An Open Letter to Apple on the Readability App rejection

http://blog.readability.com/2011/02/an-open-letter-to-apple/

by bensummers • 15 years ago

478 196 15 years ago

blog.readability.com

sammcd• 15 years ago

Google cache: http://webcache.googleusercontent.com/search?sourceid=chrome...

alecco• 15 years ago

An Open Letter to Apple

by Richard Ziade on Feb 21, 2011

Dear Apple: It’s your friends from Readability. Remember us? You put our technology into your Safari browser last year. We’re writing this open letter because – well – we’re a little upset right now.

Last Friday, you notified us that our Readability iOS application was rejected. In explaining the rejection, you pointed us to 11.2 in the App Store Review Guidelines:

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected.

We’re obviously disappointed by this decision, and surprised by the broad language. By including “functionality, or services,” it’s clear that you intend to pursue any subscription-based apps, not merely those of services serving up content. Readability’s model is unique in that 70% of our service fees go directly to writers and publishers. If we implemented In App purchasing, your 30% cut drastically undermines a key premise of how Readability works. Before we cool down and come to our senses, we might as well share how we’re feeling right now: we believe that your new policy smacks of greed. Subscription apps like ours represent a tiny sliver of app sales that represent a tiny sliver of your revenue. You’ve achieved much of your success in hardware sales by cultivating an incredibly impressive app ecosystem. Every iPad or iPhone TV ad puts the apps developed by companies like ours front and center. It was a healthy and mutually beneficial dynamic: apps like ours get exposure and you get to show the world how these apps make your hardware shine. That’s why we’re a bit baffled here.

To be clear, we believe you have every right to push forward such a policy. In our view, it’s your hardware and your channel and you can put forth any policy you like. But to impose this course on any web service or web application that delivers any value outside of iOS will only discourage smaller ventures like ours to invest in iOS apps for our services. As far as Readability is concerned, our response is fairly straight-forward: go the other way… towards the web.

Since we re-launched, we’ve already seen a significant amount of usage across a wide range of browsers, operating systems and devices via the Readability web interface – for both mobile and desktop. Looking ahead, we plan to redouble our efforts to deliver the best possible reading app using the latest best-of-breed web technology.

The new Readability is fueled by the free-form nature of the web. Just as content pumps through the web’s piping, apps like ours thrive as nodes on the web – unencumbered by levies or barriers imposed by others. As we said months ago: “for us, the web is the right bet.”

Still, we’re always looking to give readers the best possible reading experience and a native iOS client would help us do that. We hope you’ll change your mind. If you do, we’d be happy to resubmit the Readability iOS app. Regards,

The Readability Team

P.S. We’d we be glad to deliver Readability for iOS – with in-app purchasing – if you’d carve out 70% from your 30% fee and share it with writers and publishers, just as we do.

kmfrk4• 15 years ago

I like to think of Apple's side of all the negative stories, but this time, I can't come up with a cogent excuse for what they are doing - save inept App Store policies/reviewers.

By this logic, flattr will never get a native iOS app. And when are Apple going to shut the Instapaper app down, when Marco decides to let his one-dollar monthly subscribers[1] receive premium benefits?

Apple really hates newspapers and magazines.

[1] http://www.instapaper.com/subscription

statictype3• 15 years ago

I think a large chunk of Instapaper's revenue comes from the iOS apps so assuming Apple continues to keep acting like a douche, Marco would probably just as soon cancel the subscription plan rather than let his app get rejected.

kmfrk4• 15 years ago

How dare you answer my rhetorical questions?! :)

That's the most obvious route for Marco - the (rhetorical!) question was directed at Apple, because they appear to thwart a large domain of what iOS could be used for.

nika3• 15 years ago

When he doesn't, and when he adds in-app subscriptions, will it cause you to revise your perspective?

Instapaper is exactly the kind of app this is directed at. It is a SaaS subscription. It would be foolish to turn away all the additional sales you'd get by being able to offer subscriptions within the app (something you couldn't do previously, forcing Marco to take paypal.)

Zakuzaa2• 15 years ago

Possible Apple's side: App revenues may not make for a sizable part of their revenues as of now but they are expecting a humongous growth in both - iOS devices sales and Apps sales (and hence In-Apps sales). They feel the need to get in right now or before it's too late. They might also be contemplating Apple Television and more iOS based form factors. This can be huge.

gaiusparx• 15 years ago

Apple's side: Imagine most popular newspapers and magazines sites use Google One Pass to collect subscriptions fees via website, and offer free iOS app to consume the content. Apple collects nothing. I'm not totally with Apple but they have their points.

xentronium3• 15 years ago

> Apple collects nothing

How about they sell the phone?

Niten• 15 years ago

> To be clear, we believe you have every right to push forward such a policy. In our view, it’s your hardware and your channel and you can put forth any policy you like.

It isn't Apple's hardware; let us not forget the hardware belongs to the people buying the iPhones and iPads out there. Apple's enforcement of what can and can not run on these devices is not some fundamental property right, but an artificial construct.

rimantas3• 15 years ago

There was another part that you omitted "and your channel". Or did people buy that also?

Kylekramer2• 15 years ago

That is part of the artificial construct. There is no reason for the channel to be Apple's except that they enforce ridiculous rules like this rejection to maintain complete control. And the channel loses value every time they pull something like this.

generalk2• 15 years ago

No, of course they didn't buy the channel. But that's not the point.

When Apple sells you an iPhone, it ceases to become their phone and becomes your phone. You're not leasing it, you aren't renting it, you've paid for it and it's yours.

This is somewhat orthogonal to the original point, which was that Apple is free to reject whatever applications they like from their application delivery channel, just as I'm free to choose my clients, but it's important to remember.

brk3• 15 years ago

It isn't Apple's hardware; let us not forget the hardware belongs to the people buying the iPhones and iPads out there.

