Last.Fm Founder Criticizes Apple Over Music Subscription Fees

An anonymous reader writes "Apparently not one to mince words, Last.fm 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.

Comments

Funny...

[dwightk]

that's what artists say subscription services are doing to the music industry

http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

Re:Funny...

[Anonymous Coward]

Coincidentaly, that's also what Mom and Pop said when Walmart came to town.

Re:Funny...

[CheerfulMacFanboy]

Coincidentaly, that's also what Mom and Pop said when Walmart came to town.

Coincidentaly, that's also what the analogy said when you killed it.

Re:Funny...

[Anonymous Coward]

How much should an artist get for a single play of their song? I think well under 1 cent per play is not unreasonable. How much do they make when there song is played on the radio?

Re:Funny...

[Anonymous Coward]

Coincidentally, that's also what the dead horse said when you beat it.

Re:Funny...

[Anonymous Coward]

He sure seemed happy at the time.

Oh, i do miss ol' Bob, i really do.

Re:Funny...

[oliverthered]

Yeh, so where's the money cut? Shouldn't they be bitching about record labels a bit more, or is it the heavily produces singers who already make shit loads that are complaining?

Re:Funny...

[dwightk]

How many bands are going to 1) be satisfied with minimum wage and 2) get 1.5M plays per month ?

Just some more questions. I'm not trying to argue.

Re:Funny...

[Cwix]

Per #2

At half a cent per stream (and 1.5m plays a month) they would make 75k a month A MONTH. That would be 900k a year. There really arn't that many artists that I think should receive 900k a year. The ones who do deserve that, will have no issues getting the 1.5 million plays a month.

Re:Funny...

[Anonymous Coward]

Your numbers are way off. A performer needs only 123,000 plays a month at $0.001 to make minimum wage. 1.5 million would, effectively, make them rich.

Re:Funny...

[dwightk]

last.fm pays artists $0.00075 per play

Re:Funny...

[dwightk]

the number I have for last.fm is $0.00075/play

Maybe that number is outdated.

Re:Funny...

[gnasher719]

At half a cent per stream (and 1.5m plays a month) they would make 75k a month A MONTH. That would be 900k a year. There really arn't that many artists that I think should receive 900k a year. The ones who do deserve that, will have no issues getting the 1.5 million plays a month.

Go straight to your school and ask for your money back.

1 play = half a cent
2 plays = one cent
200 plays = 1 dollar
1000 plays = 5 dollar
10,000 plays = 50 dollar
100,000 plays = 500 dollar
1 million plays = 5,000 dollar
1.5 million plays = 7,500 dollar

Re:Funny...

[sakti]

How much did the artist get for each radio play? Nothing you say. Subscription services are arguably more comparable to radio than purchasing an mp3 or CD. At least they make something off the subscription service. It's a gain as far as I can tell.

Re:Funny...

[GooberToo]

What a troll. Its extremely unreasonable. Using your cost model, if an artist received 20,000 plays in a year, he made $200. He can't even pay rent for a month on that. Now, who's being greedy!

Small bands may be lucky to see a couple thousand plays in a month. You basically just ensured the band self destructed. Furthermore, you are arguing that the purchase of the song should cost hundreds if not thousands, and possibly tens of thousands each.

People, please come back from the land of unicorns and fairies and face reality that LOTS of people ONLY have a job because of copyrights and fair market valuation. And that by pirating or otherwise devaluing their work (as in above), in many cases, you are effectively destroying the artist's livelihood while concurrently attempting to force some type of socialism on them.

Re:Funny...

[Anonymous Coward]

How much did the artist get for each radio play? Nothing you say. Subscription services are arguably more comparable to radio than purchasing an mp3 or CD. At least they make something off the subscription service. It's a gain as far as I can tell.

Not sure why you say artists get nothing for each radio play. Radio stations must pay licensing fees to cover performance royalties, which typically go to the song's publisher and the songwriter.

Re:Funny...

[uniquename72]

Minimum wage for 1 song == living wage for multiple songs, which most artists have.

The real question isn't "Should they be satisfied by minimum wage" but "Is this enough to induce potential creators to release a product, thereby maintaining the furtherance of modern culture?" I submit that minimum wage does that, as it acts as a supplement to other income -- songwriting, after all, needn't take 40 hours per week.

I'd further submit that, for many, many artists, no monetary inducement is needed for the creative process. But that's a different argument.

Re:Funny...

[uniquename72]

Using your cost model, if an artist received 20,000 plays in a year, he made $200. He can't even pay rent for a month on that.

The song is already written; he can go get a real job. Or write more songs. Or tour and make a living off that, like hundreds (thousands?) of bands do. Or write a book about his band experiences, or the sad state of copyright, or a vampire who glitters in sunlight. Or make a reality show.

Why should writing and releasing a single 3-minute song mean living wage for a year?

Re:Funny...

[Anonymous Coward]

Coincidentally, there's a car analogy for it.

Re:Funny...

[Xonstantine]

Why should writing and releasing a single 3-minute song mean living wage for a year?

Exactly.

And lets say that same song was legally purchased and downloaded 20,000 times in a year for 99 cents each download, which is a demonstration of even more real commercial success than 20,000 plays. Even $20,000 isn't a living wage, assuming that the artists were getting 100% of that (and they won't be, of course). So the reality is, if your piece of shit band is only getting 20,000 plays a year, your band simply isn't commercially viable and you need to find a day job. No one owes you a "living wage" for producing a product no one else wants.

Re:Funny...

[QuantumBeep]

Creative people have to be paid, or they can't/won't create.

If you think that somehow musicians need to come up with loads of great songs (intead of a few good songs), you aren't thinking straight.

Re:Funny...

[Graff]

that's what artists say subscription services are doing to the music industry

http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

That link really misrepresents the state of the industry.

First of all, most artists who create their own CDs don't make anywhere near $8 per CD. Having a CD produced varies greatly but the less you produce the more it costs per CD. Many artists go for short runs when they are starting out but they still have to shell out a couple of hundred bucks for 100 CDs. There are also the studio, production, and marketing costs which may or may not be present depending on the individual artist and the desired quality of the final product.

Now, if they sell a good chunk of those CDs they'll make decent money but many of them struggle to sell even a couple of dozen when they are starting out and they often sell them at far less than $9.99 because their goal is getting their music heard, not making money. So saying they make $8 on a $9.99 sale just does not reflect reality.

Secondly, they put single track sales on the same chart as whole album sales. This is comparing apples to oranges. In order to convert the two you'd have to at least multiply the track price by the average tracks per album. On iTunes, at least, the assumption is that there will be at least 10 tracks per album - if you look at the chart this means that the track download approximately matches the album download.

Lastly, the figures for album download and track download represent what might be a typical deal for an artist with a major label but the fact is there are a lot of independent labels out there that are little more than a group of artists who formed a label for the purpose of selling songs in marketplaces like iTunes. These independent labels take little, if anything from the artist so the artist ends up making close to 30% from a sale.

This means that on a $9.99 album the artist would make close to $3. If you look on the chart that would place selling an album through iTunes well above the $1.00 they would get from selling a retail album CD (high end royalty deal). At those rates they would have to sell approximately 390 albums a month through iTunes in order to make minimum wage, far better than most of the other methods in the article.

Basically that article follows the old saying, "There are lies, damn lies, and statistics." Yes, streaming music does make an artist less per unit than other sales and, yes, if you do everything yourself you can get a larger cut. What it ignores are the gains you get from taking a smaller cut but joining a larger distribution model that gets your music out there and listened to.

Re:Funny...

[squiggleslash]

OK, let's look at it from the other side in terms of "How much am I prepared to pay", see what's possible, and see if it also works from another point of view.

I don't have the statistics available to me, but I would assume an average person is unlikely to buy more than one album a month, on average. Part of that's "$15 is quite a bit to spend on music", part of that is most of us spend some time getting to know an album before getting the next one, etc. In any case, $15 is also on the high end, it's what Rhapsody charges for a multiuser account, for example.

Using that, and assuming that I listen to music for six hours a day, five days a week [these are all based on personal usage], and with a song being three minutes, that's 2,400 song-impressions per month per user. Assuming half of the money goes on infrastructure, I calculate around 0.31c per song, which, I guess, is even worse for the artist than the penny a song.

But... and it's a big but, that's what I was paying back when I listened to bought, rather than rented, music. I had my iPad loaded up with music I'd ripped from my CD collection, and was buying one CD a month. And actually, when you factor in it was CD music, the "50% goes on infrastructure" thing goes out the window, artists typically get less than 10% of the revenue from a CD sale.

Were they being ripped off? Well, of course! I've always felt artists deserve more than they get from CD sales. But as a general principle, if we're switching from paying by impression rather than paying by sale, it doesn't appear to me at any rate that artists are worse off when people listen to their music via decent subscription services.

Indeed, it's an opportunity to double dip, to a certain extent. Subscription services have limitations, those limitations are not as bad as they used to be thanks to open systems like Android, but they're there. If you listen to an album and decide you really really really like it, you can buy it, either as a collection of MP3s, or as a CD. In all cases, the artist with the work that's worth buying gets more revenue.

A penny a song impression is probably more than most people would pay, But realistically, it's already much more than people were paying when they bought CDs, ripped them to their music players, and listened to them as background music at work. If subscription services can augment other revenue streams, rather than completely replace them, artists should be better off.

Re:Funny...

[dwightk]

I think artists would love $0.01/play from last.fm considering they are actually getting around $0.00075/play

Re:Funny...

[dwightk]

That link really misrepresents the state of the industry.

First of all, most artists who create their own CDs don't make anywhere near $8 per CD. Having a CD produced varies greatly but the less you produce the more it costs per CD. Many artists go for short runs when they are starting out but they still have to shell out a couple of hundred bucks for 100 CDs.

If you are shooting to make minimum wage and you have to sell 147/month (or more since you say they make less), you might want to press more than 100 at a time.

Secondly, they put single track sales on the same chart as whole album sales. This is comparing apples to oranges. In order to convert the two you'd have to at least multiply the track price by the average tracks per album. On iTunes, at least, the assumption is that there will be at least 10 tracks per album - if you look at the chart this means that the track download approximately matches the album download.

I don't really see what you are saying here. The chart says you have to sell a certain number of whole albums (with any number of tracks), or you have to sell a certain number of individual tracks.

