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Apple To Keep 30% of Magazine Subscription Revenue
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."
Publishers in the print world will happily sell subscriptions for less than the price of postage in order to increase their paid subscription count (and hence their ad dollars). 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. If Apple demanded that they get 30% of ad revenue too, that would start to be a much larger issue.
Did they just wait around for Murdoch's The Daily experiment for this? Is this just round two of wait-for-third-parties-to-develop-apps-and-then-hold-them-ransom like with eBooks? What's next?
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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 by many industries. 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) 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
My work here is dung.
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?
My work here is dung.
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
Was anybody seriously expecting the app store not to degenerate into blatant rent seeking?
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?
Don't forget, Apple only requires that there be an option there, and that if the subscriber exists when they get the app, Apple doesn't expect a cut. I signed up for Netflix first and then downloaded the app much later. Under the terms as described, Apple won't get a cent of my subscription fee.
The CB App. What's your 20?
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.
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."
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.