Sort of. It's all a matter of licensing. Technically, you might own the hardware, but you are licensing the OS running on it.

A better argument would be if you took your iOS device and wrote your own stack for it. In that case, I don't think Apple would have much claim to what you could/could not run on "your" hardware. But in the current scenario you're buying iron-wrapped software (or I guess plastic-and-glass-wrapped software). Apple is really controlling what happens with the software, not the hardware.

This is an importnat distinction, IMO, because I don't believe any of the "I paid for it so it's mine" arguments out there really pass muster until you also create your own (not jailbroken) software stack.

lamnk2• 15 years ago

I don't think so. Just imagine Microsoft try to apply the same terms to Windows ...

akashs• 15 years ago

I think you're half correct. While Apple certainly has every right to try to put mechanisms in place to prevent you from doing certain things on your device, the fact that you purchased it gives you the right to legally circumvent any of those protections to run whatever software you would like as long as the software is also legally obtained. That's why exempt from the DMCA rules are:

"Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset."

exit• 15 years ago

i don't follow this argument. software doesn't exist in some alternate metaphysical reality. software is just as much a configuration of matter as the rest of the device.

can apple "license" the physical shape of the device and charge 30% on all sales of protective sleeves?

bigiain• 15 years ago

Didn't Apple just lose that argument in court trying to claim jailbreaking your own iPhone was illegal?

jellicle• 15 years ago

This isn't a good summary of the law as it is, and it isn't a good summary of how the law should be.

fauigerzigerk• 15 years ago

All contracts are artificial constructs. There are no natural contracts. So the question is simply whether the kind of contract Apple has with its customers is legal or not and if it is whether the law should be changed.

quizbiz• 15 years ago

   > There are no natural contracts.

Do not kill?

_delirium• 15 years ago

I wonder if there's a name for this class of contracts that seems suspect, some of which are actually illegal and others of which are legal but give people pause more than normal contracts. They mostly seem to have something to do with exclusion or tying, that if you do A you can't do B, and/or if you do A then you must do B.

Various examples that aren't allowed: EULAs that purport to prohibit resale of books (first-sale doctrine), labor agreements that purport to prohibit the employment of members not from the contracting labor organization (union closed shops), deed restrictions that purport to prohibit resale of property to a class of people ("no reselling this house to blacks"), noncompete agreements in some states, exclusivity contracts entered into from a position of market dominance (the Microsoft and Intel OEM cases), certain kinds of explicit tying even when not in a position of market dominance, bequests that contain ongoing conditions on the heirs' behavior (rule against perpetuities), etc.

One example that is also in the "seems related" area but is legal in the U.S.: resale price maintenance, where a manufacturer can prohibit a retailer from selling a product below a certain price. One that's currently being debated is the vague set of issues around "network neutrality", related but not identical to the last generation's debate over "common carrier" status. Gray area: EULAs that purport to prohibit decompilation and reverse engineering.

I know it's a category with vague edges, but it seems like there should be some name for it? These kinds of contracts, even the ones we decide are allowed, seem different in kind from pure exchange contracts of the form, "I give you $100, and you agree to provide me with 2 hours of consulting".

relic17• 15 years ago

Sure, the hardware belongs to the people buying the device. They can sell it, give it as a gift, break it. But they can't use the device every way they want. The device does only so much. The fact is: everyone bought a device in the full knowledge of all its limitations. Before purchase, Apple never promised a stream of wonderful applications and content at a price that the customer deems appropriate. They did not guarantee a great App Store, they did not even guarantee that they won't shut down the App Store and let the device be just a piece of hardware. The customer knew the limitations and bought the device anyways.

tygorius• 15 years ago

Changing the rules once you have a large installed base is always a delicate issue. How many current iPad owners knew their Kindle app (and others) might be deactivated by Apple in a couple of months because Apple decided it wanted a 30% cut?

Synaesthesia• 15 years ago

I suppose you'll have to do the Android on iPhone thing though. They're still kind of struggling with a lot of issues, like power management for one.

nhangen2• 15 years ago

I tend to think of it as Verizon/ATT's hardware, because they are subsidizing the purchase of it.

Maybe it's a stretch, but I don't feel like I own it until my 2 years is up.

cma• 15 years ago

Property rights are artificial constructs too.

adsr• 15 years ago

It has nothing to do with the hardware. Apple gives access to a sales platform, similar to let's say Amazon. They charge for the use of that platform. And are now preventing someone to use it as a mere "springboard" to somewhere else. Nothing is stoping anyone from creating a web app to take care of this by them selves, independent of the app store.

joebananas• 15 years ago

So basically: "We totally think your policies are right and groovy, but please make an exception for us"?

shantanubala• 15 years ago

Not quite. More like a "we know it's in your legal power to be needlessly greedy, but we'd like you to stop swimming in money and be a little more friendly for small developers."

talbina• 15 years ago

Why do these types of letters have to start with the headline "An Open Letter to...". If you're publishing it, it's obviously open.

Bud• 15 years ago

Just to be nice and actually answer this person's question rather than just downvoting them:

The distinction, as I understand it, is that labeling it an "open letter" tells us that one entity (Readability) intends not just to publish a given letter for all to read, but also make clear that it is directed at a second entity (in this case, Apple), in the same way as if Readability had sent it directly TO Apple.

It is also often hoped that such an open letter might elicit a public response.

russnewcomer3• 15 years ago

I really don't understand Apple's moves here. They have a terrific platform, and much of the value of their platform comes from third-party apps. If app devs start leaving for WebOS or Android in droves, much of their traction is going to be lost. I think if they would have gone for 10% or 15% they wouldn't have gotten this kind of response.