Lastly, the figures for album download and track download represent what might be a typical deal for an artist with a major label but the fact is there are a lot of independent labels out there that are little more than a group of artists who formed a label for the purpose of selling songs in marketplaces like iTunes. These independent labels take little, if anything from the artist so the artist ends up making close to 30% from a sale.

This means that on a $9.99 album the artist would make close to $3. If you look on the chart that would place selling an album through iTunes well above the $1.00 they would get from selling a retail album CD (high end royalty deal). At those rates they would have to sell approximately 390 albums a month through iTunes in order to make minimum wage, far better than most of the other methods in the article.

so you are saying they didn't list every possible combination of artist/label/independent. I missed where they claimed to have done that. Just imagine an extra entry between the second and third line.

Basically that article follows the old saying, "There are lies, damn lies, and statistics." Yes, streaming music does make an artist less per unit than other sales and, yes, if you do everything yourself you can get a larger cut. What it ignores are the gains you get from taking a smaller cut but joining a larger distribution model that gets your music out there and listened to.

It shows precisely how much you are going to have to benefit from that larger distribution model in order to make the same amount doing other things. Most bands will probably chose more than one way to offer their music. If I were a musician I'd stay away from spotify.

Re:Funny...

[Graff]

If you are shooting to make minimum wage and you have to sell 147/month (or more since you say they make less), you might want to press more than 100 at a time

Right, if you click through to the original article that has the data for that chart you'll see that they are basing that on making 1,000 at a time for nearly $2,000. This is something that is highly unlikely for a newer artist since that's a huge initial investment, especially after you add in all the other costs involved in producing an album. A lot of the artists that I know truly fall into the "starving artist" category! My point is that the great profits they list for producing, making, and selling your own CDs are really a best-case scenario, not something you should base a business on. You almost always want to base a business on a worst-case scenario, anything past that is gravy.

Secondly, they put single track sales on the same chart as whole album sales. This is comparing apples to oranges. In order to convert the two you'd have to at least multiply the track price by the average tracks per album. On iTunes, at least, the assumption is that there will be at least 10 tracks per album - if you look at the chart this means that the track download approximately matches the album download.

I don't really see what you are saying here. The chart says you have to sell a certain number of whole albums (with any number of tracks), or you have to sell a certain number of individual tracks.

By listing both in the same chart it can create the illusion that album sales are so much better than track sales. In any comparison you should make all the compared items have the same base units so that you aren't playing psychological games with the reader. Either make it all album sales or all track sales, then the comparisons are easier to see.

Re:Funny...

[dwightk]

The comparison here is how much of anything it takes to make $1160. That's the unit, everything else is variable. If the reader doesn't understand that, I don't think that counts as psychological games, just ignorance.

Look at the orders of magnitude. None of the adjustments you are proposing are going to change the numbers required by an order of magnitude. You can even ignore the album based lines since the point is the subscription services are not paying the artists. Bands that get listened to 4M times per month on spotify don't care about the $1160 that brings in.

Re:Funny...

[Graff]

The comparison here is how much of anything it takes to make $1160. That's the unit, everything else is variable. If the reader doesn't understand that, I don't think that counts as psychological games, just ignorance

Part of the unit is what the thing is. Since an album consists of tracks the right thing to do is normalize everything on either tracks or albums, using a value of average tracks per album to convert between the two. I can make some amounts look much bigger in comparison to other amounts simply by using a different unit of measurement.

For example, suppose I say that you need to sell 2,000 jelly beans or 5 pounds of jelly beans. Those two numbers reflect approximately the same amount of jelly beans but it creates the possibility of one measurement sounding much larger than the other. In order for you to figure out a proper relationship you have to go out of your way to do the conversion yourself, something that is a barrier to the reader for quick and easy comprehension.

Changing the units in a comparison is a common trick to confuse the reader. Yes, everyone should be savvy enough to see through that trick but even highly-intelligent people often fail to catch on to it. Perhaps the author didn't intend to deceive but the fact remains that any good comparison uses the same units for all of the examples in order to be as clear as possible.

Re:Funny...

[uniquename72]

There are already enough great songs. I'd wager that you haven't heard 1% of them, and you won't in your lifetime. If no more songs were released, no more books written, no more films produced, there would still be more greatness available to every future generation to consume without tiring.

Part of the problem is that too many people are slaves to marketing that tells them what's happening RIGHT NOW is great, while everything else is passe. That's not true. In fact, that's counter-productive to cultural advancement, and a big reason we have thousands of Justin Biebers and Gagas, but no Schuberts, Coltranes, or Josquins.

Creative people have to be paid, or they can't/won't create.

Tens of thousands of people prove you wrong every day.

Re:Funny...

[QuantumBeep]

I like professional-quality creativity. It ain't the only kind, but most of my favorite things were made by people who were paid to make it.

Re:Funny...

[sh00z]

Earning 10 times the minimum wage doesn't make you rich. Here in Texas, you'd be upper middle-class. In California, you probably still couldn't afford a house in a decent neighborhood.

Cy me a River

[oh_my_080980980]

No one cares Jones. Subscriptions are a waste of money!

Re:Cy me a River

[MobileTatsu-NJG]

No one cares Jones. Subscriptions are a waste of money!

You ever tried it? Personally I enjoy having access to virtually every song ever made and not having to maintain a collection of MP3s.

Re:Cy me a River

[h4rr4r]

Really every song ever made?

Please do inform me where I can find such a service.

Re:Cy me a River

[pyalot]

Actually, the big 4 (Sony BMG, EMI, Warner and Universal who account for something like 99% of the content on the big subscription services) together only make about 5 million songs available. Together they have a back-catalogue of about 200 million songs, most of which you'll never see again in any shape and form because they deem the cost of media transfer and meta-data editing to high in relation to how many they'll sell of each.

Re:Cy me a River

[BlackSnake112]

But it'll cost you for that access. Also remember that after 5 'moves' you have to buy the song again.

Isn't the article about magazine subscriptions?

Re:Cy me a River

[MobileTatsu-NJG]

I said 'virtually'.

I've been a Rhapsody subscriber for years. Whenever a song pops into mind that I want to hear Rhapsody has it nearly every time. 15 seconds later I'm listening to it.

Re:Cy me a River

[dotwhynot]

No one cares Jones. Subscriptions are a waste of money!

I used to think this. Then Spotify came along. It changed everything, and represent to me the new model for music everybody is asking for.

Not only the streaming promise of having access to unlimited music, but so elegantly, user friendly, fast and easy implemented. Plus sharing with friends, social playlists and offline syncing to mobile devices. One day I suddenly relalized I even preferred using it to play tracks I already had on the harddisk. So damn convenient is it.

When you have friends over, you have most any music anybody would like to play. I know I don't "own" it, but the amount of Spotify music I've played already, it would have cost me a fortune to own it. And I would have thought of the per-track cost every time, instead of just adding any music I and friends feel like playing. The small sub fee is a damn good deal for enjoying this, even if I don't own it.

And for me, discovery of new music have increased as well. And since most people I know take for granted that everybody has Spotify, you can easily share direct links to tracks and playlists.

Reading over this sounds like a hallelujah sales pitch, but I'll stand by it god damnit, Spotify have change how I buy and consume music for me and very many people I know.

Re:Cy me a River

[MogNuts]

I'm sure those services have more than you do, that's for sure.

Re:Cy me a River

[h4rr4r]

More surely, but do they have what I want is the question.

Re:Cy me a River

[jdpars]

I think the root idea here is that buying music on a song-by-song basis is no longer feasible at current costs. Everyone loved the 99 cent songs on iTunes, but now even that is way too much. Is a dollar really worth the average amount of time you listen to a song? I'd wager that's, at absolute most, an hour per month for most people, for an average song.

Re:Cy me a River

[h4rr4r]

I will check it out, provided their service works with linux and android. Hopefully their catalog has more depth and breadth than Pandora.

Re:Cy me a River

[dotwhynot]

Actually, the big 4 (Sony BMG, EMI, Warner and Universal who account for something like 99% of the content on the big subscription services) together only make about 5 million songs available. Together they have a back-catalogue of about 200 million songs, most of which you'll never see again in any shape and form because they deem the cost of media transfer and meta-data editing to high in relation to how many they'll sell of each.

I don't know about the 200 mill number, but Spotify have over 10 million tracks. There are some holes in the catalogue, but very few. And those 10 mill tracks are available to me right now, for almost nothing - around half a dollar per day in a high-cost country, where do I go to buy the 200 mill and at what cost?

/yeah, I like Spotify, but not in any way connected with them

Re:Cy me a River

[MobileTatsu-NJG]

But it'll cost you for that access.

Well.. yeah, services cost money. I think I'm misunderstanding your point.

Also remember that after 5 'moves' you have to buy the song again.

I'm unfamiliar with Last.fm. With Rhapsody and Napster you pay a monthly fee and listen to all you want. There are more distinctions between those two but I'm not sure anybody's terribly interested in hearing about them.

Isn't the article about magazine subscriptions?

I didn't read the article, but the headline says 'music subscriptions'. I'm personally annoyed with Apple about it, too. I was a Rhapsody subscriber before the iPhone was even in development. I don't see why they should get a cut of my subscription fee without at least showing me that using the service is somehow costing Apple money. (i.e. if Rhapsody was sending the stream through Apple's servers I'd understand a little better.) If I had become a Rhapsody subscriber by finding it in the App Store, that'd be different.

Err now I'm rambling, sorry.

Re:Cy me a River

[MobileTatsu-NJG]

Rhapsody *might* work via web browser on Linux, but I don't know this as fact. Honestly, knowing that you use Linux, I wouldn't send you Rhapsody's way. (Although it doesn't hurt to check it out.) I *think* they have an Android version, if not I think it's coming soon.

I might suggest you head towards Napster instead. At the very least, if you pay the $60 for a year, you get 60 MP3 downloads. So even if you think the service sucks you can get your Mp3s and be done wtih it.

Re:Cy me a River

[Anonymous Coward]

Not for me. I have Rhapsody. My kids and I fill up our MP3 players with as much as they will hold for a total of $15 a month (thats about 48GB between us). I also stream live to any computer and my Droid and N800 for no additional fees. All for $15/month. Sure, if I stop paying the monthly fee we all lose everything but who cares. I pay $90/month for cable and I get nothing to keep in return either and I can't stream the shows and movies of my choice with that.

Side note..
I also use Pandora with is great at finding new songs I may like (mostly different sub-genres of electronic which gets no playtime anywhere in the US). When new song is played on Pandora that I like, I search for it on Rhapsody and add it to one of my playlists. Now I can listen to it any time I want.

