Last.fm co-founder: Apple just fucked over online music subs for the iPhone

http://downloadsquad.switched.com/2011/02/17/apple-just-f-over-online-music-subs-for-the-iphone-lastfm/

by Uncle_Sam • 15 years ago

271 206 15 years ago

downloadsquad.switched.com

Supermighty3• 15 years ago

I can understand Apple wanting to increase revenues. And even getting a bit of the subscription pie. But this whole thing seem wrong. It feels like Apple didn't really look at the whole ecosystem to see the ramification. Or that they did, but are overly confidant in their platform and reach to be able to force subscribers into this model.

I don't see this ending well.

harshpotatoes2• 15 years ago

Perhaps they're hoping that this will force some of the subscription businesses off their platform, forcing people into whatever services Apple can give through subscription (iBooks, music). And then the businesses that do remain can actually pay. In the short run, I can't imagine users would care very much if they could only get their books from apple and not amazon, and it would probably help Apple lock in users. But, lock-in and anticompetitive behavior probably don't make for a good experience from the user's perspective in the long run... So, maybe they have a different angle.

Supermighty3• 15 years ago

That could be a thought, or goal, of theirs, to push content creators to their platform instead of through Amazon and Rhapsody middle men.

Users will and won't care depending on several factors. I can imagine that hardcore Amazon Kindle users will be pissed that they have one less platform to read their books on.

The Kindle syncs books and your position in the book between devices. It's a value proposition that's hard to beat. Even if you have the same book on your iBooks I think users will get pissed that they have to search to find where they finished reading it on their other devices.

ROFISH• 15 years ago

It's one thing if Apple provides a competing service to Netflix, Hulu, Rhapsody, et al. (And may be accused on monopolism.)

The thing that boils my britches about this is that Apple DOESN'T have a competing service. When the services leave, the iPhone is left only with iBooks and iTunes, both of which are expensive and not very good.

jimbokun• 15 years ago

"In the short run, I can't imagine users would care very much if they could only get their books from apple and not amazon, and it would probably help Apple lock in users."

Have you had any actual users actually tell you this?

Everyone has heard of Amazon, everyone knows Amazon has lots of books, everyone knows Amazon has pretty competitive pricing, and most people who would consider buying an iPhone or iPad have probably also heard of Kindle. Having one device that can read Kindle books and also do a lot of other stuff is part of the current value proposition of iOS devices. If that goes away, it will inform the buying decisions of people in Apple's target markets very quickly.

Just imagine the next Walt Mossberg reviews, comparing Android and iOS devices, pointing out that you can read all your Kindle books on Android, but no longer on iOS. That's not going to immediately affect sales?

Heck, much of Apple's target market may already be hearing this news and taking it into consideration before deciding to buy an iOS device, because they are consulting their geek friends about the decision.

I know you said you think this will happen "in the long run", but I think it could affect Apple's sales much more quickly than you expect.

metabrew• 15 years ago

I'm the one quoted there (RJ). It's worth pointing out that I've not worked at Last.fm for a couple of years, and the chat log (which I posted) doesn't mention Last.fm at all.

That said, I still think my analysis is bang on.

What Apple have done will really cripple anyone reselling/licensing content (Spotify, Last.fm, Netflix etc).

mrseb2• 15 years ago

Author here.

I've put 'co-founder' back into the post's title -- sorry about the ambiguity.

sh4na• 15 years ago

You know, just putting co-founder in the title doesn't actually explain that he's not with the company anymore... it just means founded it with someone else (unless co-founder means someone who founded a company with someone and then left? could be my bad english failing me..)

Retric• 15 years ago

The obvious long term result is Spotify, Last.fm, Netflix etc are going to dump apple. Then a new company will resell Last.fm content at a 40% markup to sidestep the apple rules. Bad PR is then going to force apple to rethink their stance.

However, I expect Apple is going to offer "deals" to the major players.

coffeedrinker• 15 years ago

I think Apple will be happy to have all the music subscription apps go away. They bought lala.com and I expect them to have an iTunes subscription service before long.

eftpotrm2• 15 years ago

I suspect Apple may have to back down over this...

So much of the value they paint of the iOS ecosystem is in the apps - 'There's an app for that' was a large campaign last year. Yet they're now threatening to make a number of their more popular apps economically unviable according to their creators.

In-app payment will mean a new app, no? Which won't get approved if it contains a rant against Apple on that screen explaining the price hike they need to make it viable. Yet the current versions contain links to web-based payment, which would be relatively easy to update to include a page saying 'Apple are thieves' and explain why.

