone ever told you that you should try standup?
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> If you think OS X is merely a "skinned" BSD, you are either
> enormously clueless or deliberately facetious. Possibly just
> wilfully ignorant.
The Apple fanboys are quite willing to push this idea themselves when it suits them.
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It's certainly the best mobile OS. And it's a variant of the best desktop OS.
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Right, so your logic is that in any industry, the manufacturer that most people think produces the best stuff is a just a marketing company. And their success is not down to engineering the best products.
One wonders why any companies bother having product design departments at all. Clearly by your logic they're not necessary.
It is what they do best and they do it so well, that people blindly believe they are the best at everything despite any actual evidence.
Here's your fundamental error. The evidence is for Apple. Look at any customer satisfaction surveys in product categories that Apple is involved in, and Apple is invariably at the top.
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Oh, get over it. Apple consumers are no more conditioned to buy shiny things than anybody else, and, in case you haven't been paying attention .... absolutely everybody is scrambling to go to a locked down marketplace so they can "monetize the eyeballs". Apple does a better job of providing an integrated experience that just 'works' without all sor
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The true zen investor might say that's a good example of their marketing prowess, as well.
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OK, fair comment that.
Sometimes it can be difficult to differentiate between the anti-Apple screeds and other comments. Your opening paragraph seemed to play to all of the stereotypes of Apple consumers of hipsters and sheep who will buy anything Apple tells them to.
I interpreted yours as being equally haughty on the topic.
My bad. =)
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Apple is a wonderful marketing company.
One of the best. But it only works for them because they are also a brilliant design company, a brilliant engineering company, and have a visionary at the top making the big corporate direction decisions.
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And any clue why Slashdot randomly doublespaces the way it displays my comments?
You're forgetting the /BurmaShave tag.
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Sorta but not quite. This is all directed at Amazon. Apple has always delivered really well engineered premium products. It's just that the latest batch has a built-in distribution system. So now that they have a ton of customers they're going to try abusing their near-monopoly position. There's also some collateral damage to other companies who are doing business via Apple's platform. Where are they gonna go, The Blackberry App Store? It's not so different from what Amazon has been doing the whole t
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So it's like a luxury tax. The old dead-tree distributors charge 7 cents per copy, while Apple is charging 10-15 times that amount. Thanks for clarifying. :-)
Should Apple be seen in this context as distributor or newspaper stand? Also, isn't the nature of business to ask for an amount and then see how the market reacts and then adjust accordingly? If the print industry doesn't like it, they can either get together and negotiate a better deal or decide that whatever Apple is charging them is actually better than not getting those customers - if that is indeed the case. Sometimes you need to accept that 70% of something is better than 100% of next to nothing.
As to
How does the android market get paid? (Score:3)
This is a serious question. Apple set up the App store with the intent that they host and provide ads and what not, and they get their 30%. They are in fact providing services, so Apple's model makes sense to me, at least in terms of fairness. In terms of competition it's an entirely different matter.
It's fairly easy to post a free app to a specific Market, which is marketed and hosted by the android market, but since it's free, they get no money. You could then create an in app subscription model where
How the Android Market gets paid (Score:2)
Like iTunes, the Android Market charges 30% on app purchases and 30% on in-app purchases conducted through the Market, as well. The difference is that the Open Handset Alliance doesn't require you to use the Android Market to deliver apps to Android devices, and does not appear require that content subscriptions are available through in-app purchase on the same terms as out-of-app purchases (they do require that payment you receive for the app itself be through the Market, but do not appear to prohibit out-
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You forget the advertising in most free apps. Why do you think Google bought AdMob?
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(And yes I'm making up these numbers, but you'd have to be a troll not to understand the difference in scale here).
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I'm sure lots of publishers will. And ALSO have iOS apps. You know, for all those millions of people who iOS devices.
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Okay but why not just go to the Android Market where you get 100% of the subscription money, all of the ad money, and have no printing/postage costs?
Because Android users don't tend to buy content.
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It's not either-or. You know what's better than 100% from Android? 100% from Android *and* 70% from iOS.
In fact, even it it was either-or, 70% from iOS is still more lucrative than 100% from Android.
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Because Apple has shown they're willing to completely lock down their platform to restrict user freedom. Which is exactly what the publishers want - their ebooks and magazines and the hardware to be locked down with DRM to prevent users from doing whatever they want with the content they buy. In the publishers' minds, DRM is a requirement. Android platforms
And similarly, Apple is removing... (Score:3)
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Okay, but why not just subscribe directly from the publisher then -- it says right in the summary -- the publisher gets 100% if they bring in the subscription. Not that I think that Apple's model is great, but they only get money if they bring in the revenue.
