Apple Wants A Cut Of Subscriptions
Lots of hemming and hawing over Apple wanting a 30% cut of subscriptions and other content purchased through iOS apps.
I’ve said in the past apps are “end runs around the browser,” well, many app makers are doing subtle “end runs around apps.” Buy Kindle content on Amazon proper and view it in your app. Sign up and pay for a Netflix account and use an app to watch movies. Apple will continue to allow this activity to happen elsewhere, but they’re going to start requiring apps to allow for a similar purchase mechanism within the app itself — and therefore through the iTunes Store — where they will take their 30% cut.
So yeah, this is pretty ballsy, and personally, that 30% fee seems rather steep.
Note that on eBay, there are listing fees, plus a 10% fee on any successful auction. Their argument is the whole creation of the marketplace and bringing all the buyers together is worth a price — any individual seller couldn’t attract that many customers on their own. And looking back on the publishing industry’s woes over the past years, individual publishers have had difficulty maintaining subscriptions.
Second, perhaps this is a shrewd business calculation. Apple comes out with a percentage number that feels prohibitively high. Google presents a similar plan. Later, Apple lowers their percentage to 10% to match Google’s. Publishers feel they’ve won something, but in reality Apple is now taking a cut where before there was none. Maybe 10% was their original target and Apple has just finagled the publishers into thinking it’s a good deal.
Lastly, I’ve meant to sign up for a digital, iPad subscription to The Economist for a few months now. I just haven’t gotten around to it (it just seems like such a pain in the ass to sign up for a whole new login / pass and enter all my purchasing info on a website). All my payment information is ready to go in iTunes, and I would have already purchased a subscription had that option been available through the iPad and my iTunes account.
Ultimately, the success of this whole Apple plan depends how important these kinds of impulsive lost sales are to publishers. I personally feel they’re worth paying a cut to Apple, because they are sales that are essentially lost. A dead-tree, paper subscription is a non-starter, and purchasing something similar through a website increasingly feels like a barrier, not a convenience.
Yes, the implications for Kindle Books and Netflix are vast, but from a user standpoint I want the convenience of purchasing such content on an iOS device. Such a nicety might actually increase sales.