I'm well aware that many / most customers would see such a message, give a stereotyically teenage whatever reaction and move to a competitor, but a good percentage won't and we've seen how fast bad news travels now. Enough providers that customers value enough are now angry enough with Apple to try their luck at this, particularly with a competing platform available and growing without the same restriction, and I wouldn't like to bet on Apple winning this.

extension• 15 years ago

I suspect Apple has something up their sleeve. Nothing stops them from cutting a deal with certain publishers, except maybe accusations of hypocricy. It isn't, but it could be perceived that way.

jokermatt9993• 15 years ago

Perhaps not hypocrisy, but greed and unfairness, yes. It cuts out the folks that Apple doesn't make a deal with an entrenches the major players, simply for Apple to make more profit. That might not be hypocritical, but it's a shitty thing to do.

JamieEi2• 15 years ago

I fear that they will "back down" to something like a 5% cut for certain types of low margin content. In other words something that looks good in comparison but is still completely unreasonable when compared to the 1% that Visa & Mastercard take. Maybe that's even been the plan all along.

Tyrannosaurs4• 15 years ago

The minute that Visa and Mastercard provide a place to sell your stuff and a fulfillment model that will be a useful comparison.

rimantas4• 15 years ago

> Yet they're now threatening to make a number of their more > popular apps economically unviable according to their > creators.

How's that? Or are we again talking pandora and netflix there? In that case I couldn't care less: these are not available in my country, and most likely never will be. Heck, even iTunes Music is not available, only apps.

Now imagine you are a new company just going to start selling subscriptions in iOS app. I'd say you get a lot of convenience with this Apple offering.

As for end user, there is no loss there: just a convenient way to buy subscription with one tap.

All this sounds once again blown out of proportion, everyone is shouting without any effort to really understand what they are shouting about.

JonoW3• 15 years ago

> I'd say you get a lot of convenience with this Apple offering

Question is, is that convenience worth 30%? I'd say most companies wouldn't think so.

jonknee2• 15 years ago

> As for end user, there is no loss there: just a convenient way to buy subscription with one tap.

What about the [potential] loss of apps like Netflix, Pandora and Kindle? Sounds like a pretty big loss for a possible future convenience.

sp332• 15 years ago

It's not just that they're taking 30%. It's that they're disallowing authors to charge any more than they do anywhere else, and then taking 30%. So to make the same amount of money on iPhone, you would have to increase your prices everywhere else.

stanleydrew2• 15 years ago

Seems like you are defending Apple's behavior without any effort to really understand what other people are shouting about.

It's nice that you don't care about Pandora and Netflix. A lot of people do. If those apps were to disappear or mark up their offering by the 40% required to compensate for Apple's take consumers would by definition be worse off.

If Apple's in-app purchasing turns out to be really convenient and worth a 30% cut then that's great for app developers, and they will use it. But I really fail to see how forcing people down that path is at all a good thing.

rst• 15 years ago

That only works if Apple doesn't withdraw the current version of the app from the store --- which they're entitled to do.

The EFF got a copy of last year's legalese and posted it[1][2]. Apple reserves the right to withdraw any app for any reason. (The key language is Section 8, which says that they can pull any app at any time for any reason. For good measure, section 4 says that if you don't accept new terms as they are offered by Apple, they can "suspend or terminate" your use of Apple services, including presumably the App Store itself. Section 12 reiterates. There's also language in there that says new terms won't apply retroactively, but their line here is, I think, that they're only getting more stringent about enforcement of existing terms --- and the other sections clearly state that nothing there limits their rights under section 8.)

[1] https://www.eff.org/deeplinks/2010/03/iphone-developer-progr...

[2] https://www.eff.org/files/20100127_iphone_dev_agr.pdf

dhimes2• 15 years ago

How about if a customer buys an app. Can Apple take it away without reimbursing the customer?

eftpotrm2• 15 years ago

Yes, but that scenario leads to customers going 'where's my app gone?', at which point a percentage of them put the App name into Google and guess what pops out...

jsz0• 15 years ago

That's probably part of the plan. If they had started at 15% there would be the same complaints. They would have to back it down to 10% to appease people. If they start at 30% they can back it down to 15% as a public act of concession. It would not surprise me at all if they selling this to major players as an opportunity to raise their prices and make more money for themselves in the process. If Apple wants 15% prices will go up 20%

narag• 15 years ago

I've already upvoted you, but it didn't feel like it's enough... because the same I did with the person that, a couple weeks ago, predicted that Apple would require prices inside and outside of App Store to be the same.

IOW: good job.

jm4• 15 years ago

I would hope so. My decision to purchase an iPad was based, in part, on the availability of applications that would likely no longer be available if this policy were to go into effect. As a consumer, this feels completely deceptive. For me, the usefulness of the iPad is being arbitrarily reduced, quite drastically, only after I have purchased it. I may not have purchased it in the first place if not for the functionality I am on the verge of losing.