A couple reasons (Score:3)
1) Apple already has iPhone user's credit cards on iTunes, so it's easy as one click. Why go to the trouble of re-entering your credit card on an outside Website? Even try that on an iPhone? 2) Apple, unlike publishers and "What's Privacy?" Google, will stubbornly protect users' data and will not give it to publishers (who are fuming over it) unless subscribers affirmatively opt-in.
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Yet the iPad experience is also woeful. App switching and the lack of multi-tasking is a woeful experience.. After ten minutes use the task bar of previously used apps is full and you're left scrolling to find the app you want.
Text entry is abysmal - where's the numeric row on the keyboard. If you can fit three rows on an iPhone, you can easily fit four rows on an iPad.
Mobile Safari is a poor excuse for a browser. No tabs, no ad blocking. No flash. Burrying your head in the sand and pretending it doesn't ex
You can't afford either, so you just lie? (Score:3)
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Yeah, but what phone do you use if you want to have sex with *women*?
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Help I'm an Apple Store employee with no sense of humor!
Re:Isn't this better than mailing dead trees? (Score:5, Insightful)
A magazine has much better control of their costs as they are typically being distributed by the publisher directly.
This move by Apple is intended to punish Apple's competitors, that's other distributors and in particular Amazon. There's no way Amazon can afford to give Apple a 30% cut of sales, since their margin is significantly lower than that.
Other subscription services could also suffer. Will this extend to Pandora/Spotify etc? Again there's no way they could afford to give apple 1/3 of their subscription fee as their margin is going to be lower than that.
Apple really want content producers to make direct deals with them, cutting out the middlemen that are making money on Apple's platform. Cutting competition lets them keep prices, margins and profits high.
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Will this really hurt Amazon? (Score:2)
I'm not sure how big a deal this will be for Amazon. It doesn't apply to books sales, since they aren't subscriptions. I know that Amazon offers magazine and newspaper subscriptions, but the Kindle isn't really all that great for mags and newspapers. The slow display and the lack of touch interface are fine for books, but not so good for media where you are jumping from story to story. So the iPad could bring in Amazon subscription purchases that they wouldn't otherwise get at all, in which case the 30% tax
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Because the rules are new and the app hasn't been updated or removed.
It's pretty clear that, unless Amazon have managed to negotiate individual rules (which would probably cause all sorts of regulatory issues) the app as it stands is not co
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That only makes sense if you assume the people who subscribe via the application, would not have subscribed otherwise. If you don't make that assumption then you notice, there is the possibility of losing money.
Ex:
User 1 - I like newspaper X, I'll see if they have it available on my iDevice.
User 2- Oh, look, newspaper X has an app on the app store, why not get it?
This costs newspaper X money in the case of User 1, and increases profit in the case of User 2. Now companies have to decide - is
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No.
Dead tree distributors only charge ~2% for a surcharge. Apple's pricetag is 30% and they don't even have to pay postage/handling fees to send the magazines to customers (or stores).
The App Store data centers and bandwidth don't cost anything to maintain I guess.
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What about the salaries of the people looking after those data centres and the App Store itself?
The Future Niche Market of the iPhone (Score:5, Insightful)
If I were a mobile app developer I'd be asking myself right now if it's a smart idea to try to plan a viable business plan around iOS right now. Any good will you build by bringing people to iOS with your app is totally overlooked by Apple while any customers "they bring" to you runs a hefty 30% Apple tax.
I think it's highway robbery but I'm okay with it because I didn't buy into that bullshit. I bought into Android and instead of lording my decision over everybody I'm just going to remind everyone that the long run has been predicted [slashdot.org] by many industries [yahoo.com]. Apple and Blackberry will remain as niche players but it's going to be an Android future. So go ahead and hold publisher's -- who already hemorrhage cash -- feet to the fire. It's just going to hasten your fall.
Apple sits atop a crumbling marketshare (Schmidt claims 300,000 activations a day [nwsource.com]) and their response is to turn the screws on the third parties that set them apart from the competition? Doesn't make a whole lot of sense to me
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I'd *like* to believe that developers and publishers will stand up to Steve Jobs in the end. I really would. But years of Jobs acting more and more like an thuggish autocrat doesn't seem to have hurt his indie cache in the slightest. Pretentious college students still act like owning an Apple makes than freedom fighters. Most people still associate buying an Apple with sticking it to the man, somehow. And no one seems to care about all the heavy-handed shit that Apple has been doing behind the scenes.