I predict either reversals or abandonment of their platform. I still maintain that HP or RIM have a great opportunity here to announce that they are going to build app stores that are low fee for subscription apps. I think you'd definitely see a move there from numerous devs.

And I too worry that my beloved Instapaper may be going to face trouble soon as well.

thailandstartup• 15 years ago

Apple feels its position is now strong enough that it can dictate terms.

tomjen3• 15 years ago

Considering that almost nothing happened when the iphone was released on Verizon, Apple is at an extremely weak position and can not only not dictate terms but they are very far from being at a point where they can.

kenjackson3• 15 years ago

Funny how everyone used to say that Apple was benevolent due to their actions in the PC space. My argument was always they've never been in a position to really be aggressive. Now that they are in a borderline position they are quickly being a lot less benevolent. Does anyone honestly think if they had 90% PC/browser share they'd be "nicer" than Microsoft?

siglesias6• 15 years ago

It's because in-app subscriptions are really just recurring in-app purchases that can be cancelled at any time.

If you accept that the 70-30 split is acceptable for sales of apps, by logical extension you must accept that the 70-30 split is acceptable for in-app purchases, because technically one could provide a free app with an in-app purchase to make it a full app, and anything less than 30% on Apple's take would gravitate the market toward this model.

If you accept that 70-30 is fair for in-app purchases, then you must by logical extension accept that recurring in-app purchases that can be cancelled at any time would also have this split, because technically one could provide all in-app purchases at a steep discount simply as "subscriptions" that can be cancelled after the first payment.

As far as I can tell, this is Apple's reasoning and rather inescapable at that.

russnewcomer3• 15 years ago

I don't think that's a logical extension, personally.

However, I think Apple could say that a subscription purchase was 85-15 or 90-10 and they would have gotten this in with little push back.

Or even required that subscription apps cost $9.99 for the initial purchase ($9.99 is a number from my head with no basis in reality) and a following 90-10 split, or requiring that apps with a free initial release go to a 70-30 split on subscriptions. I really think they could have done that and not had a major revolt on their hands. They may not have made the same in the short term, but I think they would have had a better response and a better long-term hold on small developer and publisher loyalty to their platform.

I would personally buy a Palm Pre 3 if it had Instapaper and Kindle and the iPhone 5 didn't. I would venture that their are numerous other consumers who have similar preferences.

[Edited for clarity]

shangaslammi2• 15 years ago

The 70-30 cut alone might be acceptable, but what makes it ludicrous is that the developer is forced to offer the in-app purchase option for external services like Instapaper, which are not in any way tied to the iOS platform. I mean, what's next? Should Evernote, Remember the Milk and Dropbox, to name a few, all be forced offer an in-app subscription with 30% Apple cut just because they happen to have an iPhone client among other clients?

statictype3• 15 years ago

Perhaps this will be the one that gets enough publicity to make Apple come to their senses and see the collateral damage being caused by their War on Amazon.

sofuture• 15 years ago

The collateral damage? They're making out just fine, what do they care about a handful of app developers?

Maybe this will be the one that gets developers to realize this is not a sustainable game they are playing with Apple, by Apple's rules, in Apple's world.

maguay4• 15 years ago

If the subscriptions policy isn't the absolutely craziest move Apple's ever made, I don't know what is. iOS has converted me into an Apple fan, but not if stuff like this continues.

Zakuzaa2• 15 years ago

It still doesn't beat the "Objective-C Only" fiasco..does it?

maguay4• 15 years ago

It's a strong second place then if it's not the first. Good thing is, Apple backed down on that which is why I was just today trying out Airplay SDK on Windows. Hopefully they'll back down on the subscriptions plan, too.

That said, it really should require us all getting up in arms over it for Apple to stop stuff like this. They shouldn't have made such a policy to start with! Very worrying for the future of the platform...

iPhone12• 15 years ago

What a slap to the face. Apple uses their technology then tells them they can't use it themselves without offering in app purchases?!?!

kmfrk4• 15 years ago

Not exactly. If you haven't read about it, Readability (Arc90) has a new subscription model[1]. That's the point of contention.

(Not that it's any less stupid.)

[1] https://www.readability.com/learn-more

iPhone12• 15 years ago

I know about the subscription model; I'm a subscriber.

panacea• 15 years ago

I could be wrong, but I don't think Apple actually used their technology, but rather implemented a similar feature into desktop Safari.

maguay4• 15 years ago

Actually, if you look in the Safari 5 credits, you'll find reference to the original Readability script. Here's the official Readability (arc90) blog post about it: http://blog.arc90.com/2010/06/10/why-we-built-readability/

jammur5• 15 years ago

I'm fairly quick to defend Apple, because a lot of the flack they take is BS, but in this case I'm really struggling to find the upside.

Richard says that their 30% would account for a tiny sliver of Apple's overall revenue, but lots of tiny slivers start to add up eventually. The problem though, is that if the cost of those slivers is to drive the developers away from the App Store, then those slivers disappear. Considering that third party apps are possibly the most important feature of the platform, it doesn't seem like a smart idea.

The 30% cut on App sales is understandable, because software generally has high margins, but it doesn't sound like the same is true for content subscriptions. Maybe it's a case of trying to keep their policy too uniform (i.e 30% on everything)?

Does anyone know where the subscription content comes from? From my understanding, the subscription content will usually come from a third party, rather than Apple's CDN, so there's no marginal cost to Apple.