I understand Apple's position and desire to turn a profit, but these actions feel hostile towards me, as the consumer, and leave a pretty sour taste in my mouth. No matter how this shakes out I would be wary of committing to another Apple platform for fear that they will completely change the rules to make it an untenable situation.

I really hope they back down, but if they don't I would gladly join a class action lawsuit against them.

portman3• 15 years ago

Personally, I wouldn't ever join a class-action lawsuit. But small claims court sounds perfect...

If Amazon ends up removing the Kindle app over these new policies, I would sue Apple (via my local Apple Store to establish jurisdiction) in small claims court for $139.

The case would be relatively straightforward: I purchased an iPad because it could do everything a Kindle could do as well as more; Apple then caused functionality to be removed, so I would like Apple to buy me a Kindle to replace the functionality.

I've been to small claims court 3 times in my life, and each time won a default judgment because the other side didn't show up. Then, I faxed my judgment to my credit card company, and they promptly credited me (and presumably issued a chargeback to the merchant). This was in Fairfax County, Virginia.

I suspect that Apple will quietly reverse themselves, just like they did on the "apps can only be written in C, C++, and Objective C" last year. But if they don't, your local small claims court provides a wonderful opportunity to make your dissatisfaction known. And it only takes about 4 hours.

spiffworks• 15 years ago

Well, when you bought your iPad, weren't you fully aware of Apple's whimsical and capricious nature in dealing with the App Store? Even though Apple are just being assholes here, I have no sympathy for computer-literate people who would willingly take part in an ecosystem which has DRM built into its DNA.

relic17• 15 years ago

Class action? Alright, let's see what a self-respecting judge would do in such a situation. Especially when your evidence is that Apple's actions "feel hostile" and "leave a bad taste" in your mouth.

When a customer purchases an Apple device, he/she knows what that Apple does not guarantee continued service. Apple does not contractually promise that apps will continue to be there, it does not promise it will work with developers, it does not promise it won't change the rules, it does not promise that it won't get out of business in six months and close the app store altogether. The customer is aware of all that beforehand but still buys the device.

Many people talk about user rights. The only rights a user has are 1) to sue Apple if the company violates a written contract between itself and the user and 2) to refuse to buy Apple's products in the future.

asknemo• 15 years ago

It is a bit emotional, but understandable. I believe the situation would have been totally different if Apple has these 30% rules and things long before iOS becomes the leading platform, when developers has the choice what and what not offer, and they can decide whether they invest or not. But the situation we have here now is that many of them has invested substantially in the iOS platform. They have invested talents, and have definitely helped co-promote the iOS in one way or the other and created a solid user base. This bomb is understandably very very unpleasant to them. Honestly if a developer/company give in and accept the 30% now, what stops Apple from charging 35%, 40%, 50% in the long run? How are they going to report to their investors and convince them that their business models is not controlled by some giant company's policy that they have absolutely no say in?

ig13• 15 years ago

Are companies prohibited from charging iPhone users an extra 30% ?

count• 15 years ago

Yes - you have to make the iphone price as cheap as a user can get it outside of your app.

thalur• 15 years ago

I was wondering if there might be a way around that rule by claiming that what you sold in-app was a different product from what you sold out-of-app (e.g. on your website), but I'm not sure it would really work.

E.g. you sell the in-app "iPhone exclusive" version for $x and the out-of-app "everything except iPhone" version for ($x * 0.7) and then provide a "works on iPhone for no extra cost" special offer.

ig13• 15 years ago

Could you offer a service and charge a premium for accessing that service on the iPhone (regardless of whether purchased it on iPhone or online) ?

invertd• 15 years ago

Yup, when you start introducing countless rules like these topped with the tightly controlled procedure of approving/rejecting apps the whole iOS ecosystem just doesn't feel enticing (or easy) anymore. I can't believe that people actually have to put up with some dude sitting somewhere approving what apps are worth it and getting content via them will cost +30%. It's unreal, if content providers go on with this they'll pass the 30% down to user. How is that not a "tax"?

tjogin• 15 years ago

Yes, as the in-app offer must match or beat offers outside of the app.

joel_ms• 15 years ago

Kinda. Apple require in-app subscriptions prices to be the same or less than what the subscription costs if bought elsewhere.

A possible solution could be to offer a separately priced subscription for people who want iOS access in addition to what's normally provided, and then keep the prices consistent in-app and outside. But I'm not sure how Apple would feel about a solution like that, it would be the closest thing to an explicit Apple tax we've seen, and it directly hurts the consumer (which Apple seem to care more about than hurting developers/"app store-vendors").

merraksh• 15 years ago

Isn't it rather an extra 42%? If Apple takes 30% of the one dollar I used to make, in order to make that dollar again I'll have to charge $1.42, as its 30% is $.42.

krschultz2• 15 years ago

Isn't this the most objectionable part?