Years
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Jobs isn't exactly Borg though.
How about Raven, the elitist asshole [penny-arcade.com] for the icon?
Re:The Future Niche Market of the iPhone (Score:5, Insightful)
I'm more OK with how Jobs acts than MS.
Apple has real competition in Android, webOS maybe and diehard BB users will only switch when you pry it from their cold dead hands.
The tight control Jobs likes to have over at Apple, for the most part, only impacts Apple users. Don't like it? Go elsewhere.
OTOH, MS used its position to control, or attempt to anyway, the entire consumer computer industry and more. Don't like it? Well fuckin' tough.
If you don't like the policies don't buy the phone. You have no room to complain if you haven't bought in. If you did buy in, well you did so of your own accord. Enjoy the Kool Aid.
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Not only that, but I know more than most.
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Especially when you consider their plans for cloud computing and recent developments with their iOS restrictions and deployment of the App Store on X, It's hard to not see Apple's actions here as pushing toward that centralized, controlled future they chuckled at in that famous commercial of theirs.
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I had an adroid as well as an iphone. I never bought any apps for the android. I've purchased more than 20 apps for the iphone.
I'm a typical consumer in this sense, since the iphone appstore sells considerably more than google's app store...
Android certainly sells more ph
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"Crumbling market share"?
Android is not going to ever be a coherent, lucrative market. Very few people buy an Android phone specifically for Android. They buy it because it's the best phone on their carrier (Verizon), or because it's the cheapest option that provides an app phone.
That is not a good foundation upon which to build a thriving market.
Apple, on the other hand, is making each and every decision which this in mind. And because they can exert greater control over their system than Google can over t
Wrong (Score:3)
Apple buys flash and screens in such enormous amounts (in the billions at a time), they can dictate their price and everyone else is left scrambling for parts and can't compete with the i
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On the other hand this move will accelerate the Android becoming the dominan
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30% forever? (Score:5, Insightful)
Is that 30% for as long as they keep renewing or is it 30% for the initial term? How does one determine if it's a new subscriber?
Also, charging the same price in and out of the apple verse could increase prices for all
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I think that's the point; it makes publishers consider the Apple tax as a business expense so they start accepting it as necessary.
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Renewal goes through Apple too since Apple owns your information.
I wonder how Amazon and Netflix would go about this.
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yes. you know.. every time I want to re-up for a magazine or whatever, I have to pay (again).. don't see why anything would change here.
As you sow, so shall you reap... (Score:5, Insightful)
The original deal, while compulsory(which is not a good sign) was a 30/70, where apple took 30 in exchange for hosting the thing, transaction handling, etc. The fact that that was the only deal in town was a bit skeezy; but it was certainly a boon for the indies who couldn't or didn't want to deal with logistics themselves.
At this point, though, it's a pure money grab. Hey, Amazon, want to offer customers the ability to purchase ebooks(downloaded from your server, linked to their amazon accounts, through the kindle application)? 30% of that is ours, and you aren't allowed to charge a higher price in-app to make up for that. You don't like that? Well, it's a nice app you've got there. It'd be a pity if it were to suffer a cryptographic revocation accident, Capiche?
Re:As you sow, so shall you reap... (Score:5, Interesting)
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blantant rent seeking?
if you were to sell something on consignment, you'd have to pay the store a cut of the selling price.
whats the difference here?
Re:As you sow, so shall you reap... (Score:5, Insightful)
Re:As you sow, so shall you reap... (Score:4, Informative)
The former case is definitely command and control; no alternatives, cryptographically enforced fiat; but it was a deal: Apple provided hosting, billing, and storefront management in exchange for 30%.
The latter case is pure rent-seeking: Even if you operate your own hosting, storefront, billing, etc.(as Amazon, say, does) it will no longer be allowed to let them access a web page and make a purchase. You will be required to offer it as an in-app purchase(30% cut to Apple) for the same price that you would offer it outside. That, is pure rent seeking. Perhaps your ISP should get a percentage of the online shopping you do? Heck, why doesn't Fedex get a cut of the value of the goods they ship?