EnderMB2• 15 years ago

This may be a stupid comment to make, but one I feel should be added to the conversation. Why are people so willing to develop for Apple when Android is now the larger platform, and has a far easier barrier to entry?

yannickmahe• 15 years ago

Revenue on iOS devices is far greater than on Android devices: it seems people paying for Apple products are far more eager to pay for apps.

kenjackson3• 15 years ago

What about ad revenue? Angry Birds appears to be making more money from Google ads than iOS sales, from what I can tell...

ekanes• 15 years ago

In part because Android's many devices/configurations make it a less predictable development platform. (I'm not saying there aren't reasons to develop for Android, but you asked for one reason people don't do it more.)

estel• 15 years ago

I'm not sure I've talked to a single Android developer I know, including myself (yes, I talk to myself) that sees fragmentation as a significant difficulty in developing apps. Something to consider whilst developing? Of course (and fundamentally moreso if someone wants to support tablet devices now), but supporting multiple devices is something that Google's made ridiculously easy.

nir• 15 years ago

From what I understand, it's harder to actually sell on Android: there isn't (yet - Amazon are working on one) a store comparable to the App Store, and, perhaps related, the average user seems to be more reluctant to pay for apps.

redrobot50502• 15 years ago

There might be more Android phones out there, but you also can't get to them through the Android Market. Not every country that has Android has an App Store that will accept commercial apps. It's getting bigger and growing faster, but Apple is still ahead of Android.

Also, Apple's tools for developing are just superior. The Android SDK is an Eclipse/Netbeans Plug-in. Apple's is an 800MB-1GB version of XCode.

nlogn• 15 years ago

I disagree that Apple's tools are superior.

XCode is a really unpleasant IDE to work in imo because it has so many separate windows, even in the All-In-One view. Admittedly, this could just be because I am so used to the VS/Eclipse single tabbed window style.

I dislike that XCode is only available on OS X which adds the cost of (expensive) mac hardware to app development (or the difficulty/annoyance of updating a hackintosh every time a new version of OS X comes out).

And finally, it is annoying to have to download/install an 800MB-1GB version of XCode every time a new version comes out.

johnbender• 15 years ago

The metric you've used to measure "betterness" here appears to be sdk file size.

kmfrk4• 15 years ago

Piracy - it's probably better to make free, ad-supported apps. Fragmentation. What you're able to do as a seller depends on the country you live in. The Android store is terrible (from what I've read and heard). General discoverability - Apple does a fine job of promoting apps. Messed up rules that will ruin your entire business[1]. Google's "Don't be evil" is bull[2].

It's my impression that iOS developers make more money - although cross-platform development can be considered.

I am probably never going to own an Android phone, so I won't be developing apps for myself which makes development too artificial.

This blog post has made me consider looking into Palm/WebOS, though.

[1] http://news.ycombinator.com/item?id=1670880

[2] http://www.reddit.com/r/apple/comments/cspnb/daring_fireball...

zoul• 15 years ago

I simply like the platform. The hardware is nice, Objective-C is a pleasant language for me to write in, the library is very well thought out. And it certainly does not hurt that we can keep the company afloat by developing for iOS -- we simply could not do that on Android.

EnderMB2• 15 years ago

Really? A few work clients of mine have recently moved towards developing apps for Android (funnily, after having their academia app rejected multiple times by Apple) and from what I've heard it is far easier to train people to write Android apps, they make far more money from ads and that most Android owners will purchase great apps simply because the developer was thoughtful enough to release it on their platform. It may be different in the UK, but to my knowledge they've ceased development on iOS to focus on Android.

joshmanders• 15 years ago

I don't understand why Apple is putting themselves in this situation.. Bad for business. Apple HAD the market, then Google came along with Android, now they're being snobs and just forcing their own users to switch to Android powered phones just because of this exact thing. Shame really.

nika3• 15 years ago

I think it is worth noting, because everyone seems to have forgotten, that this has always been the rule. I remember it from the very first reading of the terms and conditions (back when they were under NDA).

It has always been against AppStore rules to monetize apps outside of the AppStore. Apple has been lax in enforcing it, primarily because Apple didn't offer a subscription mechanism.

Now they offer a mechanism, and so now people can comply with the rule, and so now they are enforcing it.

dpcan• 15 years ago

The same thing happens in the Android Market. Apps get removed for policies that have always been there, and then they complain that they exist AFTER they develop the app.

READ THE TOS PEOPLE.

ChrisLTD3• 15 years ago

A rule isn't a rule until it's enforced. Apple has effectively changed the rules after tricking companies like Amazon and Netflix to develop software for the App Store, which was – until now – a mutually beneficial arrangement.

commandar2• 15 years ago

Wasn't Netflix functionality something Apple used as a selling point for the iPad?

ascendant• 15 years ago

Through all of this I wonder if they knew there'd be so much angst and now they will "concede" to something like 15% with that being their plan all along. When you make a policy that's really really really bad to then scale it back to just being really bad, people think they're getting a deal.

MartinCron2• 15 years ago

I haven't heard anything about this subscription model and Netflix. Will Netflix be able to continue to provide their iOS apps without giving a cut to apple? Seems crazy that they would have to.

irons• 15 years ago

Netflix may be exempt, somehow:

http://www.businessinsider.com/netflix-not-affected-by-apple...

MartinCron2• 15 years ago

It implies that Amazon could get around this just by removing the "get books" button from their kindle iPhone client, requiring people to make purchases from a browser.

kenjackson3• 15 years ago

DHH, if you're reading, is this what you were talking about?

sacrilicious• 15 years ago

Believe you me, I want these guys to succeed as much as anyone else, but... wouldn't keeping the payment processing for subscriptions OUTSIDE of the iOS app solve the issue? I must be missing something critical to the functionality of the app?

There are no non-profit or even strictly business-related terms under the umbrella of the App Store as far as I know. There are no corporate/business iTunes purchasing accounts, no escalation to root-level privileges allowed for apps in the MacAppStore(postponing backup and other more powerful apps). This seems like another oversight on Apples part due to treating it as a lower priority.