If Apple wants to charge 30%, fine, the companies impacted can just raise their iOS prices by 30% and pass it on to the customer. The higher cost of apps and subscriptions is not a tradeoff to buying Apple products. If customers see it as a bad tradeoff, they will by Android or WP7.

Instead, Apple is strong arming the content suppliers on their prices on other platforms. "make your price the same or less on our platform, or we will kick you off". That seems like the definition of anti-competitive. Why should Apple have any say what-so-ever on the price of pandora on Android?

If Google wants to pay Netflix and Pandora a fee so that their apps are bundled with Android phones for free, Netflix and Pandora could not take the money and give it away for free to users without getting kicked off of the Apple ecosystem. How is this not anti-competitive? Where is the FTC?

forgotAgain• 15 years ago

It does seem like they over reached on this one.

kenjackson6• 15 years ago

It seems like Apple's MO now is to over reach on everything, and wait to see how much people push back. It actually seems like a real business tactic they're using now.

marze• 15 years ago

Can't last.fm or anyone else not accept new subscribers from within an app, and be fine?

Kylekramer• 15 years ago

Apple makes it pretty clear that if you are offering a service that you deploy via an iOS app, you have to offer it within app or be rejected.

larrik• 15 years ago

Nope. Apple says that if you accept subscribers at all, you must also accept them within the app, and at the same price. Seriously.

Manfred2• 15 years ago

Yes, they can. They're just not allowed to link to their subscription page from within the app. If they offer in-app subscription purchases the pice of that offer should be the same or lower as outside the app:

"If you would like to make a subscription offer outside of the app, the same (or better) subscription price must be offered inside the app […]"

Some people misread this sentence as "you can't put a content app in the app store without giving money to Apple".

tallanvor3• 15 years ago

No, it means if you offer a subscription product, people have to be able to sign up for it through the app using Apple's subscription service. They can still let people sign up on their website, but they also have to let people sign up on the app, and they can't charge more even though Apple is taking a 30% cut.

What Apple is doing is worse than what credit card companies do. --At least with credit cards merchants can offer a discount for paying with cash.

djtumolo• 15 years ago

Selling subscriptions is too broad. There's been a lot of talk about music and magazine app requirements, but what about other business services? Chargify, a subscription billing service, offers an iphone app for its customers. Do they need to offer sign up in the app, and pay apple? What about TheLadders.com, or WeightWatchers?

A huge number of companies with an app and a subscription business model just got hosed.

_b8r0• 15 years ago

The Internet will route around all obstructions. I wonder if any of these content providers would get in trouble for providing jailbroken apps with music subscriptions from their websites? They could then encourage people to jailbreak their phones to get 'the full experience'. I think that would be a nice way of flipping the bird to Apple.

tjansen• 15 years ago

I guess in the long run, most multi-platform content providers will simply have to offer two products: one with iOS support and a 30% surcharge, and a cheaper one that only supports open systems like the web and (plain) Android.

No one can afford not to support iOS. But on the other hand, no one will be able to charge 30% more than the competition on other platforms.

cletus3• 15 years ago

30% is simply an unsustainable cut of many things, of which music subscriptions are just one example.

I've said before--and I stand by the statement--that Apple doesn't have a lot of wiggle-room here without disrupting their retail channel for iTunes cards, which (IMHO) is a really important competitive advantage they have over, say, Android.

Having the retail credit channel is the equivalent of the importance of having prepay options for cell phones vs postpay. Many people don't want to put CC info in iTunes or they simply want to give gift cards to kids.

What Apple should do is make such a service optional. If it's compelling, people will use it. I also believe that for some people this will be compelling because they then don't have to deal with billing and all the infrastructure (payment gateways, receipts, accounts departments and so forth) that that entails.

Forcing it down people's throats is another matter entirely.

It's still unclear how this will relate to the Kindle, which is really what interests me, as it is a mix of subscriptions and single-purchase publications, all of which are purchased outside of the App Store.

Part of the problem is that there is an internal inconsistency in play. You can subscribe to the Wall Street Journal Web edition and use that on Safari on your iPad just fine. Why should the WSJ app that gives you access to that same content be any different?

You could sell an app on the App Store for $10 and Apple would get their $3 cut. Give a free version away and offer a $10 in-app upgrade and Apple still gets their $3 cut. From Apple's perspective, why are subscriptions any different?

I guess Apple are seeing this as people making money off their platform so they should get a cut. That position has superficial attractions but quickly breaks down if you go deeper.