The Rhapsody web interface and the native app aren't the greatest but they work and synchronizing our three separate players is as easy as plugging them in.

Re:Cy me a River

[lgw]

Is there any way to get your spotify tunes in your car without a smartphone?

Re:Cy me a River

[Amouth]

but that is just it - what apple want is 30% if and only if you subscribe from inside the application on the idevice.. which then uses apple for payment proccessing (where they take their 30%)

in the past things like pandora you could download but to sign up and pay you had to go online and pay them that way - there was no option to do it from inside the application in Apples frame work.

Apple has now said that if your going to play in my sand box you have to at least give customers the option of paying from inside the app through apple..

hell last.fm or pandora or amazon they could have the same item for 30% more on the apple side and still have it as they do now on their side.. would be zero diffrence to them or apple.. as long as apple can get their 30% on what comes from them.. in the end it is the consumer that is getting fucked (as normal)

while i don't see this as anti trust material - i do find it very much bait and switch from the end users..

Re:Cy me a River

[MobileTatsu-NJG]

but that is just it - what apple want is 30% if and only if you subscribe from inside the application on the idevice..

Ugh, I think you're right and I misunderstood that. That's what I get for listening to what people say in the comments.

Re:Cy me a River

[dotwhynot]

Is there any way to get your spotify tunes in your car without a smartphone?

There is this: http://www.applian.com/replay-music/ . I use that for exactly same purpose, works great. Converting Spotify playlists this way is as easy as any other method of getting music to your car. An as legal (at least where I live).

In addition to smartphone line og FM connectors to car stereo.

Re:Cy me a River

[Straterra]

That's why I recently switched from Pandora to Last.Fm, personally.

Re:Cy me a River

[makomk]

hell last.fm or pandora or amazon they could have the same item for 30% more on the apple side and still have it as they do now on their side..

Except that they couldn't. Apple's new rules require that they charge the same price via in-app purchasing (with the 30% cut paid to Apple) as they do when selling subscriptions on their own site (without Apple taking a cut). Companies like last.fm and Pandora have to either put up their prices in general or stop offering music on the iPhone.

Re:Cy me a River

[Amouth]

ok i didn't read it that way the other day - ok now enter the lawyers.. if nothing for the bait and switch

Re:Cy me a River

[Buelldozer]

"hell last.fm or pandora or amazon they could have the same item for 30% more on the apple side and still have it as they do now on their side."

My understanding is that this is specifically NOT allowed. Prices in the Apple store must be the same or LESS than what's available on a producers website.

What competition is

[noidentity]

Apple is paving the way for its own music subscription service where it will, surprise surprise, face little to no competition.

So, I take it Last.Fm would allow me to run my own streaming service within theirs, and make money off it? After all, if they lock me out, they face little to no competition.

Re:What competition is

[_Sprocket_]

So you're saying Last.Fm is comparable to an iPod / iPhone / iPad?

Re:What competition is

[betterunixthanunix]

Does Last.FM make computers? No. Does Apple make computers? Yes. Do some of Apple's computer products feature restriction systems that allow Apple to prevent Last.FM from competing for the users of those devices? You bet.

Re:What competition is

[Anonymous Coward]

Do you talk to yourself? Yes!

Re:What competition is

[im_thatoneguy]

Last.Fm doesn't block me from installing *other* applications on my computer though outside of their control.

Re:What competition is

[CheerfulMacFanboy]

Last.Fm doesn't block me from installing *other* applications on my computer though outside of their control.

And Apple doesn't stop you from streaming music from a less whiney provider. Or a free service, like last.fm - wait , what? They complain because somebody asks money for something for extra features?

Re:What competition is

[Anonymous Coward]

Apple's computers don't restrict LastFm, Apple's software does -- just as LastFm's maintains control over who streams in its software. You can certainly use Apple computer devices to run LastFm, you just can't use the App Store or non-jailbroken copies of iOS to do it.

Re:What competition is

[Anonymous Coward]

a) That is just paranoia. Neither Apple nor any of the other corporate boogeymen you fear lock out 3rd party software.

b) How is that not true of any piece of hardware made, that has software capable of being updated?

Re:What competition is

[noidentity]

Why did I get modded down? I'm trying to come up with things besides "mods disagreed with my view" but am failing.

Re:What competition is

[Americano]

And Apple doesn't stop you from signing up and subscribing on the last.fm web site, thus allowing last.fm to retain 100% of all profits generated by the subscription.

Of course, that requires last.fm to maintain their own customer tracking and billing system, too, which will cost them money.

The only "restriction" is that you can't say "Sign up on the web site, for $10, or right here in the app for $20!" -- the terms must be identical.

Re:What competition is

[Anonymous Coward]

I considered modding down, but didn't b/c there's not a "Strawman" mod. I guess other mods decided that "Strawman" == "Overrated"

Re:What competition is

[Anonymous Coward]

Because you wrote a short and sarcastic post that made a bad analogy without bothering to back it up - that doesn't add any substance to the dialog, it's mostly just noise.

Re:What competition is

[noidentity]

Both replies appreciated, and they make sense.

Re:What competition is

[Patch86]

Assuming competition works properly, hopefully services like Last.fm will exercise their commercial right and discontinue their product on Apple's device; after all, if Apple's terms aren't commercially viable, they can stop using their platform.

If Android (/Windows/Blackberry/whatever) can present a platform that IS commercially viable, Last.fm can continue to develop for those platforms. That might make these platforms seem more desirable, in this one way, than iOS. If Apple find the situation uncomfortable, they'll revise their terms. That's competition in action.

If there is something in the mix that might stop the above playing out, then it's time to break out the anti-trust laws. Otherwise, might as well let the markets sort it out.

Oh Jonesy

[WrongSizeGlass]

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.

Re:Oh Jonesy

[VGPowerlord]

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.

Re:Oh Jonesy

[Anonymous Coward]

Apple will not allow the subscription price on the ipad to be more expensive than the same subscription off of the ipad. So any biz that wants to stay in the app store will have to raise prices across the board. Apple really is pulling the rug from under all these subscription businesses. Apple sees them doing well and said "Mine! Mine! Mine!" When apple does enter the market they will have a built in price advantage.

Re:Oh Jonesy

[WrongSizeGlass]

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.

Yup ... charge them all the same for the iSubscriptions/eSubscriptions, just price your product so it is profitable. If you don't then you won't be producing anything before too long. If your product ends up too expensive (eg, you'll need to charge more than the market feels it's worth) then your business plan needs some work.

Re:Oh Jonesy

[stagg]

That only works if your profit margins can spare 30%.

Re:Oh Jonesy

[Anonymous Coward]

Could they get away with calling it "Subscription+" and throwing in a free desktop wallpaper or some other useless perk?

Re:Oh Jonesy

[DdJ]

People were doing that. The thing is, if you've already got development and distribution and promotion and all that stuff handled otherwise, factoring in 30% for essentially nothing but payment processing is pretty much unprecedented.

Something like 2% or 3% is closer to normal. Given the tie-in to an existing and popular gift card ecosystem (iTunes cards) and the near universal participation in the system by iOS users, maybe even 5% would have been reasonable. But 30%, for just payment processing? Even as an avid iPhone/iPad/MacOS user myself... too much, too much.

(Unless you're allowed to charge more to make up for it. That'd be better.)

Re:Oh Jonesy

[VGPowerlord]

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.

Yup ... charge them all the same for the iSubscriptions/eSubscriptions, just price your product so it is profitable. If you don't then you won't be producing anything before too long. If your product ends up too expensive (eg, you'll need to charge more than the market feels it's worth) then your business plan needs some work.

It's not the same price, though. Last.FM would make 30% less from iOS customers, as Apple takes a 30% cut. And, as you mentioned before:

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.

If iOS customers are willing to pay more, why would Last.FM intentionally make a deal where they make less?

Re:Oh Jonesy

[MogNuts]

I take it you have never had any business experience, worked in business, or any education in it whatsoever.

All businesses pretty much adhere to a general way of operating, finance and accounting-wise. All retail is pretty much within, for example, 3%-10 margins on average. Some items more, some less. All prices for particular products in particular categories all are within certain ranges. This stuff isn't pulled out of their asses. You can't just charge more for the hell of it. I'm sure you've even heard of as the price goes higher, consumer demand goes lower.

Or to put it in a simple way your completely clueless post can understand:

"I'm sure you no problem with your employer telling you that you should take a $10,000 pay cut. Even though you're just about breaking even after paying all your bills. Doesn't matter. It's your problem and if you can't cope, you shouldn't be living on your own."

Re:Oh Jonesy

[Anonymous Coward]

The thing is, some of the subscription services are already fighting the RIAA etc. to maintain a balance of competitive and profitable. I specifically remember reading an article (sorry, google it yourself; I'm too damn lazy) describing that argument and reaching a deal that worked out for both sides, based on a percent value. Moving their prices higher just to account for one distribution means could hurt them in the competitive end. Not moving their prices higher to a point where that is a legitimate concern, they may have to worry about making a reasonable profit at all. It makes sense that they are concerned about that move.

They already have the music industry trying to grab as much of their profit as they can, they don't need the distributor doing the same unreasonably. If they were allowed to add a little price bump for Apple to grab their share out of, I'm sure it wouldn't be so much of a problem--they'd probably be able to maintain the same level they're at now. But that's not the case, so of course, they're going to be concerned about getting fucked out of their business model that is working just fine before Apple decided to get greedy with them.

Re:Oh Jonesy

[betterunixthanunix]

There is no reason to assume that Last.FM can profitably raise its prices, or that it could raise its prices enough to afford paying Apple's 30% fee without losing more customers than it would gain. What if Last.FM is already operating at or very near to the equilibrium price point?

Re:Oh Jonesy

[Anonymous Coward]

It's not nothing but payment processing. It's delivery of the product, storage of the product, advertising, and virtual shelf space. The servers and bandwidth that make up the Apple app store cost money. They are also potentially collecting marketing information if customers opt-in. It's the equivalent of setting up an entirely new distribution network in order to reach millions of potential customers. In the real world, news-stands are owned by individual owners who take on the risk and cost of moving issues. In the virtual world, Apple is taking on that role for a population the size of Mexico City but much, much richer. And they're not demanding exclusivity, they're just charging a toll on the highway that they created. If publishers want to go to all the trouble to create their own web-based subscription fulfillment service (something they have proven to be exceedingly bad at), assuming it uses a real standard like HTML5 or PDF, they can still sell to iPad users on their own if they don't like the 30%. But I bet it would cost them more to do so.