And although they have every right to be proud of their achievements, it seems a bit like "you owe me" to remind Apple that they used the Apache-licensed Readability tech for Reader. Their proposed app could stand on its on.

msbarnett2• 15 years ago

> Believe you me, I want these guys to succeed as much as anyone else, but... wouldn't keeping the payment processing for subscriptions OUTSIDE of the iOS app solve the issue?

What you're missing is the other rules which force you to offer purchase via IAP because you offer subscriptions outside the app, too. The following terms apply:

11.1 -- Apps that unlock or enable additional features or functionality with mechanisms other than the App Store, except as approved in section 11.13, will be rejected

11.12 -- Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Developer Program License Agreement.

11.13 -- Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 -- Apps that link to external mechanisms for purchasing content to be used in the app, such as a “buy" button that goes to a web site to purchase a digital book, will be rejected

lukifer• 15 years ago

The terms of the App Store expressly forbid offering a subscription payment service which is not also available using Apple's 30% API. That's why people are upset.

damoncali2• 15 years ago

The reason this doesn't work is because Apple had to pick a number - 30%. For some businesses, that makes perfect sense. for others 1% or maybe 70% might make sense. But rigidly adhering to 30% (no doubt because of the massive complexity of the alternative) is going to cut lots of business out just because it doesn't make sense. Apple needs to rethink this - it's clumsy.

foobarbazetc• 15 years ago

They have to pick 30% because in-app purchases are charged at 30%. You can't have two variations of the same thing (one that auto-renews and one that doesn't) charged differently.

Let's say the subscription cut was 10%. Everyone would release their apps as free, and charge for everything as a "subscription" because it's less than the 30% cut for app sales or non-auto renewable in-app purchases.

Basically, there is no other percentage that Apple can use here, for very good reasons. If they lower the percentage for this, they have to lower all the other percentages.

And that's not going to happen, because 30% is pretty reasonable for what they provide. The Android Market takes 30%, and Amazon takes 70% for Kindle subscriptions.

Edit: IMHO, everyone talking about the percentage is missing the point. The problem is the policy itself. It's just too general and broadly applied for a huge amount of stuff out there. Marco nails the issues here: http://www.marco.org/3437484678

damoncali2• 15 years ago

The way I see it, 30% is not "pretty reasonable". It might be reasonable, it might be a great deal, or it might be a deal killer.

It's not much different than if Google were to decide that all AdWords clicks are now $3.

The thing is that nobody cared when it was a one time fee for their $1.99 app. When Apple starts talking about subscriptions that may cost 10's or 100's of times that each month, Apple starts to look like their overreaching - and it could be damaging to long term adoption of the platform.

One might even hypothesize that these ham fisted policies are defining the very nature of the offerings in the app store - it explains the preference for fart apps over sophisticated (expensive) products.

Apple is just coming off as if they didn't think this through.

tel• 15 years ago

P.S. We’d we be glad to deliver Readability for iOS – with in-app purchasing – if you’d carve out 70% from your 30% fee and share it with writers and publishers, just as we do.

This will never happen, but if it did I'd be ecstatic. It could be a great PR move and really help Readability's goals to fund independent content producers online.

T-hawk• 15 years ago

We don't like it, but Apple's got every allowance and reason to do this. Either Readability will cave to Apple's pricing model, or somebody else will come in with the same technology and do so. Apple believes that the competitive position they have attained allows them to dictate pricing terms. The market will decide whether they are correct.

The only argument against Apple that holds water is abuse of monopolistic power, but I don't think that will fly given that the whole market of Android and Windows and other phones also exists.

petercooper• 15 years ago

My satellite TV provider has an app I can only use if signed up to them. Do they now need to offer TV subscription through their app? What about the 37signals Campfire clients? Do they now need to offer Campfire subs via inapp purchase too?

elehack• 15 years ago

My understanding is that yes, Apple wants them to.

rimantas3• 15 years ago

Answer to the first one is no, because you don't get their service in the app.

Bossman• 15 years ago

As far as I can tell, Apple's new guidelines wouldn't let them put that app in the App Store anymore. Apple's guidelines say you have to sell through the app using their API and can't sell anywhere else. And you can't link to a place where customers can buy your service outside of Apple's control.

jpwagner• 15 years ago

I think they might have a point, but their ineffective communication style and adversarial tone will surely guarantee they are ignored this time around.

mjfern• 15 years ago

I posted this to my blog a few days ago, but I think it's worth repeating here because it applies directly to this open letter:

While apps and content are just break even businesses for Apple, they are instrumental to the company's financial success. The iPod, iPhone, and iPad are each technology platforms that bring together consumers, apps, and content. The value of each platform (iPod, iPhone, and iPad) to consumers hinges on the availability of apps and content; and the value of each platform to app developers and content publishers hinges on the number of consumers that have adopted the platform.

In short, there is a virtuous circle in effect; hardware sales to consumers attract more app developers and content publishers, and more apps and content drive more hardware sales to consumers.

Apple’s new subscription model might strain or even break this virtuous circle. First, since Apple is only requesting 30% of revenues if content is subscribed to through iTunes it will likely cause content publishers to encourage consumers to bypass iTunes and purchase content directly. Over time this may reduce the relevance and significance of iTunes. Second, this 30% cut will compel app developers and content publishers to find alternative, less-expensive distribution channels. Google is the natural alternative given Android and the Android Market, and the company has already launched the “One Pass” payment system, which charges a lower fee (10%).

If this new subscription model is potentially damaging to Apple’s financial success, then what’s motivating Apple to launch such a model?