To me it's a lot like the ISPs who want to charge Netflix or Google for all the bandwidth they use, which is nothing more than double-dipping. The customer pays for the bandwidth. What they use that bandwidth for should be immaterial to the ISP.

Personally I think Apple makes enough money from selling the devices, the App Store and iTunes that just nickel-and-diming people who produce material users subscribe to to the point of excluding such content from the device is really not in their interest or the user's interest.

Not having Grooveshark on my iPhone/iPad is a problem (that predates this). Losing other music services will be a problem. Losing the Kindle will be a HUGE problem.

stcredzero• 15 years ago

Losing the Kindle will be a HUGE problem.

I agree. I've invested in a bit of content on the Kindle. It's ideal for technical books, which often should be disposable.

That said, I'm of two minds about this. I think we should get to the point where there are no longer multiple upstream "distributors" getting a cut of content. Often, this just gets between me and content producers without adding real value.

I guess Apple are seeing this as people making money off their platform so they should get a cut. That position has superficial attractions but quickly breaks down if you go deeper.

The writing is on the wall. Tablets are inevitably going to become commodity items. Apple is already in the software and content distribution business, and wants to ward off big competitors like Amazon. It's just natural that Apple wants to protect its turf.

Synaesthesia2• 15 years ago

But Kindle is still there! I would be surprised if Amazon remove it. I guess time will tell though!

GrandMasterBirt• 15 years ago

Sorry, you are wrong. The entire apple business model is about vendor lock-in. Only recently did iTunes remove DRM from their songs. The reason is because iTunes won. Apple used iTunes to lock people in by forcing them to use an iPod if they wanted their music which they "own" or rather "lease". Sure you were free to get ANY other mp3 player in the world, as long as you were ok with losing all your music.

The same here. Vendor lock in. You got ebooks from the cheapest store (iBook?) cool, iOS only, oh and a non-jailbroken one too.

Apple's history with the i... product line is content lock-in onto a device. They lure you in with pretty interfaces, then they hold your stuff hostage. Apple wants a piece of the pie, and they want to be able to undercut all competition. They know they can't ban kindle or face antitrust so they will do other things.

This is monopolizing pure and simple. It has nothing to do with apple making "enough" they want to make sure that they sell the cheapest stuff on the iOS, and they control where you can see the content - on the iOS - and if you leave you are fucked.

jonbro2• 15 years ago

I think that the antitrust suits are just around the corner. Which is good, because there are a ton of corner cases beyond the obvious ones that just got damaged. I think the books / movies / tv are just the ones that we heard about first. Pretty sure this is going to effect flickr, vimeo, and more.

Stormbringer14• 15 years ago

Sorry, but you're wrong. The iTunes DRM was ridiculously easy to circumvent even in iTunes itself. No mad leet hackzor skillz required.

Since you could trivially turn aac files into mp3 files in iTunes your quote:

"Sure you were free to get ANY other mp3 player in the world, as long as you were ok with losing all your music"

Is completely wrong. I can only assume you are one of the vast throngs of Apple haters who hate Apple and their products because it is trendy to hate trendy things.

I know the iPad supports pdf format, and I think also the epub format(?), which I believe is the big open standard that everyone 'should' be supporting? How is that bad evil and wrong? Apple has great adoption of standards for its web browsers (please don't complain about Flash, for starters it isn't a standard, for seconds its horrible, for thirds it is used mainly for adds which are also horrible, for fourths it violates usability and accessibility for fifths its one good use is dinky little free games, of which let me assure you I have it on good authority there are quite a few of those on the iOS). Apple is by no means perfect nor lily white, but to attack them on standards when they do so well in that area compared to most other companies is ... bizarre.

The only 'entertainment' companies that I can think of that do better at supporting a wide range of open formats are the small indie music and movie makers. Why doesn't Apple work with the indies to help them bring their content to a wider audience? That would be awesome. That you could legitimately complain about. But no, you pick something that Apple are actually good at to complain about. Why is it that when someone rants about Apple it is always opposites day???

The hilarious thing about your complaint is that all of the examples you give are obviously wrong, but there is a much better example: apps. Apps for iOS don't run on any other device.

...

The problem is, if you complained about that, you'd look silly, because as a general rule apps for one platform don't run on other platforms.

So anyway, to sum up the actual state of Apple 'lock-in':

(a) Open formats are supported on Apple products. (b) Some (e.g. music) closed formats are trivially easy to convert to open formats. (Turns out there are many converters for books that are cheap but not free, go figure) (c) iOS specific stuff is iOS specific (spot the tautology)

Would I prefer to be able to write apps for iOS in any language I wanted to? As a developer yes yes, OMG yes. As a consumer I would ask whether that means giving up the protections I currently enjoy.

What protections? Surely Apple's only purpose in life is to sell me sufficient numbers of these devices is to enslave my will to that of Skynet?