Re:Oh Jonesy

[Jumperalex]

Seems to me the solution is charge iOS users the same price regardless of subscription source but charge less for Android/Win7/RIM/etc users. Or does the Cult of Steve think they can dictate terms between two non-Apple entities beyond jumping up and down, stamping its feet, and complaining that they are being competed against?

Re:Oh Jonesy

[Jumperalex]

They only have to raise the price across the iOS board ... nothing says they have to also raise the price across the market board.

Re:Oh Jonesy

[node 3]

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.

Re:Oh Jonesy

[Anonymous Coward]

Simple solution.

On the streamer companies website:
"Sign up now to stream unlimited access to your device for only $9.95/month, if you stream to an apple device, the price is only $13.95/month"

---
It is the same price on their site as it is through the Apple store and they can still charge less to people without an Apple device. That would get the point across to people REAL quick that something is wrong with Apples pricing and distribution model and that it is not consumer friendly.

Re:Oh Jonesy

[geekoid]

And that's the problem.

Apple demands there price be equal to or cheaper then any other platform you sell on.

This reeks of Tim Cooks doing.

Re:Oh Jonesy

[TrancePhreak]

Cult of Steve has said exactly that. Your prices for iOS must be the same or lesser than the alternatives.

Re:Oh Jonesy

[WrongSizeGlass]

All businesses pretty much adhere to a general way of operating, finance and accounting-wise. All retail is pretty much within, for example, 3%-10 margins on average.

Wow, you sure work in some sorry ass poor retailers. To me it looks like you have no clue about business. If you try to run a business on 3% - 10% gross margin then you need to go ask someone if they want fries with their order. The market decides what price point any particular producer can charge for their product and they charge what the market will support.

Is 30% way too much for Apple to charge for this "service"? IMHO yes, but they are charging what their market will bear. The content producers need to decide if they can live with losing 30% to Apple, increase the price for their product, find another digital delivery system or just sell it behind a paywall on their website. Apple's delivery system is not the only one available.

BTW, the digital distribution business model isn't 'retail'.

Re:Oh Jonesy

[Em Adespoton]

I think, based on history, you'll find the answer is Yes.

Re:Oh Jonesy

[Em Adespoton]

Not quite true: Apple will not allow the subscription price paid via the iPad to be more expensive than the same iPad subscription paid via some other medium (such as iPad's web browser).

All they have to do is block the subscriptions from playing on the iPad unless they're "certified iOS subscriptions" that have come either through the App Store, or from the website at an iOS premium price. The subscription for streaming the content to anywhere else can be at whatever price point they want to set.

The end result will be that they may get fewer iOS subscriptions, but that will be offset by the 30% markup they get back from those who DO subscribe, but do it via their website.

Re:Oh Jonesy

[Anonymous Coward]

I think you mean X / .7, not X * 1.3

Re:Oh Jonesy

[Anonymous Coward]

There is a small glitch to this. This would mean that customers who subscribe for the non-iOS streaming program will still be able to access it through the Safari web browser right? This directly fails to comply with the rule that the subscription fees should be consistent.

Re:Oh Jonesy

[Anonymous Coward]

Unimportant for the point, but they would need to make the cost be $X*1.43 when including iOS for it to be equal.. 1.3 *.7 = .91.

When Apple makes a competing service the price difference to far off for the outsider to compete. Apple has gotten customers hooked into an environment by getting 3rd parties to produce the content. Now they are taking the most profitable content areas and basically making it impossible for those 3rd parties to compete. Whether this is bad or good is, I suppose, arguable.

Re:Oh Jonesy

[Anonymous Coward]

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

Actually they would have to charge X*(10/7) to net the same amount of money after the 30% taken by Apple, but I'm just being pedantic.

The real problem with this model is that many customers likely won't be willing to incur the added cost like they would a sales tax. A customer will also see it unfair that they don't have the choice of a two- or three-platform subscription while other platform owners would, indeed, have that choice.

Re:Oh Jonesy

[hh10k]

iTunes cards here is Aus (and I assume elsewhere) are regularly sold with a discount of 25%, suggesting that that is the retailer's markup. Add 5% costs, and it's easy to understand why Apple can't sell anything with less than a 30% cut. Anyone who doesn't use discounted iTunes cards is getting seriously ripped off.

Re:Oh Jonesy

[node 3]

You're right. The idea stays the same, though.

Re:Oh Jonesy

[node 3]

The fee is consistent. Safari (etc.) + iOS streaming costs the same whether you buy it in app or via Safari. That's one package. The other, cheaper package is the just Safari (etc.) package.

Everything is consistent. And the rule isn't that things have to be consistent, just that the in app price can't be higher then otherwise.

Re:Oh Jonesy

[BoberFett]

"Apple's delivery system is not the only one available. "

Apple is doing everything possible to rectify that situation.

Re:Oh Jonesy

[MogNuts]

*Shakes head* Why do I bother?

I was using that as an example. Because you mentioned retail.

And no, it's ONLY what the market will support. You have to factor in so many other things.

Forget it, this is lost on you. I'm done with this reply.

Tablets?

[Anonymous Coward]

Android tablets aren't going to do shit at their current prices.

If you don't like it,

[MikeDirnt69]

don't use it.

Re:If you don't like it,

[Anonymous Coward]

And don't forget to tell others not to use it.

Re:If you don't like it,

[Anonymous Coward]

That would be nice, but Apple does not allow *any* other way to get apps on their products. You pay for the hardware, then cannot add enhancements or ever software upgrades. They should boldly advertise before hand that if you do not like paying 30% extra buy Android. That would be more honest.

Welcome To The Dark Side

[Anonymous Coward]

I guess we're starting to see Apple's true face or rotten core... Banksy please depict that.

Re:Welcome To The Dark Side

[fuzzyfuzzyfungus]

Has Apple ever been about anything other than elegantly polished control(with the possible exceptions of the early Woz years, and the Scully period where they were too busy sucking to be about anything...)?

The only real change is that they now have the power, and the crypto, to bring to fruition the exact same principles that have motivated them for years.

strongly disappointed in Apple

[Anonymous Coward]

I am a long-time Apple user. However, I am also a huge music fan and I am listening to Last.fm on an iPhone right now. If Last.fm discontinues the app because of the new policy, Apple will have created another Android owner.

Re:strongly disappointed in Apple

[CheerfulMacFanboy]

I am a long-time Apple user. However, I am also a huge music fan and I am listening to Last.fm on an iPhone right now. If Last.fm discontinues the app because of the new policy, Apple will have created another Android owner.

So last.fm will force you to remove the app from your iPhone, or make their service incompatible with it? And that's Apple's fault? They aren't remotely asking for something like that.

Re:strongly disappointed in Apple

[jdgeorge]

Sounds as if the AC considered the Last.fm service more valuable than the "Apple experience." In other words, if Last.fm leaves the iPhone, so will he. Nothing wrong with that, unless you think the AC is wrong to choose the thing he or she likes.

Re:strongly disappointed in Apple

[KhabaLox]

So last.fm will force you to remove the app from your iPhone, or make their service incompatible with it? And that's Apple's fault? They aren't remotely asking for something like that.

What? If last.fm can't (or won't) sell their subscription service through the App Store because of the 30%, and that results in people leaving because last.fm is their killer app, then that's a loss for Apple. It doesn't matter where you assign the blame.

But, if it turns out that a user can get the last.fm service on my Android or Windows phone and not on my iPhone, then it's pretty clear where the problem lays.

Re:strongly disappointed in Apple

[Jumperalex]

Damn well straight they are asking for that. If a business attemps to dictates untenable terms (30%) with obvious consequences (cannot competetively operate at a profit) then they are either asking for those consequences or are incompetent. I am not a fan of Apple but I would never accuse them of incompetance. Arrogance yes, but not incompetance.

Re:strongly disappointed in Apple

[CheerfulMacFanboy]

Damn well straight they are asking for that. If a business attemps to dictates untenable terms (30%) with obvious consequences (cannot competetively operate at a profit) then they are either asking for those consequences or are incompetent. I am not a fan of Apple but I would never accuse them of incompetance. Arrogance yes, but not incompetance.

They are asking for what? Care to point to the exact words where Apple asks last.fm to disable their software? Or make their streaming incompatible with their own app? And most importantly, where does Apple ask last.fm to extort a fee from mobile users for a service that is free for desktop users?

Do you work for last.fm by chance?

Re:strongly disappointed in Apple

[CheerfulMacFanboy]

But, if it turns out that a user can get the last.fm service on my Android or Windows phone and not on my iPhone, then it's pretty clear where the problem lays.

The problem is that Android users will be paying for a service that is free for desktop users. Yeah for freedom.

Re:strongly disappointed in Apple

[KhabaLox]

Better to have the option to pay for something if you want it, than not to be able to have it at all.

But are you saying that there is no differentiation between the paid mobile subscription and the free web service? That is pretty lame, though if mobile music is worth it to you, then I suppose you'll pay for it. I don't think Pandora works that way.

Easy Fix

[alvinrod]

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:Easy Fix

[CheerfulMacFanboy]

Here's the easy fix. Ditch your app and make a web-based app.

Yeah, do what Apple said you should do when they introduced the iPhone, which was said to be really dumb at the time.

Re:Easy Fix

[painandgreed]

Which, BTW, is how Apple wanted people to do things in the first place. People screamed and wanted apps and a store, so they got that too.

Re:Easy Fix

[jpmorgan]

No, just no. If your profit margin is less than 30%, a 30% cut to per subscriber revenue means you're losing money on every customer, before any fixed costs. You can't just "make that up in volume".

If you loose $0.50 on every customer, and you have 1 million customers, you just lost $500,000. If you try to make that up in volume and sign up another 9 million customers, you're now losing $5 million.

Re:Easy Fix

[natehoy]

So (honest ignorant question) can you leave web-based apps running in the background now? Can you pop over to your email and listen to music on a web page while the music continues to play?

Or would an iPhone become ONLY a music player when running last.fm or any other web site that streams music?

I was under the impression that this was the big difference between "apps" and "web apps". But I only own an iPod Gen 2, so my knowledge is at least two generations out of date.

Re:Easy Fix

[Anonymous Coward]

re> 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.
You can't do that, that app would be rejected.