It’s possible, though very unlikely, that Apple failed to consider the implications of the model and the strain it would place on app developers and content publishers. A second, more likely scenario is that this subscription model reflects efforts by Apple to generate greater revenues and profits from its apps and content business. A third likely scenario is that Apple is trying to create barriers to entry for competing distribution platforms, such as Netflix and Amazon, which will find it cost prohibitive to offer their service through iTunes given the 30% in fees. These barriers may give Apple time to further develop its own content distribution business. The immediate risk that content publishers will turn en masse to Android is low given the delay of Android-based tablets and other connected devices (e.g., connected TVs).

This subscription model may boost iTunes revenues and profits, and it may create a barrier to entry for competing distribution platforms, such as Netflix and Amazon. That said, I believe this move is a strategic mistake. There may be some short-term benefits to Apple, but overall it will strain the company’s relationship with app developers and content publishers. Over time this will reduce the selection of apps and content available via iTunes, reducing the value of Apple products to consumers, thus putting downward pressure on hardware sales. In the meantime, partners and resources will migrate away from Apple, towards Android. Over time this will add further energy to Android adoption for app developers, content publishers, consumers, and hardware producers. Android is already emerging as a force in smartphones. With the launch of Motorola’s Xoom and other tablets, Android will soon gain significant share in the tablet market as well.

mx12• 15 years ago

After reading this, I am struck with the idea that maybe Apple's reluctance to support flash, is not just motivated by the performance issues. That it could also be that the DRM support in flash would mean that companies could just abondon the app model and just use flash (i.e. Netflix or a flash based Amazon ebook reader).

Pooter• 15 years ago

I believe Jobs actually made this point fairly directly, though couched it in terms like "if people start using 3rd party tools to generate cross platform apps, you wind up with crappy apps that don't suit the platform, have undesirable performance characteristics, and fail to take advantage of platform specific features that get added."

saturdaysaint• 15 years ago

Good points. I think that Apple is clearing out the competition before they introduce their competing subscription music and movie services. I predict that they'll introduce these in the next few months.

jimbokun2• 15 years ago

Simple thought experiment: iPhone with iTunes and...nothing else. Android with Netflix, Kindle, Hulu...and the rest of the world's content producers. Which one are people going to buy?

Starting to sound like Mac vs. Windows all over again. I thought the App Store showed that Jobs had learned his lesson that the systems with the most software and content win. Putting that at risk fits the classic folk definition of insanity (same behavior, expecting different results).

pnathan• 15 years ago

I use iPod with iTunes. Music comes from amazon.

Of course, next mp3 player will be some no-name brand, I expect. :-)

diamondsea2• 15 years ago

I've been trying to figure out a reason other than greed for this move, and I think you nailed it: It's a barrier to entry for competing media distribution platforms. Apple makes most of it's non-app-store money off media sales and this would be a less obvious way than "we won't let any other media company on our device" to accomplish that. Great insight!

lwhi4• 15 years ago

I think Apple may have decided to enforce an untenable rule, simply so it can be used as a reasonably large concession when the antitrust machinery slides into gear.

If you are going to be required to give up ground - you might as well grab all the ground you can prior to any punitive action.

billswift• 15 years ago

That sounds like the man who beat his head against the wall; because it felt so good when he quit.

lwhi4• 15 years ago

I know what you mean - this scenario sounds quite backwards, but I'm really having quite a lot of trouble understanding why Apple has decided to go ahead with this.

If they honestly think they can get away with it, I think this might be a signal that they're losing touch with their community.

OpieCunningham11• 15 years ago

If I understand Readability's issue, it breaks down like this:

What they want: For a $1 subscription fee, Readability keeps $0.30 and the publisher/writer of the articles viewed through that $1 sub get $0.70

What Apple requires: For a $1 subscription fee, Apple keeps $0.30, Readability then has the option of keeping $0.30 (30% of $1) or $0.21 (30% of the remainder after Apple's cut) and then the publisher/writer gets either $0.40 or $0.49, respectively.

Why does Readability feel they deserve $0.30 but Apple doesn't? If Apple doesn't deserve $0.30, shouldn't the publisher/writer get the full $1? Without the articles, Readability is worthless. Without Apple, Readability for iOS is worthless.

krschultz• 15 years ago

I think its a little different.

Readability has made a contract with the media suppliers: you get 70% of every dollar from the customer. If Apple takes the other 30%, there is 0% left for Readability.

If they want to make any kind of revenue for themselves in Apple's system, the only option is to give the content creators a smaller percentage and charge a higher price.

It's not really a matter of if Readability deserves 30%, but if Readability deserves any money at all. Apple is basically eating their entire revenue stream.

frossie2• 15 years ago

It's actually worse than that. Readability is passing money to publishers for FREE CONTENT. Its model is not a purchase or even a subscription - it is essentially a donation. I don't have to pay to see this content, I choose to.

I wonder how this affects the Instapaper "back door" to Readability (which is what I use)

I am also wondering where this is goingn to end. Why not ask for 30% off Evernote subscriptions too? Or every cloud accessing iPhone app?

This isn't going to end well.

OpieCunningham11• 15 years ago

I understand that Apple has thrown a wrench into Readability's plans. I'm trying to understand why I should believe that Readability's plans are "fair" whereas Apple's plans are not.

Readability has made a contract with Apple, so I'm not clear how establishing a contract with media suppliers matters (have they? or have they taken it upon themselves to distribute a portion of their revenue due to eliminating the existing revenue model the publisher uses, without the publishers explicit consent?). Readability's contract with media suppliers is firstly contingent on Readability's contract with Apple, if Readability intends to leverage iOS app distribution. Readability cannot provide a contract to media suppliers that is in opposition to Readability's contract with Apple (again, if Readability intends to release an iOS app).

Fundamentally however, Readability's value is derived from processing articles. Readability decided they deserve 30% of any revenue they can acquire from offering that service to readers. Apple's value is derived from supplying an eco-system and they have decided they deserve 30% of any revenue they can acquire from offering that service.