Not so! On my desktop I hardly download anything unless from a very highly trusted source. I especially distrust the free stuff. On the iOS devices I go wild and crazy, knowing that my private information is private, my data is safe.

So are you complaining about the walled garden? Why? There are a great many alternatives, none with gardens so nice. Leave the Apple lovers alone, the chains that bind them are so nice and shiny and make such pretty bracelets. Maybe if you're nice to them, one of them will bring you a drink of ice-water in your 'warm cosy place'.

fabjan3• 15 years ago

> Only recently did iTunes remove DRM from their songs. The reason is because iTunes won.

The reason is because iTunes won over the record companies, yes.

allertonm• 15 years ago

"Only recently did iTunes remove DRM from their songs"

A timeline:

iTunes store opens: April 26 2003

Steve Jobs DRM letter: Feb 6 2007 (4 years ago)

EMI content available DRM free: May 29 2007

80% of iTunes music DRM free: Jan 6th 2009

All US iTunes music DRM free: April 7th 2009

So I think you are stretching the meaning of "only recently", especially when considered in terms of the pace of technology development (as opposed to, say, geological time.)

You couldn't even buy an iPhone when they started removing it. The period over which they were exclusively selling DRM content is actually shorter than the period since they stopped.

(Update: that last part is not quite right - I was counting from the DRM letter date, not the EMI date. But it's close.)

chc5• 15 years ago

Steve Jobs was always vocally opposed to DRM. He said the main competitors for the Music Store were CDs and piracy, and neither hassled you with DRM, so he saw it as a competitive disadvantage. The labels required DRM because Napster had left them gunshy, but Apple always seemed to be giving in grudgingly. (This is different for movies, of course, where the main alternative is DRM-encumbered.)

The lock-in was iTunes, not the DRM.

cosmicray• 15 years ago

> Part of the problem is that there is an internal inconsistency in play. You can subscribe to the Wall Street Journal Web edition and use that on Safari on your iPad just fine. Why should the WSJ app that gives you access to that same content be any different?

The WSJ is the producer of the original content. The music subscription services are but another remora in the food chain. Were they the original producer of content, this would be an entirely different discussion.

amanfredi• 15 years ago

No, the writers at the WSJ are the producers of the original content. At some level, every producer is an aggregator. I don't think it's fair to categorically distinguish between the two, although you may disagree on the value of the aggregation.

vacri• 15 years ago

Unsustainable? How about 'normal retail practice'? It's funny watching people froth at the mouth about normal retail practice.

I don't like Apple or how they run their business, but a 30% cut for a retailer is even be a little low. Go into a bricks-and-mortar store and usually 30%+ of the price you see is markup on the wholesale price.

Apple provide a service: they deserve to get paid for it. Even if Apple allowed apps to be sideloaded, you wouldn't sell anywhere near as many apps if you marketed them yourself, not to mention having to deal with organising a payment system and easy, integrated way of getting them.

App developers are the wholesalers. Apple is the retailer. If you want to be both a wholesaler and retailer for your app, then Apple isn't for you. Go to Android... but you'll find it's still better to give Google a cut and be on their market as well...

halostatue4• 15 years ago

I strongly suspect most people who are commenting on this haven't read the iOS developer terms or the updated guidelines. I think these updated terms are crappy and unfair, but they're not at all what some of the more lurid claims are making—including, IMO, the one made in the accompanying article.

These rules are all about iOS In App Purchases (IAP). If your app is not eligible for IAP, these rules don't apply. Period. End of story. If your app is eligible, these rules probably apply.

So, what's not eligible?

* Goods or services for use outside of the app. This means that Linode, TheLadders.com, Chargify, WeightWatchers, etc., are all in the clear because they can't even offer their services through IAP.

* Currency of any form. Even if Facebook's mobile app offered FB Credit purchases, it wouldn't be allowed to do so through IAP.

* Rentals. Pre-determined-time-limited content access is disallowed for IAP.

If one were to look at all of the materials that Apple has published on this, this primarily seems focussed around downloadable content, not around streamed or "rented" content, and certainly not around non-app goods or services.

Yes, Last.fm, Pandora, Netflix, Hulu and the like are in a bit of a grey area right now, but I strongly suspect that they will come out in the clear on this because they essentially "rent" the content to you; you can't download it and keep it—they're probably not eligible for IAP in the first place. On "The true cost of publishing on the Amazon Kindle"[1], I have a comment that outlines the exact sections[2] with paraphrases of the text involved.

I also have a comment[3] on "Why are you people defending Apple?"[4] that talks a bit more about who this hurts, namely reseller-distributors. Content owners are (for the most part) going to be ecstatic about this if they offer the content for sale directly.

