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Businesses Music The Almighty Buck Apple

Last.Fm Founder Criticizes Apple Over Music Subscription Fees 218

An anonymous reader writes "Apparently not one to mince words, founder Richard Jones lambasted Apple for their recently announced App Store subscription rules. 'Apple just ****ed over online music subs for the iPhone,' Jones wrote in IRC earlier this week. Taking things further, Jones angrily theorized that by effectively preventing subscription services like Rhapsody and Spotify from thriving on iTunes, Apple is paving the way for its own music subscription service where it will, surprise surprise, face little to no competition." Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive. Another article suggests that Apple's fee structure will highlight the publishing industry's broken business model. Some analysts expect it to raise antitrust concerns, though the wave of Android tablets hitting the market may stifle that sentiment.
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Last.Fm Founder Criticizes Apple Over Music Subscription Fees

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  • Easy Fix (Score:3, Interesting)

    by alvinrod ( 889928 ) on Friday February 18, 2011 @03:18PM (#35246938)
    Here's the easy fix. Ditch your app and make a web-based app. Apple has no control over that and it will port more easily to other platforms such as Android, Web OS, WP7, MeeGo, etc. If you're doing it right, you can even make it easy for your users to make a shortcut to your web-app that shows up as though it were an app.

    If that's too much work, don't offer subscriptions through the iOS app. Make a free version that throws in commercials every so often. 30% of $0.00 is $0.00.

    I think these companies want to complain because 30% cuts into their profits, but I don't know how many will leave because the iOS user base is still worthwhile even at 70%.

    As for the anti-competitiveness of it all, is it really a problem? After all, Apple has been losing market share to Android so who really cares if they want to make themselves a much less attractive platform. On the other hand, I can't buy e-books from Apple and have them work on my Kindle so as far as I'm concerned it's not a good argument for Amazon. If nothing else, hopefully these spats will help drive DRM-free ebooks.
  • Re:Oh Jonesy (Score:4, Interesting)

    by node 3 ( 115640 ) on Friday February 18, 2011 @04:15PM (#35247764)

    Jones argues that music service subscriptions don't operate at margins "anywhere near 30%," and that the dramatic loss in revenue will be tough to survive.

    Then price your products accordingly. People are willing to pay for iPads because of the convenience - they will pay for iSubscriptions for exactly the same reason.

    According to new stories I've read from other sites on the same subject, Apple forbids them from charging more to iOS users than they do through their own web storefront.

    All they have to do is have a separate iOS streaming subscription.

    $X for streaming to PCs and Android
    $X*1.3 for streaming to PCs, Android and iOS

    What they *can't* do is offer the same purchase as an in app purchase outside of the app for less than inside. So they can't offer the iOS streaming package for less on their website than they do within their app.

    In other words, this is a non-issue.

Riches cover a multitude of woes. -- Menander