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show me where Apple DEMANDS the increase
http://www.apple.com/pr/library/2011/02/15appstore.html [apple.com]
Pay to play in the garden with millions of users (Score:4, Interesting)
Whether or not to play in Apple's iOS garden is a business decision companies like Amazon or B&N will have to make. There's no reason for them to offer iOS versions of the e-readers. Oh, except for the large customer base. If that customer base is big enough I'm sure Amazon and B&N and others will agree to Apple's rules. 70% revenue for a customer pool of millions of iPhone and iPad users is better than 100% revenue for zero of them.
Apple is offering others the ability to take advantage of their platform. How many Nook books can you buy from B&N on the Kindle, or Apple iBooks on the Nook? None. Apple is creating a place where Amazon and B&N will be able to compete with iBooks on price using the same e-reader. Neither Amazon nor B&N open their gardens to competitors.
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And this why Android will eventually displace IOS as the mobile operating system of choice, those vendors who choose to sell only for Android will be at least 30% less expensive.
I doubt that. Do you actually think that if Amazon sold a book on the iPhone for $10, they'd sell the same book on Android for $7? Why would they give you the three bucks? They'll sell it for the same price on ALL platforms and just keep the extra they make from non-iOS sales.
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And this why Android will eventually displace IOS as the mobile operating system of choice, those vendors who choose to sell only for Android will be at least 30% less expensive.
Just like PC market-share is increasing every year, because PCs are at least 30% cheaper than Macs? ;-)
I don't own an iPad and buying an eBook for my iPhone never seemed too attractive.
Is there actually an iBookstore equivalent on Android?
I think "mobile operating system of choice" may be misleading. Apple will simply continue to siphon-off the top-profits from the market and leave the rest to whomever wants to fight for it.
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"Neither Amazon nor B&N open their gardens to competitors."
But Android does, and Windows does. Yes, Apple is not the only company with a more locked down, rent-seeking model than fracking Microsoft, but I'm not sure why I'm supposed to like it any better rather than just hating them too.
When I pay money for products or services, I want to be treated like I'm the customer, not like I'm the product to be captured and used as leverage. If Apple is deriving profit by withholding access to me from people I
Re:Pay to play in the garden with millions of user (Score:5, Insightful)
70% revenue for a customer pool of millions of iPhone and iPad users is better than 100% revenue for zero of them.
It's not when you only have a 5% profit margin. When you're losing money on every unit sold, you can't "make it up in volume."
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what probably happened is that too many apps became free and paid for by admob/iAD to the developer. the original prices on the app store were pretty high and fell pretty fast
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Apple created a lucrative market. They are charging 30% for access to that. Apps can still sell content outside of the app, but the fact is that people will vastly prefer in-app purchasing. That should be proof that it's worth the "tax".
Stores pay to be in a shopping mall. Why do they do that when they could just open their own store on their own property? Because the mall brings customers that would otherwise not stop by.
Amazon? (Score:2)
Except that Amazon is not a subscription service, so it hardly even seems to apply.
Even if it did, is Amazon really going to get new customers through Apple, even if the Amazon app offered the ability to sign up via the Amazon app?
Steve Jobs is obviously Catholic (Score:2)
After all, he only asks that you donate 30% of your income.
This tithe is now mandatory however, and rather than costing your soul for refusal, it will only cost you your market presence.
If Apple serves content, great (Score:2)
Even
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So, use the WiFi for those kind of transfers.
Charitable donations? Pay up. (Score:2)
Apple takes a 30% cut of charitable donations made through an app. Disaster relief, feed the hungry, all of it. Everybody pays. In an era where credit card processors are getting hit by regulators (correctly!) for charging 2-4% transaction fees, Apple says it's 30% or nothing.
You'd think the phones were free.
I welcome the mass exodus of developers from iOS to alternative platforms, and then I welcome the later transition to HTML5 instead of "apps" to deliver what should have been web pages anyway.
Reference:
Re:Charitable donations? Pay up. (Score:4, Informative)
Parent can't read his own reference.
Apps that are for charitable donations must be free, and cannot use IAP to get donations. Donations can only be collected via an external website or SMS, meaning they never pass through Apple (and thus a 30% cut is never taken).
See also App Store guidelines, section 21.
it's nice to see that... (Score:2)
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But that wouldn't allow Apple to crank up the evil meter one more time.
Re:Goodbye Netflix App? (Score:4, Informative)
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Kindle does offer subscriptions. You can get the NYT delivered daily for $20/month... magazines and other papers have a similar pricing model
only Amazon knows the numbers, but how many kindle titles are they selling to people that DON'T have kindle hardware... seems 70% is better than ZERO. There must be a pretty good market, else Amazon wouldn't have built apps for just about every platform in existence.
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