[1] http://news.ycombinator.com/item?id=2228839 [2] http://news.ycombinator.com/item?id=2229495 [3] http://news.ycombinator.com/item?id=2229353 [4] http://news.ycombinator.com/item?id=2228419

stanleydrew2• 15 years ago

If content owners are going to be ecstatic about offering IAP for a 30% fee, why does Apple need to force them? Won't they just implement it on their own?

jokermatt9993• 15 years ago

if they offer the content for sale directly.

There's probably a reason they went through middlemen. Not every content company wants to handle the distribution. They could simply have done so before. Was using PayPal that much harder than this new system that they weren't willing to touch it despite it offering much better margins? I doubt it.

and the like are in a bit of a grey area right now

And how long til Apple wants a piece of their pie too? I don't mean this as FUD, I'm serious. Apple has shown, repeatedly, a willingness to fuck over developers by changing its rules to suit Apple whenever the fuck it wants. Sure, some of these are marginally, arguably, better for the customer, but not to the point where it justifies screwing over the developers. For now, iOS is mostly where the profit is. But is it worth putting up with Apple's whims every few months, seriously?

alanfalcon2• 15 years ago

Companies that don't want to handle distribution are covered - Apple handles that for you (that's all built in to the 30% cut.)

kenjackson6• 15 years ago

Rentals. Pre-determined-time-limited content access is disallowed for IAP.

So can one do book rentals? You get a book for 100 years?

100 Year Rental Price: $10.00

Price to Purchase: $13.00

halostatue4• 15 years ago

Rentals are disallowed.

pornel• 15 years ago

App Store rules are not a legal system. They reserve right to reject you for any reason they like, including attempts to bypass spirit of their rules. They have humans judging every case.

jaaron3• 15 years ago

First, the guidelines have been changed in the past. That's one of the issues everyone has with Apple's behavior - changing the rules. So let's not take the guidelines as the final arbiter.

Last.fm, Netflix, Pandora, Hulu and so forth are on the platform. They are not "essentially 'rental'" as you argue. They are subscription streaming services. They clearly "read or play approved content" as mentioned in the guidelines.

Content owners are _not_ ecstatic. They don't want an Apple-only marketplace. They want multiple healthy resellers.

halostatue4• 15 years ago

Rules and guidelines have been changed for every marketplace in history as it finds its way around. Sometimes these changes are good; sometimes they're bad; sometimes they're neither.

Apple is trying something that I don't personally like (extending the rules to Amazon &c.), but just arguing that this is bad because Apple's changing the rules is a non-starter. Rules change. Sometimes they hurt people who were banking on a strategy that was based on the old rules. This is visible in pretty much every human endeavour. (The banks didn't like the rules that instituted the FDIC. They bitched. The rules were still changed.)

Last.fm, Netflix, Pandora, etc., are essentially rental in terms of IAP rules; you have time-limited access to particular content (with Last.fm and Pandora it's even more time-limited than with Netflix, since you have no real self-direction over the songs that are played per the web radio rules in the U.S.).

The guidelines aren't as clear as they could be, but as I said elsewhere, I'm pretty sure this isn't about access as much as downloadable content.

gokhan• 15 years ago

Apple tries to tax after sales usage of the device as if it's a leased device. They don't want to give up the upfront sales revenue of the device, and still want to get their cut for the usage.

This both can't happen. Give the device free and tax the usage, or sell it and live with the fact that the device is now belongs to the customer.

And iXYZ owners want to believe that they own the device. They can't hack it, they can't open it, they can't put software on it on their own. They can't even freely access the storage inside. And this kind of actions from Apple reminds them that they just don't own the device.

When it came to the question of who own the device, Apple customers always gave up their right to own the device in return of ahead of the time features, polish, being cool etc.

lotusleaf19876• 15 years ago

Zach said it best yesterday: http://news.ycombinator.com/item?id=2224469

Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!

They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?

The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.

When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me.

jaaron3• 15 years ago

I'm tired of seeing Zach's comment reposted as if it's some sort of inspired gospel.

Apple is positioning itself as _both_ a platform for applications and services _and_ as a consumer service. The services offered by Netflix, Hulu, Rhapsody, Rdio and so on offer value consumers have time and time shown they are willing to pay for. These are services the content owners (artists), studios and labels do not provide or provide poorly. Claiming they simply "repackage ... artist's content" is misleading.

These services are increasingly cross platform, available on the web, mobile devices, internet connected consumer electronics, game consoles, etc. They add value to those platforms and can complete when the platform is suitably independent. Those platforms provide only a portion of the necessary infrastructure to run a consumer service. Purchasing, bandwidth, hosting, encoding, transcoding, metadata, social networking features, inventory and so forth are typically still maintained by the consumer service itself. They already have these services due to their web presence.

