Apple try to justify the in-app price gouging

Apple issued a press release today about the in-app subscription. There's nothing truly new here, but this press release does give us a look inside the greedy mind of Steve Jobs. Here's what Apple said about the in-app option:

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

Sure, if Apple brought in a customer then they deserve a cut. But they didn't. Apple didn't develop the app, Apple didn't promote the app, and Apple didn't try to sell the subscription. All Apple did was develop the iOS platform, and that doesn't count as bringing in a new subscriber.

It gets worse, actually. Apple also killed off any chance that we might see a reading app that only reade ebooks sold elsewhere:

Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

If we apply this same rule to ebooks, then this means that Amazon can't offer a Kindle app if the app doesn't sell ebooks.

On the upside, Apple's greed will push developers towards web apps, which will hopefully be platform agnostic.

About Nate Hoffelder (11385 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

9 Comments on Apple try to justify the in-app price gouging

  1. Does that mean zinio, economists, and all other apps built by magazines publishers will have to pay 30% to apple??

    • Yes.

      To be more exact, they will have to offer the option of buying from inside the app, and Apple will get a cut of that sale.

      • Even more, the subscription details say publishers of subscription content have to remove links to their websites. They ‘can’ or ‘may’ sell their subscriptions from their own sites. Imagine, ‘letting’ the subscription publishers do that.

        Same person said about Sony, during the e-reader book-app rejection that if an e-book app sends readers to buy at the vendor’s bookstore, then there must -also- be an option to do the one-click Apple istore buy.

        They could not convince any online store to give them 100% of the bookseller’s take, so that is definitely up in the air for today, since today’s news really was focused on the subscription-content model.

        See http://bit.ly/m-aaf – especially the update link at the top for Mashable’s take, which is the same as mine. I’ve no doubt they’ll try to take a cut from ebook apps too but it can’t be 100% of seller’s margin, and a link to the seller site (as opposed to subscription-publisher, who pockets 70%) must be available . I figure they’ll try to get at least 5% for the eBook stand at a heavy street corner.

  2. Most people, like me, bought the iphone and ipad because of the software that was available. Mostly non-Apple software. Under Steve’s logic Apple owes those software developers 30% because they actually brought a customer to the iOS platform not the other way around. Now car makers should get a cut of the gas purchased for use in the car. Microsoft should get a cut of all app purchases used on Windows machines.

    Done with apple.

    These are the last Apple products that I purchase and I will go out of my way not to make in app purchases

    • I agree with Tim.

      But I’m confused: an update to Kindle for iOS just showed up yesterday. Presumably it was approved by Apple. Nothing’s changed about the purchasing workflow. So does this mean the subscription policy will not be applied to ebook purchases?

  3. “Apple’s greed will push developers towards web apps…”

    or. perhaps, android.

  4. And people call Microsoft greedy because they rake in 4% of all the money generated in the Windows ecosystem.
    Of course, Microsoft treats consumers as free-agent customers, whereas Apple *owns* outright the buyers of their products so they can chrage for access to them.

  5. Apple is the MAN!
    Where’s that lady in red shorts wielding a sledge hammer?

  6. I was using my i phone tonight to look at movie listings with the Fandango app. Does that mean by this summer Fandango would have to give Apple 30%? I doubt that they make but a buck or two off each movie ticket sold.

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