iLounge

1

This the kind of greed that could drive me away from Apple to a competitor.  If a publisher wants to give me a free IOS subscription because I am a print subscriber (or for any other reason), there is no incremental revenue to the publisher for Apple to share in.  If Apple forces them to charge me for something that I receive free today, I will take my revenge on Apple by taking my business elsewhere.

Posted by Jim on January 14, 2011 at 12:19 PM (PDT)

2

This does seem wrong, and smacks of profiteering.

Posted by Cyberman in nr Heathrow, London on January 14, 2011 at 12:37 PM (PDT)

3

I dislike what Apple is doing on principle - seems to be anti consumer, and just bad business in terms of growing the iPad as a viable e-publishing platform, but Apple does assume the overhead with all the free and paid “goods” in the iTunes store. For their 30% cut, Apple pays all the micropayment fees for the transactions (the single biggest cost), plus server storage space, store server time, and the bandwidth. So, for all that free software and free ePubs that Apple offers, Apple absorbs the costs for server space and time plus the bandwidth.

Yes, it’s sort of a catch-22: Apple won’t let them distribute media for the iPad any other way than through the iTunes store, but it is Apple’s dime these publishers want to spend for their own promotion.

Posted by Code Monkey in Midstate New York on January 14, 2011 at 1:20 PM (PDT)

4

In my opinion, Apple could structure this in a way that the publisher pays the 30% that would have been due had the subscriber purchased the app outright. This would allow the publishers to give away the app as they see fit and still not cut Apple out of their fair share. Like #3 stated, Apple does have an investment here. They are providing an infrastructure to distribute this content. Why should they take the hit because the content provider wants to appease their subscribers with freebies?

Posted by Mitch on January 14, 2011 at 1:54 PM (PDT)

5

I wonder if this game of chicken is all to force some of the bigger fish to start paying a direct fee to Apple for distribution of their otherwise free (through the iTunes Store at least) goods.

The more or less 30% cut model has worked well for many, many years. Music labels get to negotiate where that cut falls exactly, but it’s always in the ballpark, and the software side has just been a fixed 30% from the start. The ePublishing starts to blur the lines of where the product starts and stops and the model doesn’t really fit.

Should Apple be able to demand a 30% cut of the paper product if it’s tied to electronic forms (that’s where they started from)? Seems extreme. Should publishers be able to foist hosting and distribution of ePub forms off onto Apple (what they’re trying to do)? Seems extreme as well. The sensible compromise would seem to be to work out some sort of distribution fee for these free but still clearly commercial products.

Posted by Code Monkey in Midstate New York on January 14, 2011 at 2:09 PM (PDT)

6

The funny thing is, if the mags don’t like this arrangement, they can just “webify” their mag. They don’t need an app; they can create a really engaging webapp style mag, which is accessed through the browser, and Apple can’t stop users from accessing that.

But if they want a real “app” for the iPad, then they have to play by Apple’s rules.

Seems like a fair trade.

Posted by ChimpBush McHitlerBurton on January 15, 2011 at 3:44 AM (PDT)

7

@6: True enough in one sense, but there’s three reasons why that’s not what they want:

1. That business model has been tried and, if not failed exactly, hasn’t exactly lit the world on fire.
2. It makes connectivity a prerequisite. The advantage of the app format is that you can carry around entire runs of magazines offline.
3. Security. Any web version, subscription or not, is easily duplicated and shared once any one person with the sub decides to do so. Apple, on the other hand, has pretty good chains with their DRM. It’s not unbreakable, but for these webzines, even if you hypothetically break the file encryption, what do you do with it? There’s no way to actually view it anywhere except the app, and it only goes through the iTunes store to get the files “personalized” to your account.

I’m beginning to believe this all a bunch of posturing so Apple can create a new revenue stream since both parties positions are clearly going to be unacceptable to the other.

Posted by Code Monkey in Midstate New York on January 15, 2011 at 7:55 AM (PDT)