Apple tries to play the game both ways in an increasingly monopolistic fashion. Before you go on and start harping about Android, recall that Microsoft was convicted not because it was the only operating system (it wasn't) but because it used it's market advantage in the OS to restrict competitors in other markets (browsers). Apple is doing the same thing.

It's one thing for Apple to provide competing consumer services. It's another when they intentional block competition on their supposedly independent platform. Keep in mind, as a platform provider, Apple doesn't provide as many services as Zach suggests. They are little more than a payment services provider, though their rates and restrictions are completely out of line with the rest of that market.

Consider for a moment if Apple were to do provide the same APIs and restrictions on all of Mac OS. Applications can only be made available in the Mac App Store. Applications must use Apple's subscription and purchasing API and no other API for purchases. And so on. They have their own browser? Why not offer an API for web apps as well. It would be secure and user friendly.

"Apple takes the place of publishing, distribution, inventory, sales, payments and shipping... Seems reasonable to me." I'm sure it does.

lotusleaf19876• 15 years ago

Monopolistic? Apple is in no way a monopoly. They have 4% of phone market share. Do you know what a monopoly is? Because based off your comment I don't think you do.

"In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.": http://en.wikipedia.org/wiki/Monopoly

So what product does Apple have a monopoly on? Laptops? No. Cell phones? No. Mp3 players? No. App store? No: https://market.android.com/

There are alternatives to Apple, you just don't like them.

Apple is a middle man, just like Wal-Mart, eBay, or Amazon who all charge for their service (selling your products).

If you don't like it, sell it somewhere else, but calling Apple monopolistic is factually inaccurate and intellectually dishonest.

Oh, and the reason I cited Zach's comment, is because the topic whether it's Rhapsody/Spotify/Last.fm/Pandora/Netflix still applies and credit is due to Zach for his spot on comment/analysis of the situation.

bradshaw1965• 15 years ago

As an aside, what is the fist graphic in the posted article? I probably just don't understand the mark, but I interpret that kind of logo with revolutionary, "fight the power" kind of stuff and this is just corporate positioning, not revolution.

Stormbringer14• 15 years ago

http://en.wikipedia.org/wiki/Raised_fist

Given my brief scan of that article, there are too many possible associations for the meaning to actually be clear. It could be to do with politics - anything from accusing Apple of being Nazi's, Communists, Communist Nazis (etc) and then there's the racial overtones.

It might just be a call for Solidarity.

E.g. I don't like this, if I revolt will you revolt with me? [ ] Yes [ ] No.

protomyth2• 15 years ago

I am fine with Apple hosted content being at 30%, but when I have to do all the work for hosting and delivery, 30% is beyond reasonable.

I would even be fine if the rule said that an app developer can provide no link / no in app purchase unless it is through Apple. People using Amazon, B&N, Netflix, last.fm, etc. wouldn't of had a problem because they know to go to the website to buy stuff. The "must also" crap is the problem.

scdc• 15 years ago

Maybe it will cause last.FM to shut down, or maybe if last.FM pulls out of the iTunes store, it will fuel iOS competition with Android. Or maybe it will fuel mobile browser app development. I like how the market will decide how this all plays out.

slouch• 15 years ago

The best part of this article is, "High Lord Jobs."

dalton• 15 years ago

I wish I had the balls to have mentioned this particular risk in my startup school talk re:music a few months ago. People probably would have thought I was being paranoid/delusional.

The subscription model is already pretty f---ed even without a Deus Ex Machina from Apple.

p90x2• 15 years ago

Apple is the forbidden fruit. Tempting, seductive and ill get you kicked out of paradise.

Stormbringer14• 15 years ago

You might be right about forbidden fruit, but Apples aren't mentioned in Genesis at all. It turns out that the first reference to the Apple in the Torah is this:

http://www.biblegateway.com/passage/?search=Deuteronomy+32:1...

Based on 40% of the verses in the Bible that mention Apples being in the Song of Solomon, Apple is definitely a naughty little fruit. :D

p90x2• 15 years ago

That's interesting. Did you know that apple's original logo depicts Isaac Newton under an apple tree?

http://upload.wikimedia.org/wikipedia/commons/f/fa/Apple_fir...

colinplamondon• 15 years ago

Use a browser.

thewileyone• 15 years ago

I respect Steve Jobs as much as his fans love him, but I think that if this was announced after he has departed, no one would buy into it.

oceanician• 15 years ago

Which IRC channel was that on then?

cynoclast• 15 years ago

Why are people still blaming Apple in this?

It's the recording industry that is the root of the problem.

Apple is very, very late to the game in terms of trying to own ideas and sell über-cheap copies of information like physical products.