It seems that they want to cut off all competition to their businesses.
Kindle, & the likes who are just reseller would have to drop. Good for IBook
music subscription services would have to drop. Good for Itunes
Video subscriptions (netflix/hulu) would have to drop. Good for Itunes videos & AppleTv

>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%.
30% is usually more than their profits. Amazon, Kobo etc makes 30% tops, usually closer to 5-15% (http://quatermain.tumblr.com/post/3345687143/why-are-vendors-annoyed-by-this-iap-thing)
Music subscriptions revenue is usually 5%, so giving 30% away would mean being 25% in the red. 25% of constant loss doesn't make it worthwhile at any scale, in fact, the higher the scale the worse it would be

Re:Easy Fix

[Anonymous Coward]

Here's the easy fix. Ditch your app and make a web-based app.

Correctomundo!

If you have the talent to build a web-based subscription service, then you have the talent to build a web app.

Apple has been losing market share to Android so who really cares if they want to make themselves a much less attractive platform.

The problem is: the magazines that keep reporting this don't even believe it themselves.

Re:Easy Fix

[BassMan449]

Safari's had the ability to play music in the background for a while. It could do it before any other apps could. The only problem is I think it has to be a stream that quicktime understands as that's the only possible player Safari will support. I know that's how the game audio for the MLB app worked. You clicked a link in the app and it would switch to Safari for the audio. Then you could exit Safari and it would keep playing.

Re:Easy Fix

[Anubis IV]

Actually, they've both been gaining market share. Android has outgrown iOS in the smartphone market (but not in general), but most of that growth for both of them is at the cost of Nokia and others.

Re:Easy Fix

[vux984]

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%.

No. Its not. That's the issue.

If I write a small app with a subscrption and generate 2,000,000 in sales, and have 1,600,000 in expenses, I'm making a modest but respectable 400k; enough to live comfortably, and even have an employee or two.

Things are sailing just fine. Apple now decides they want 30% of subscription revenue... that's 600k for processing processing a VISA card through their app store. Directly through VISA I was paying 2.5% or $50,000 annually. So I'm now operating at a 150k annual loss from a 400k annual profit.

That's not profitable. I now have to jack up my prices by like 50% just to cover apple's money grab. Customers won't be happy.

Re:Easy Fix

[Qwavel]

"Here's the easy fix. Ditch your app and make a web-based app. "

Doesn't work. These services require DRM. Apple happens to have blocked the only good way of doing DRM in the browser. I believe that Google is attempting to do Javascript pseudo-DRM to get around this, but I doubt it will be very effective.

Lots of people are saying this is a non-issue and demonstrating it with their easy way to get around Apple's restrictions, but I suspect that Apple already thought of all these easy work-arounds. Apple is building the walls of their garden very carefully.

Re:Easy Fix

[tlhIngan]

If I write a small app with a subscrption and generate 2,000,000 in sales, and have 1,600,000 in expenses, I'm making a modest but respectable 400k; enough to live comfortably, and even have an employee or two.

Things are sailing just fine. Apple now decides they want 30% of subscription revenue... that's 600k for processing processing a VISA card through their app store. Directly through VISA I was paying 2.5% or $50,000 annually. So I'm now operating at a 150k annual loss from a 400k annual profit.

That's only if all your subscribers are through the iOS app. If you have subscribers through your website, and they download your iOS app so they can access your service on their iDevice, Apple gets $0.

The people who are using last.fm probably subscribe through last.fm's website, and paying last.fm that way, in which case the iOS app is a mere convenience.

Apple's demands of 30% only take effect if the iOS user subscribes through the app. If the user is an existing subscriber, nothing changes.

What I want to know is - there's a TON of apps in the app store that require subscriptions, but they require previous subscriptions (i.e., "to use this app, you must already be a memory of blah"). Does this affect them? If not, there's the solution - don't allow users to subscribe through the app - they must have an existing account.

Re:Easy Fix

[vux984]

Apple's demands of 30% only take effect if the iOS user subscribes through the app. If the user is an existing subscriber, nothing changes.

Yes I know all that, but then you are faced with a conundrum... you can't charge more on the app store to cover the users who go that route.

And you can't afford to take a loss on the customers who go that route... so you effectively have to raise your prices to cover your losses on the app-store buyers... the more people that use the app store the higher prices go.

Meanwhile those that do not use the app store are effectively subsidizing your losses on those who do... just as a business owner has to raise his prices to cover his losses to shoplifiting and theft.

And that's pretty much the perspective I have on apple: theives.

What I want to know is - there's a TON of apps in the app store that require subscriptions, but they require previous subscriptions (i.e., "to use this app, you must already be a memory of blah"). Does this affect them? If not, there's the solution - don't allow users to subscribe through the app - they must have an existing account.

In what world is erecting an arbitrary barrier and an unnecessary inconvenience to your customers a "solution".

Apple Stuff

[certain death]

It would be an easy fix. Stop producing software/services for the iXXX devices. The fact that you couldn't get certain software on Macs kept them from catching in the past.

Providers and producers

[Anonymous Coward]

If you are a content producer without an online subscription service Apple's deal probably isn't that bad, I've seen some comments on the web that suggest it is similar to what you would get with physical media. Of course Google 10% offer sounds a lot better, and if Apple had picked 10% this wouldn't be news worthy.

The problem is if you are a content provider, you and Apple want the same slice of the pie, and Apple wants a bigger slice than you are already getting.

Apple has been struggling to get a deal with the content providers to do its own streaming/subscription service and hasn't been able to agree terms with the content producers. If Apple can't have this on iProducts then perhaps it doesn't want anyone else to.

What Apple is Doing is Terrible

[MogNuts]

I hate that people are already saying "well don't buy it" or "don't use it." Here is the reality of what happens in the REAL world:

a) Company pulls out of the market
b) Company raises their prices, in some form or another, to cover the cost. Consumer loses. Consumer pays more.

The winner? Ding ding! Answer B. That's what happens. So thanks to Apple, instead of paying, what $3 that Last.fm charges, they'll charge more. It could be $5. Or they could raise it to the competitors like Zune which is $10. I wouldn't bat an eye to pay for $3 for music a month. For $10, I might shop around first and potentially they might lose a sale.

And here is an even bigger problem. That cost will be raised for everyone else too. So you got an Android phone because you don't support Apple being an evil company? Too bad. It's $10/mo for Last.fm no matter what.

And wait, it gets worse! It raises the traditional pricing level for that product. It seems everyone is either in the $3/mo tier, $10. But at least you have a choice. But when Last.fm charges $10 because they can't make it at 3 with Apple's blatantly rip-off policies, now the norm will be $10. Thanks Apple! Now you have no choice--everyone pays $120 per year instead of being able to choose one that's $36 per year.

But alas, I'll get flamed and modded down to hell for this. I really think they enjoy the useful things at reasonable prices being ruined and they like to say "thank you sire, may I have another?"

Re:What Apple is Doing is Terrible

[Anonymous Coward]

Exactly. Not to mention that Apple entering the same market can steal it away by always pricing 30% lower than the competitors. It is one thing to have had this policy in place from the start, its another to put it in after these companies created the market. It really is dirty play on apple's part.

Re:What Apple is Doing is Terrible

[im_thatoneguy]

In defense of Zune's $10 vs LastFM's $3 Zune gives you 10 free DRM free MP3s per month and you can listen to the music offline.

Re:What Apple is Doing is Terrible

[MogNuts]

That's a pretty good deal. Didn't know about that.

As a side note, I do think Zune Pass is a very good service. I was just throwing it out for illustrative purposes. Though $3/mo for unlimited music streaming is pretty incredible though. I wouldn't want that gone, you know?

Re:What Apple is Doing is Terrible

[dwightk]

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

I missed the part where you showed why they would jump to $10

they'll charge more. It could be $5. Or they could raise it to the competitors like Zune which is $10 ... It seems everyone is either in the $3/mo tier, $10

It seems to be somewhere in there, but I don't think you fully explored that thought.

Re:What Apple is Doing is Terrible

[Anonymous Coward]

The reality is that Apple is in business to maximize value to their shareholders, not create a system that allows consumers to get whatever it is they want as cheap as possible. And I will say it: "Don't buy it". You will buy it, and Apple knows you will buy it, and that is why they can do this.

Re:What Apple is Doing is Terrible

[MogNuts]

Exactly. Which was my point. The jerkoff at the playground is ruining everyone's playground.

That's why we as consumers should just not accept it, complain, not support the company's actions, evangelize to others about the evil policies, not purchase the products, create awareness in the media as to the awful repercussions, ad nauseum.

Re:What Apple is Doing is Terrible

[Anonymous Coward]

Hmm now i am con fused 30% of $3 is 0.90 cents. So essentially they need to make up 90 cents.
30% of $4 is $1.20 this still leaves a deficit of 0.20 cents on their overall profit.
They would have to change their price to $4.30 or so across the board to maintain the same amount.

Re:What Apple is Doing is Terrible

[VGPowerlord]

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

To restate what you said:
Conjecture: Last.FM is making it on $3.
Assumption: Last.FM needs to make $3 to break even.
Hypothesis: Raising the price to $4 will more than cover the 30% Apple fee.

So, here's the math:
$4.00 * 30% (or 0.3) = $1.20

$4.00 - $1.20 = $2.80
$2.80 $3.00

So, it looks like your hypothesis was wrong.

This is intentionally ignoring that not all Last.FM customers will be using iOS devices... but unless you what percentage are, any other data is useless.

Re:What Apple is Doing is Terrible

[Jumperalex]

[quote]And here is an even bigger problem. That cost will be raised for everyone else too. So you got an Android phone because you don't support Apple being an evil company? Too bad. It's $10/mo for Last.fm no matter what.[/quote]

Who says? AFAICT the terms only say they have to charge the same price for subscriptions on the iOS regardless of source. Where does it say in the terms that a service has to charge the same price for apps operating on non-Apple devices?

Re:What Apple is Doing is Terrible

[geekoid]

no, you can't necessarily just raise the price. If you break the price point you loose too many subscribers.

Apple also demands that there price be equal or cheaper then then any price you offer elsewhere. So you need to raise the price to all your customers, not just iPhone users.

Re:What Apple is Doing is Terrible

[geekoid]

That assumes consumer follow along. Maybe they will, and maybe they wont.