Why does one of those service providers "fairly" get to receive 30% but the other does not?

writetoalok3• 15 years ago

>Why does Readability feel they deserve $0.30 but Apple doesn't? If Apple doesn't deserve $0.30, shouldn't the publisher/writer get the full $1? Without the articles, Readability is worthless. Without Apple, Readability for iOS is worthless.

This is an interesting question that deserves thought. Readability provides publishers/writers with an application and a new medium to distribute their efforts. And for their efforts towards building this new medium, they require a 30% of cut from end users cost.

- Would publishers/writers be able to publish their content in any other way on the iphone. Of course. - Would publishers/writers be better off using another way publishing their content on the iphone. Maybe.

Apple provides iOS API for App writers to distribute their efforts (Apps). Apple takes a 30% (or is it 40%?) cut from the App end users cost for their efforts. So far so good, all sounds fair.

Now Apple (for whatever reasons; we'll go through them soon) enforces that:

- All developers use only iStore for any end user transaction. This may be enforced by Apple on the grounds of providing a consistent and safe end user experience. But its is mostly to do with keeping a tight control over the market (end user) and their revenue stream. - Use only iOS for developing any Applications. Ditto said and actual reasons. - And now Apple also wants not only a 30% cut of the App sales (which is fair), but also a further 30% cut of the subscription revenue stream (which the App publishers have rightly described as exceedingly greedy. But it is also "monopolistic")

So lets view the fairness arguments again. What would be fair for Apple to do so that they are paid a deserving portion of revenue for their efforts? They could mandate that 1. Any paid for App will not encumber additional subscription revenue share (tax), as long as they do not use Apple's streaming resources (is this 100% possible for subscription services?) 2. Any App which is distributed free, but is paid for by a subscription model, will have a revenue share agreement with Apple.

What about the user community and the society as a whole? What is fair for them? - It is definitely fair for the user community to have an ability to use their devices (both hard and soft parts of it) in ways that they seem fit, unless of course it harms anyone else. Although I strongly believe in a "take it as it is or leave it" argument for Apple, I also believe in a code for fair conduct (think "consumer rights") towards consumers. - It is healthy for the society as a whole to have ecosystems for software stacks (iOS), application stacks (iOS API and Apps), and content. It is also healthy for society as a whole to have companies like Apple take profit in certain ways that aid their business. However there is some rights for consumers that must be upheld by society. For instance if an iphone leaks acid causing injury to user, then surely Apple will be held accountable in a court. There is some similarity in Apple leaking because of its revenue share causing financial injury to developers.

All things said and discussed, what all of this really about is, Apple controlling their user revenue stream, and pricing out its competitors in the application stack. iTunes <=> music store iBooks <=> book store so on and so forth.

A lot of those 30% subscription cuts could be going towards development of Apple's competing applications. Apple is most certainly monopolizing its customer base against other developers in its App market. And Apple invited them in the first place and has misplaced their trust. It is a thin line that they have now crossed without much discussion (public).

OpieCunningham11• 15 years ago

> All developers use only iStore for any end user transaction. This may be enforced by Apple on the grounds of providing a consistent and safe end user experience. But its is mostly to do with keeping a tight control over the market (end user) and their revenue stream. - Use only iOS for developing any Applications. Ditto said and actual reasons. - And now Apple also wants not only a 30% cut of the App sales (which is fair), but also a further 30% cut of the subscription revenue stream (which the App publishers have rightly described as exceedingly greedy. But it is also "monopolistic")

>So lets view the fairness arguments again. What would be fair for Apple to do so that they are paid a deserving portion of revenue for their efforts? They could mandate that 1. Any paid for App will not encumber additional subscription revenue share (tax), as long as they do not use Apple's streaming resources (is this 100% possible for subscription services?) 2. Any App which is distributed free, but is paid for by a subscription model, will have a revenue share agreement with Apple.

I'm not sure that's an accurate analysis. It appears you want to define Apple (and iOS) as simply a technical infrastructure service provider: bandwidth, disk space, etc. If that were true, iOS would be effectively identical to Android and no one would complain about this 30% because they'd just hop over to Android without a second thought.

Apple is providing a service to iOS developers: access to the iOS eco-system. Developers are not required to develop an iOS app, they have numerous other options for distributing their application/service. If they want to leverage the iOS eco-system (installed user base, iOS advertising & marketing that Apple pays for, SDK that Apple has developed and maintains that is often considered rather efficient at enabling development of user-friendly applications, payment processing system that is extremely easy for end-users, etc), those developers must agree to Apple's terms of access. In return, Apple believes they can charge fees for various methods in which a developer may choose to use the wide range of features Apple has created in their iOS eco-system.

Readability is, as far as I can determine, nearly identical: they have developed a service that provides access to other people's creative work and Readability charges for that service. As an end user, I don't have to use Readability to access the original creative work. If Readability is "allowed" to charge the content owner 30% to give me that special Readability access, why can Apple "not" charge the developer 30% to give them access to that special Apple eco-system?