Of course, I can go without last.fm

Re:What Apple is Doing is Terrible

[lgw]

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

Math fail: They'd need to charge about $4.30 to make the same profit (a 43% price increase). The GPP was worried that there doesn't seem to be a price tier between $3 and $10, so they might just jump to $10 (and possibly add other features to justify that). If you like the $3 products over the $10 products, that would be annoying, but I'm not sure how true that is.

Re:What Apple is Doing is Terrible

[dwightk]

assuming 100% of their subscriptions come from iPhone apps

Re:What Apple is Doing is Terrible

[dwightk]

you are right. If last.fm is selling all their subscriptions through iphone apps they will have to raise the price more than $1.

It is still less than $5, and much less than $10

Re:What Apple is Doing is Terrible

[Anonymous Coward]

Well, you did pull some interesting math tricks there, conflating $3 into $10, a more than 300% price increase to cover the cost of a 30% price increase. But there's more to it than that... Let's say Last FM sells 25% of their subscriptions though IOS, and the rest through other delivery means. They've got to raise the price across the board to cover the increased cost of the IOS support (because they can't charge more on just that one platform, according to the rules). So that means, they have to raise prices 1/4 of 30%, or roughly .25 cents. If you could afford $3 a month, I bet you can afford $3.25. Feel better now? Or do you need to lie down?

Re:What Apple is Doing is Terrible

[dwightk]

Assuming they sell 100% of their subscriptions through iOS apps

Re:What Apple is Doing is Terrible

[natehoy]

I agree with you that $10 is simply exaggeration, but you're a tad low.

if last.fm is making it on $3, they can raise their price to $4 and more than cover the 30%.

OK, so let's assume last.fm is making money at $3. Apple wants 30% of whatever last.fm makes, which comes off the top. Apple is not serving any music, they are just hosting the installer for the app. This means that paying Apple 30% merely gives them access to the iOS universe. It's not saving them any of the costs they are currently incurring to reap a profit at $3. So they still need to make $3 a month off each customer to make it worthwhile. I'm assuming, of course, that Apple isn't doing the hosting and paying all the streaming-media fees.

If Apple wants 30% off the top and last.fm went to $4, Apple would take 30% of $4 which is $1.20. That leaves last.fm with $2.80. $2.80 $3.

Last.fm would have to go to about $4.50 just to make the same money they do today.

But, here's the real kicker, last.fm has to start charging EVERYONE $4.50, because Apple terms state that you cannot charge a different amount for your service than you offer for it in the App Store. Now, last.fm is making more money off the non-iOS customers, but they'll also lose customers over it, and they have to offer the same deal to iOS customers that they do to their own direct customers, so Apple will quickly become a "lost leader" or their least profitable division.

Then Apple comes out with a profitable subscription model that is 30% cheaper than yours, and drives you out of the market completely.

Whenever you get into a relationship with a vendor that dictates your pricing in channels other than their own, you really need to consider whether the resulting loss of control over your own pricing structure is really worth it. Generally, that vendor has an interest in undercutting you at some point after he's milked you long enough.

Re:What Apple is Doing is Terrible

[natehoy]

Damn Slashdot and its hunger for simple mathematical signs in the name of anti-HTML.

$2.80 $3.

That should read "$2.80 is less than $3"

Re:What Apple is Doing is Terrible

[Em Adespoton]

This is why bed manufacturers manufacture a "different" bed for each retailer. No reason Last.FM couldn't do this too -- have a different subscription service if you want to use the stream on iOS as well as other places, and jack up the price 30%. It's not the same service they offer to others, so Apple can't complain.

Re:What Apple is Doing is Terrible

[dwightk]

that's also assuming that the 30% isn't covering some service that the iTunes store is providing that they are paying now anyway, like credit card processing.

Re:What Apple is Doing is Terrible

[Anonymous Coward]

Actually, 30% of 4$ is 1.20$. So, for Last.fm to make 3$, they actually have to charge 4.29$ (because you can't charge 4.28571$). So, just because 1$ is 33% of 3$ doesn't mean that Last.fm sees that last 3% because, of course, Apple has to get their 30% of that extra dollar.
 
And, just FYI, the basic equation is this: X = Y * Z, where X = 3, Y=0.7, and Z is the unknown for which you are solving.

Re:What Apple is Doing is Terrible

[agendi]

This is at the heart of the issue. I personally know 3 different devs that have now halted building their apps for idevices, even the ones that weren't intending to build in a subscription model in the first iterations (if at all) are saying its too risky because if Apple are willing to do this what will they change next? In my conversations with them they all seemed pretty unwilling to hand over yet another business lever to Apple. They are switching to msites and android now.

Re:What Apple is Doing is Terrible

[517714]

I don't have an iPhone, iPod, or iPad, and I do not like the idea of being charged $4.00 instead of $3.00 because they raised the price for all their customers so Apple could skim 30% from iPhools. How would you like it if your cable bill went up 30% because the manufacturer of your TV wanted a cut? You use your car to get to work, how about paying 30% of your wages to the auto maker?

I don't want to pay Apple 30%! Is there an app for that?

Re:What Apple is Doing is Terrible

[beamdriver]

They're just figuring this out now?

Developing for IOS has been a crap shoot from jump street. Apple has always retained the right to deny an app access to or remove it from the App Store for any reason...or for no reason at all. You could easily put a ton of time, money and energy into developing an iDevice app just to have Apple slam the door in your face without apology or explanation.

There's a lot of money to be made by working in Apple's walled garden, but the risk that you piss off the beast and get eaten has always been there.

Re:What Apple is Doing is Terrible

[natehoy]

OK, fair point there. If you're a small shop accepting micropayments of 3 bucks, Mastercard and Visa can be pretty ruinous about it. Apple has enough swing in the market to take advantage of a better fee structure.

Re:What Apple is Doing is Terrible

[martin-boundary]

The other thing you forget is that each time the price is raised, the number of customers drops. So even if you raise the price from $3 to $4.30 thinking that things will be the same, the total profit will be less than before. If you raise it to $5 or $10, it will be dramatically less.

Re:What Apple is Doing is Terrible

[MogNuts]

Where do you think they'll get the money to offset this huge income loss?

You do know that anytime a business pays more, they pass that cost along to you, right? The only reason it's not easily apparent is because they'll have their army of pricing analysts figure out a way to charge you for it without you noticing or complaining too much, if it's at all possible.

Re:What Apple is Doing is Terrible

[MogNuts]

That's great, right? Nevermind the fact that Apple then will kill off another business, but how many options are left on iOS?

Mog
Rdio

That's it*. Yea, real smart. Kill off 1/3 of your choices. And this is a really useful product--I would argue too useful for Apple to kill off. It's not bullshit like Apple killing off a flashlight application developer.

* Pandora doesn't count. It doesn't let you choose what you want to listen to specifically.

Re:What Apple is Doing is Terrible

[MogNuts]

That's a really nice theory. Except you forget this is the real world.

In reality, they will just say screw it--let's raise our price to all our competitors--$10/mo. Why do you think most things cost comparable to each other? It's the traditional price expected and set.

And I think you're the one who is going to need to lie down, because the math is a *lot* more complicated than that. In *reality*, unlike your simple 1 set equation, they have teams of pricing and marketing analysts, who will figure out the exact new sweet spot for the price. So no, it won't be 3.25. And I won't pretend to know the know the new price because I actually have some sort of business sense and know that I can't just add 1 thing and get a new number.

Try again.

Dead Man Walking

[Anonymous Coward]

Steve Jobs is the new Gordon Brown. Dead man walking. Steve Jobs authoritarian management and milking of iTunes is just like Gordon Brown's stubborn refusal to recognise that innovation starts with the people and relying on tax revenue from banks makes for an unbalanced economy. Nobody in Apple has the balls to stand up for him, and the overly expensive hardware and refusal to sell OS X to the masses is just trampling on peoples aspirations. Steve Jobs is making Microsoft look good like Gordon Brown snatched defeat from the jaws of victory by making the Tories look good. Unless Apple get this they're going to drive themselves into the ground just as hard as the Labour party did.

Speaking of music on mobiles

[Taedirk]

It's funny because Last.fm just started charging mobile users.

Not a monopoly.

[RightSaidFred99]

I hate Apple in general, but this is monopoly crybabyism brought to a whole new level. They don't have close to a monopoly in anything, and the iPad is only a few years old ffs.

If you don't like Apple's policies, don't sell your software for their shitty products. Instead of whining about Apple, I just ignore them.

Re:Not a monopoly.

[MogNuts]

Your employer: "we're reducing your pay by $10,000"

You: "But I'm just barely paying my rent now."

Employer: "Too bad. Deal with it. Besides, you do have that option. Instead of whining, you can quit and go hungry AND we will tarnish your professional reputation."

You: "But that isn't really a choice!"

And then the realization hits you.

A company like Last.fm, or just about any company for that matter, doesn't have the option of not selling its software to a platform that is pretty much the other biggest half of the market and in an explosive growth market in general.

Re:Not a monopoly.

[Revotron]

I don't see anything illegal in an employer cutting your pay by $10,000. Does it suck? Yes. Is it illegal? No. Just say "Fuck you" and go get a different job. Slandering an employee, on the other hand, is illegal. But other than attempting to inciting needless emotion in your readers, how the hell else does slander factor into this story?

If Last.fm doesn't like Apple's pricing policy, they can get the fuck over it and take their toys to a different sandbox. Because unlike a monopoly, nobody's *forcing* you to use the iPhone and nobody's *forcing* them to provide content through the Apple App Store.

I would love to see more people switch to Android over this policy change. Android needs a broader market base. What I don't love is people bitching about this. It's business, grow a pair and take your money elsewhere.

Re:Not a monopoly.

[hey!]

If you don't like Apple's policies, don't sell your software for their shitty products. Instead of whining about Apple, I just ignore them.

Sure, but Apple isn't ignoring *you*.

What Apple has done here is dictate that you will be governed by Apple pricing policies *even in transactions Apple is not a party to*. If you're a consumer using an alternative store, Apple says you must pay more for certain content than either the publisher or store wants to charge you. As a publisher who has no intention of selling through Apple, you must sell through stores whose success is limited because Apple forbids price competition on many popular products.

There's a very simple test one can use to tell whether a company is a monopolist. It boils down to one question: can the company get away with acting like a monopolist (absent any legal intervention)? If the answer is yes, then you have a monopolist.

What do monopolists do? Well, eventually they get around to charging high prices for shoddy goods, but in the short term what they do is they solidify their control over the market by erecting barriers to entry. Preventing product from being sold at lower prices through other channels is a barrier to anyone developing more price efficient channels.