My entire point would be moot if Apple required 30% of all revenue from Readability regardless of whether the subscription originated from within the iOS app or from Readability's website - but Apple has not done that, which is exactly why Apple's fee is a fee to access the eco-system (not specifically to use Apple's bandwidth, Apple's storage space, etc).

edit: In fact, on further consideration, why is Readability's business model considered fair in and of itself? They provide a mechanism for a publisher to voluntarily sign up to receive the 70% Readability wants to give them - but does that mean Readability will not function on a publishers content if that publisher does not agree? I don't believe Readability is blocking access to content from publishers that have not signed up. Effectively, Readability is extorting publishers: give us 30% or we'll take everything. Apple on the other hand is simply saying: give us 30% or you can't use our service. The latter is blatantly more "fair" as it only exists with choice. The former requires publishers to actively use resources to block Readability (on a continuing basis) in order for the publisher to maintain their previously established business model. The publisher's choice has been eliminated. How can Readability justify that?

spullara• 15 years ago

"All developers use only iStore for any end user transaction"

This isn't the case. The only state that you must offer the ability to buy in the app and they get 30% of that charge. You can still collect payment outside of the app on your website as well.

ajays• 15 years ago

I believe what Apple is trying to do is to head off the possibility of being scammed: app writers can give away their apps for free, but unlock the full potential only when you "buy" a (lifetime) subscription. This way the writer can keep 100% of the price of the app, instead of just 70%.

Do I agree with Apple? No. But I think this is where they're coming from.

jerome_bent• 15 years ago

Apple already had measures in place to block that 'loophole' without these new rules—or new interpretations of the rules, if you will. Apple banned an update to ReadItLater, last year, because the reviewer believed the developer was attempting to circumvent the in-app purchase: http://readitlaterlist.com/blog/2010/08/version-2-2-rejected...

nhangen2• 15 years ago

I tend to agree with Apple's right to do this, but I can't tell if it's a genius move or a stupid move.

I think this move could further empower Apple, in as much as to put people like Rhapsody out of business. On the other hand, it makes sense to create a hospitable ecosystem, and right now it feels like they are carpet bombing what was once a nice place to hang out.

More of my thoughts here (podcast) http://bluerize.com/free-market-anarchy-020-apple-subscripti...

guelo• 15 years ago

As a developer I made the decision a few years ago to move away from Apple's platforms because of their capriciousness, their extreme secrecy, and their lack of respect for their developers.

I don't know how people invest in their platforms, I'd be constantly scared that Apple would turn around and screw me over.

ChrisLTD3• 15 years ago

The trick is to get in, make your money, and get out before Apple decides it wants in on your territory.

toast76• 15 years ago

I picked up an iPhone 3GS when they came out with intent of developing iOS apps. Even at that time it was clear that playing in someone else's yard meant playing by their rules, and that it was highly likely that I wasn't going to like their rules. I decided to not make an app. Simple decision really.

A lot of developers are now complaining that they're getting burned by what is a reasonably obvious profit motive from Apple. They're not offering an app store because they're good guys. They're offering an app store to make money.

They take 30% of purchases. It only makes sense to take 30% of in-app purchases and related subscription services as well. Did anyone honestly believe that apple would fall for the ebay $0.90 purchase with $90 shipping fee-dodging trick? Letting subs through just opens the door for people to ship free apps with subscription "unlocks", thus cutting out Apple.

The simple fact is that Apple owns the mountain, and if you want to mine their gold you can expect to pay their taxes.

Of course the simple solution is to just build a web app (as these guys have done). Why restrict yourself to Apple's yard and Apple's rules when you can target every device without rules, without restrictions and without a 30% tax? The sooner ever developer realizes this the better off we'll all be.

thought_alarm• 15 years ago

The App Store does have the potential to drive a massive amount new business for an app like Readability. Apple believes they should be paid for that publishing and marketing service and it's hard to argue about that, particularly when comparing to the relative poor performance of other "app stores."

If the App Store fails to bring these developers new business then it doesn't cost the developers anything. If the App Store does bring them new business then it's up to the developers to weigh the cost of the App Store vs. the new business it brings.

Is 30% the right price? Ultimately the market will decide that, because if there's one thing this industry doesn't lack, it's competition.

joe_the_user2• 15 years ago

I'm not impressed with anyone here...

Readability was trusting enough to release their code with a license which allowed Apple to put the code in their product and then freeze readability's product out of Apple's store.

And now the readability folks don't seem inclined to admit their trust was a might miss-placed.

But perhaps that's because the readability model is aiming for a kinder, gentler version of Apple's monopoly. They distributed a "product" that reworking website in a manner that steals the original site's advertising revenue. And then they "offer" to give the authors a different revenue source (along with "offering" a lack of choice concerning how their product is presented).

Edit: And problem with readability isn't in it just distributing a web-site-rewriter in itself but it doing that AND then asking revenues from content providers...

jrockway2• 15 years ago

I wish these open letters said, "we are ebaying our iPhones, removing our other apps from the App Store, and switching to Android and Windows Mobile" instead of "we are going to change our business model just because the default icons you guys pick are so great".

Apple does not care about whiney letters. They might care if there are no more apps for or users of iOS.

nnutter• 15 years ago

Apple, I bought an iPad because I could watch movies in Netflix and read bookmarks in Instapaper, news in Reeder, and books in Kindle. Please send each $37.50 (30% of the iPad sale shared four ways) to each developer for bringing you a customer.

Or, optionally, stop acting like you, as a middle man, provides more added value than the developers that make your platform so damn profitable.

P.S. WebOS still looks pretty damn nice.

trout• 15 years ago

I don't understand the legal ownership fuss of their decision. If they had decided to take 5% instead of 30% there would be no discussion here. The only difference between 5% and 30% appears to be whether or not it's a good business decision. It does alienate a number of applications that have less than 30% margin, but that appears to be Apple's motivation. I would not go so far to say this should be expected, but it's a risk you take when you play with a company that likes to own such a large portion of the experience.

devin• 15 years ago

Avoiding a lot of the discussion here to make a quick but important observation: I suggested in a comment I believe I posted here months ago that Apple would add its "Reader" to the iOS platform.

This is a calculated move on Apple's part to make sure that when they deploys Safari Reader for the iPhone it is /their/ idea and not the folks at Readability.

Shame, shame, shame. I know you're name.

An Open Letter to Apple on the Readability App rejection

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