So by the "walks like a duck" test Apple enjoys a monopoly in the area of selling content for tablets. That's seems like a very tenuous monopoly, a brief blip in the early history of this infant market ... but that's entirely the point. The market *won't* develop if the first mover uses its otherwise temporary clout to prevent the emergence of competitors.

Re:Not a monopoly.

[benbritten]

"a platform that is pretty much the other biggest half of the market and in an explosive growth market in general."

this is the crux of it tho. Apple provides more than just a payment processing system. they provide access to 100+ million users who can pay with a single click, and more importantly have shown their willingness to do so.

This is what they are charging 30% for access to.

Up until now these services have been getting a free ride, and they all know exactly how valuable access to that market is worth. They are absolutely willing to pay to access that segment, now we are just seeing the beginning of the negotiations.

Apple says 30%, all the companies reply with 'we cant afford that .. waaahhh!' . some will even pull their apps. In the end, both Apple and the app developers will find some equilibrium. (ie if enough people pull their apps, or the Last.fms of the world can foment enough bad public opinion then apple will lower the cut. If Last.fm and Rhapsody pull their apps, I pretty much guarantee that someone who can make money from those 100million users will fill their place.)

this is how business works. if you want a prime retail location, then it will cost you premium fees, and you make it up with greater customer traffic.

so a better analogy might be:

each paycheck you get $1000. you can keep that (ie not put your app on the iDevices)

or instead each paycheck will be $700. but you will get three times as many paychecks.

Which one do you choose?

Re:Not a monopoly.

[vux984]

each paycheck you get $1000. you can keep that (ie not put your app on the iDevices)

or instead each paycheck will be $700. but you will get three times as many paychecks.

I was generally with you up until this, because it misses the issue. They aren't taking 30% of the PROFIT. They are taking 30% of the REVENUE.

Each subscriber they take has a cost associated with it. Suppose for each sale that generates you a cheque for 1000 you had expenses of 800, and profit of 200. That much more closely models the situation here.

Apple taking 30% of revenue, means you get a cheque for 700. But your expenses are still 800. So now you are in the hole. Getting 3x as many customers just puts you 3 times deeper into the hole.

If apple was taking 30% of the profit, they could swallow it. But very few markets can really afford a 30% swipe at their REVENUE.

Here's a final comparison:

Apple itself in Q4 had 20B$ in revenue, and $4B in profits. If someone took 30% of Apple's revenue, it would have gone from 4 billion in profits to a 3 BILLION DOLLAR LOSS last quarter. Its shares would be tanking in that sea of red ink.

That's what siphoning 30% off revenue does to a company.

Re:Not a monopoly.

[Anonymous Coward]

That's cuz your example was to unwieldy. My Urine cost 1$ to make. Daily Shipping: 1$. Profit:1$. A total of 3$
Apple comes in and rakes 30 percent. They are taking 33c off production,shipping, and profit. That's 99c. Even if I raise it to 4 bucks. 1.33applecut. 66 prof. 4$price cost2$
1.66applecut 99prof 5$price cost2$
30(1+cost/profit) is apples percentage of your profit. You have to charge over 100% margin over cost in order to get a 30% cut of your own profits. Unless apple foots the distribution costs this can't work.

I think apple knows this and that's why those north Carolina servers are there. Apple isn't going into the subscriptions business. They are going to the distro biz. Like amazons s3 service.
It's 10c per gb to store. 10 c/gb to transfer it in. And a penny per list and get request. For small Publishers who don't have the volume for bulk rates, it is a pretty good deal. It's not as good for Sony or amazon who prolly have their own infrastructure in place. People say Netflix would have problems but not of they moved their entire operation to iServe.

Predatory Business Practice?

[l0ungeb0y]

Charging 30% of the price of the app you developed with XCode and Objective-C both of which were developed by Next then Apple and which is then sold and promoted by the iTunes Music Store is one thing.

Charging 30% of all the money you make offering subscriber content seems exorbitant and could be argued as being a predatory business practice. Personally, I believe many others will see it this way and we will see this matter in court before too long.

In the end however, I think Apple's alienation of low-margin subscriber services such as Last.fm, Rhapsody and others will only make the Android platform stronger.

Re:Predatory Business Practice?

[Gorbag]

I think they're charging for bringing in new subscribers, not offering someone else's content. How is this different from the cheap subscriptions repackagers sell for which the publisher gets $0 but the name of a new sucker to send renewal notices to? Most magazines and newspapers sell their wares for the cost of physical publication, and make the money for content and profit from ads. That argues the eventual subscription price will be $0.00 for which Apple's 30% cut will not be an issue.

This is just down right ridiculous.

[Desmoden]

The Music industry for EVER has been one of the most corrupt, evil businesses in the world. The only way to make money as an artist is to tour. Record sale profits are a joke.

Apple "piece" of the pie is nothing compared to what record companies do.

In a few years all the record companies will finally DIE. Artists will create/produce music on their OWN in their HOMEs or at private studios (for a fee). And then sell them DIRECTLY to customers via download servers like iTunes and others. Apple and any other company that hosts and shares this music deserve a piece, say 30% or something. And the rest needs to go to the ARTIST.

The only reason this sucks is because the download company (in the case Apple) and the Artists are fighting over the scraps the Record labels leave on the ground.

Once it's just ARTIST->Digital-Distributer->User this will balance out and start to be somewhat fair.

This Last.fm guy is just bitter that his business plan isn't working.

It's not like Apple locks the music. You can take anything from iTunes and do whatever you want with it. It's YOUR music.

Don't bitch, evolve.

Re:This is just down right ridiculous.

[eparker05]

[quote]Apple and any other company that hosts and shares this music deserve a piece, say 30% or something. And the rest needs to go to the ARTIST.[/quote]

The content of your comment implies that you didn't read the article. This article isn't about Apple getting a 30% margin of music sales, nor is the article about record companies getting too much money. Services like last.fm, pandora, and netflix purchase the rights to content from the record companies and repackage the content for streaming. They are the middle man, albeit a very visible, important, and useful middle man.

Apple's 30% revenue theft doesn't effect the record companies, it effects the service providers that we rely on. I use Pandora One on android and I'll be damned if I'm going to pay 30% more because some Apple exec thought they were entitled to 30% of Pandora's gross revenue. Pandora cannot afford the 30% loss in income; the cost of content is fixed. They really only have 2 choices, raise their price for everybody, or ditch iOS.

Also, a note on nomenclature. Many people in the media are calling this an "Apple tax"; this is incorrect. Tax is a percentage of profits. Apple's 30% is a cut of the gross revenue of a service. Many businesses could afford a 30% reduction in profits, but for the vast majority of businesses a 30% reduction in gross revenue translates to a greater than 100% reduction in profit.

ION: Users Criticise LastFM Over Featureslack (TM)

[Barryke]

In other news: Users Criticise LastFM Over Featureslack (TM).

They have been dropping feature after feature. I payed to use those features thus i unsubscribed.

Not good enough

[alvinrod]

If I'm going monthly, I want everything.

Their catalog isn't really any worse than iTunes, but that's not good enough. Neither iTunes or Amazon have everything I want and Amazon doesn't usually disappoint.

On a side note, if anyone knows where I can get a digital copy of Z-Rock Hawaii I'd be more than willing to provide some business to them. None of the major online stores have the album and I haven't found it on any of the streaming sites either.

Maybe it's just me, but I'd rather own my music (DRM-free of course.) so that I don't need a net connection in order to listen to it. A lot of bands have been offering samples of their music for free, whether it's through YouTube videos or through their official site. Paying for a subscription seems like a waste. Honestly, having your music freely available online makes me more likely to listen to it and consider buying it. It's not that I want free so much as I'm just lazy. If you make me jump through too many hoops I'll just find something else.

Re:Not good enough

[lgw]

I doubt NetFlix has lost even a dollar in subscription fees from geeks ripping copies of rented discs (distributing those copies is a different matter). I doubt allowing you to make copies of subscribed songs would cost the provider a dollar (distributing those copies is a different matter).

Subscription seems to be the future, because it can be carefully tuned to extract the maximum from teenagers, as long as offline play worked well enough for that market.

Re:Not good enough

[MobileTatsu-NJG]

Maybe it's just me, but I'd rather own my music (DRM-free of course.) so that I don't need a net connection in order to listen to it....Paying for a subscription seems like a waste.

That makes me wonder if you have cable or satellite. ;)

But yeah, you're not alone. I think we have different perspectives on this, though. I see it as 'on-demand entertainment' (like my subscription to Netflix) and, apologies if I'm mistaken, you see it as "music I can't keep". I have trouble finding music that suits me. I like rummaging around trying new stuff, and I have to hear it a few times before I really decide if I like it or not. I'd either have a smaller library or I'd have wasted a lot of money purchasing songs I don't like to get to that point. Maybe if I had knowledge of the future, I might have been able to save a few bucks just buying the songs. If you include the time taken to maintain a library of music, I'm not even certain about that. What led me to even look at a music subscription was a hard drive crash that wiped out gigs of music I had to re-assemble from partial backups.

But yeah, there's also the matter that in my daily work life I'm in front of a computer all day. When I get home, and I'm at a computer. And, on top of both, I often work from my laptop. I used to maintain a music collection across all three machines and I *hate* it. I don't like shuffling that many gigs of data around. I don't like not having that one song I really want to listen to. I don't like not having music when I go to a new machine. And I can't rely on an iPod because I have to have listen to audio coming from the computer. I think I have a not-so-common set of circumstances that makes a music subscription ideal for me. Heck, I can even queue up some comedy albums for when I'm working on painfully tedious projects.

I don't think music subscriptions are for everybody but I do think they're not really properly considered, either.

Re:Not good enough

[murphtall]

i use audiogalaxy dot com (i am not affiliated, just like'm) to stream my music to iOS/Android devices and any web browser anywhere. works great. no sub required. i gotta have my home machine on, but it was anyway to serve my books to stanza and video to apple tv. my music collection is over 130k songs and no hitches. and i have 4 people using my log in. just saying. it doesn't have to be difficult. Listening to a large collection of music across devices and platforms can be, but using the aforementioned tool, it doesn't have to be. HTH

Re:Not good enough

[Wild_dog!]

http://www.gemm.com/c/search.pl?field=ARTIST+OR+TITLE&wild=Z-Rock+Hawaii&Go!.x=0&Go!.y=0

Gemm.com.
great site to find any old strange records.

The problems are....

[gstrickler]

There are several flaws with Apple's new subscription model. According to Apple's =press release:

“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,”

In theory, I agree, and so would most publishers. However, Apple's model doesn't operate that way:

1. Not all purchases made through an application are new subscribers, it may be an existing subscriber who is renewing. As the policy is written, Apple would still take 30%
2. Apple handles renewals, including automatic renewals for all subscriptions purchased via Apple. This means that Apple actually making the subscriber a customer of Apple, not a subscriber of the content provider. That's true even if it's an existing subscriber who renews via Apple. That is not how existing subscription models work, if you sell a new subscription, you get an one time commission, and all the renewals are handled by the publisher with no additional commission paid.
3. The publisher is prohibited from providing a link to their own online subscription signup/renewal from within an application they wrote, and the MUST provide a link with all the same subscription options within the app. All those must go through Apple, even if it's for an existing subscriber.
4. Even though the customer owns the iOS device, the publisher wrote the application, creates the subscriptions, and delivers the content, they are prohibited from making it convenient for customers to deal (or continue to deal) directly with the publisher from within the publisher's own application. In most cases, Apple isn't even hosting the content or providing the bandwidth for delivery. In short, the only way Apple might be involved is that they made (and sold) the iOS device, and is in accepting a payment (and only because of a policy that prohibits the publisher from making it easy for the customer and publisher to do business directly with the publisher). That's not worth 30% by any measure.

The policy as written is completely inconsistent with nearly all existing subscription business models, makes it easy for Apple to "steal" existing subscribers and take 30% of the subscription fees, and makes it more difficult for existing subscribers to subscribe or renew with directly with the publisher. It's completely inconsistent with the stated intent and philosophy. If not corrected, it will dramatically reduce the available of non-iOS specific content services such as Netflix, Pandora, Last.FM, and Rhapsody on the iOS platform. Fix it now Apple.

Re:The problems are....

[gstrickler]

Somehow the link to Apple's press release didn't make it into my post.

Re:The problems are....

[Anonymous Coward]

Not to change subjects, but it just occurred to me that if apple is taking 30% of a 1$ song, and the transaction was done by credit card... how good a deal did Apple get with the payment processors?

Typically speaking, an etailer would be paying twentyfive cents per transaction and then something like 1-3% of the sale.

Oh well, that's just another example of apple's bargaining power.

Re:The problems are....

[gstrickler]

Well, start with the fact that Apple doesn't immediately bill for each song. Buy 4 songs in one day, and you'll see a single charge for all 4 songs, even if you bought each one a different times throughout the day. Then, understand that many people use iTunes cards or PayPal rather than a credit card. My guess is that cc transactions for a single song is a very low percentage.

Re:The problems are....

[Anonymous Coward]

Personally, I'm a bit put off by the rather arrogant assumption that "customer wants to subscribe using his iDevice" == "APPLE MADE THAT CUSTOMER SUBSCRIBE"

Really?

[pak9rabid]

Apparently not one to mince words, Last.fm founder Richard Jones lambasted Apple for their recently announced App Store subscription rules. 'Apple just ****ed over online music subs for the iPhone,'

Really? Because di.fm sure doesn't seem to have any problem getting my subscription fees. Oh and look...I can even use my subscription service on my phone via the di.fm iPhone app.

Re:Really?

[TrancePhreak]

The new rules take effect for old apps in June, not now. Old apps that don't follow the rules will likely be pulled.

Re:Really?

[Anonymous Coward]

There's every chance that DI.FM can't afford to lose 30% of their revenue to Apple, so you could see the price go up by over 40% (Hint: In order to get the same revenue, $4.99/month, they will need to increase their price to roughly $7.15/month, which is an increase of roughly 43%). Worst thing is, that could hit me too, despite only using it on Android! Not happy about that.

Musicians and Apple

[rishistar]

Plus don't forget the 30% they take from the artist/label for any music they sell on iTunes as well.

Charge more for a "iOS compatible" subscription

[drtsystems]

I think this is how the problem will be resolved. You can get the same subscription you always got on the website but it is not compatible with iOS devices. You can buy, for 30% more a subscription that is compatible with iOS (and of course that 30% goes right to apple). That way you are still charging the same on your website as you are using Apple's subscription service, because the product is "iOS compatible subscription."

In any case, this is horrible for iPhone users. Either companies pull out of iOS or they charge 30% more. Clearly these start-up music streaming services don't have the kind of profit margins to give away 30% to apple. 5-10% I can see (considering Apple is footing the bill for App download bandwidth, store space, etc.). But 30%? Thats insane.

Boycott

[guspasho]

As a consumer, either way I'm screwed because I have to pay for streaming now. So I say fuck it all, I'll just download everything I want to listen to and instead spend my money on shows when my favorite bands come to town. Most artists make most of their money touring anyway, don't they? Support the artists, not the industry.

IF Apple

[geekoid]

charges a fee to music services that it doesn't pay for it's own music service, they will face Anti-Trust.

Re:Americano=big talking MacFag (with no CSC degre

[Americano]

APK = OFF TOPIC TROLL. Enjoy the downmods, now I understand why you're too chickenshit to sign up for an account.

Re:Average Song

[TaoPhoenix]

So don't buy average. Buy superior.

I separate music into something like two classes. For the best of the Big Music companies, the song is worth more way than a dollar. I only really churn about 200 songs. I'd pay for those.

Then for "misc music" go to the indie / netlabel side.

What's the Goal

[mpapet]

I imagine the goal of what's left of the music industry is to retain some semblance of control of distribution. That's how they over-charge consumers for their content.

The entertainment oligopoly wants this deal. It marries content playback to hardware. This is a way to regain control of digital distribution and extract way more money out of consumers than a LastFM.

Not sure if troll....

[Anonymous Coward]

This infographic suggests that selling an album as download costs the seller about 4$, while a self-pressed CD would be 2$ (both selling at 9.99$, the one giving the label 5.35$ and the artist 0.94$, the other giving the label 0$ and the artist 8$). Seriously?

An Apple a day...

[ideaz]

keeps slashdotters going! sigh.

Really????? Pot Kettle Black last FM...

[Anonymous Coward]

Really? seeing they just pulled the plug on their free streaming service (Last.fm) if you aren't using a computer but any smart phone, Roku, etc. you now have to pay (but was free previously), but computer desktop users do not have to pay? Isn't this a case of Last.fm calling Pot Kettle Black? (http://blog.last.fm/2011/02/07/lastfm-radio-becomes-a-premium-feature-on-mobile-and-home-entertainment-devices)

When they announced that I closed my account forthwith...

They should be the last people bitching at (cr)Apple Or am I missing something here?

Musician...

[kitsunewarlock]

I don't think Musicians should be able to make a living performing music. It should be a hobby--something to do that's more productive than watching TV or writing thousands of posts on Slashdot. It takes a lot of time and effort to release a single album--but not so much that you can't supplement your income with other jobs. Or doing concerts/tours/charity events/something-other-than-selling-digital-copies-of-your-music. Which most artists do anyway.
This is coming from the son of a musician father and dancer mother who were lucky enough to be able to become agents in the industry instead of pursuing careers as "artists". This is also coming from an artist who was lucky enough to be able to enjoy expressing myself doing commercial works like UIs, websites and ads.
That being said: even if these musicians only get minimum wage, they are getting more doing their creative and expressive hobby than most at-home tabletop game developers (especially since most wind up just giving their game away since its so expensive to publish).

Re:Americano LIED about having a college degree? L

[Americano]

COOL STORY BRO!

Re:Americano caught in his lies? How embarassing!

[Americano]

LOL

Re:Americano the bullshitter cant back up his b.s.

[Americano]

No I will not touch your penis. Stop asking me to.

Re:Americano embarasses himself, again? LOL!

[Americano]

What's with calling me a "fag" anyway APK? I wish you'd stop projecting your desires onto me. It just makes you look pathetic and desperate. :(

Re:Americano the bullshitter cant back up his b.s.

[Smauler]

Seriously? You're trying to goad an AC with juvenile insults and threats that he'll be modded down?

You're only making yourself look bad here.... AC's always win idiot contests.

Bad analogy

[unassimilatible]

Apple is not Last.fm's employer. They are a company with 130 million credit cards one click away. If you want access to that amazing, unparalleled database, you gotta pay for it, or lump it. Gas, grass, or ass, nobody rides for free.

Re:Bad analogy

[Anonymous Coward]

You keep harping on about 130 million credit cards. You do realise that's only about 10% of the total number of cards currently in use in the USA alone? That is: not a significant proportion.

Do you honestly think that it makes business sense to trade 30% of revenue ( not profit, revenue ) for access to that resource?

You're not a lawyer

[unassimilatible]

You just play one on Slashdot. What's a "predatory business practice"? You can charge whatever you want for something. If you want to allege antitrust violations, fine, explain your legal case. But don't make up legal terms, K?

Who cares if it is inconsistent?

[unassimilatible]

"The policy as written is completely inconsistent with nearly all existing subscription business models "

Who cares? The iTunes credit card database is inconsistent with any other database where publishers can have one-click access to 130M credit cards. If the publishers don't like it, let them get their own database of 130M credit cards.

Since when does Apple do anything consistent with existing business models? It's why Apple makes in a quarter what Google makes in a year. It's called, "think different(ly)." Another reason I'm glad I'm an AAPL stockholder.

Re:Americano the bullshitter cant back up his b.s.

[Ihmhi]

"Never argue with an idiot. They'll drag you down to their level and beat you with experience."

Re:ION: Users Criticise LastFM Over Featureslack (

[Anonymous Coward]

> thus i unsubscribed.

Well, technically your status is now unsubscribed. To achieve this you had to desubscribe.

Un- never indicates an action. That's what De- is for.

I stand corrected.

[Desmoden]

Well said

Re:ION: Users Criticise LastFM Over Featureslack (

[Anonymous Coward]

I unsubscribed because those lunatics thought I would pony up 1/3 of my Spotify subscription price for a damn radio station where I have no control over the tracks played.

Ummm..

[Wovel]

Someone should tell him his company does not actually charge for subscriptions... So yeah..Wow this is weirder than the WSJ Guy, you know the WSJ that makes more off selling through the App store than they do their affiliate program..

This whole thing is a non-sensical twilight zone where people are speaking out on behalf of their own companies which are not negatively impacted by the change. Here's to you mr complaining about Apple to try and get some attention for my company no one cares about..