Subscription services

[DaveSt]

.. snipped ...

Second, this means nothing to the consumers, because it will not affect pricing of any products. Music is already priced to where Apple has the bulk share of the market. If it were not for Apple, everyone would probably be paying $1.99/track from all sources. That is what has Rhapsody and others upset, because they cannot compete with the price level Apple has set. The book and magazine sellers will determine if they want to sell on iTunes. The only difference is that if you buy from another source than iTunes, you will do it on your full computer. What is the big deal there?

You are leaving out the part that is potentially the big deal here in my opinion. This is the other part, quote from Apple:

"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,"

This probably doesn't affect Amazon so much because I'm not sure one time purchases of ebooks can be considered subscriptions. However, the reports I have read state that Amazon must offer in-app purchasing to the Kindle app, so who knows where that one is going. If Amazon is required to offer in app purchasing I see that as a problem.

This does however affect services like Netflix and Rhapsody which according to the above quote have to offer subscription through the app and thus pay 30% to Apple. If this is a one-time cost then that is fine but I have not seen the clarification stated by Apple anywhere.

As far as Apple approving and hosting the apps themselves, that is a self imposed cost. I'm not going to shed any tears for Apple because they require all applications to go through the App Store. Looking at their last few quarterly profit numbers I feel pretty safe in saying the application approval process isn't hurting the bottom line too much.

 

[Superbike81]

30%?

WOW!

Isn't that a bit excessive for being a content host?

Or is this 30% about the industry standard?

 

[DaveSt]

30%?

WOW!

Isn't that a bit excessive for being a content host?

Or is this 30% about the industry standard?

30% isn't actually that bad. Until recently Amazon was charging Newspapers, bloggers, and periodicals 70%. They have recently lowered that rate to 30% for some publishers. Amazon also charges 15 cents per megabyte for the content delivery. I do believe that those charges are only for content delivered to Kindle devices however because that is what subsidizes the "free" 3G service to those devices. Publishers are not charged for delivery to non Kindle devices.

I have no problem with Apple charging for real subscription based content such as magazines made for iOS. I only have a problem if Apple requires Amazon to make their ebooks available to in-app purchasing. The rest of what Apple is charging seems to be reasonable assuming they don't try to take a cut from monthly services like Netflix.

 

[DaveSt]

I stumbled across a VERY interesting analysis of this issue that puts things in a little different light. If you read all the way to the end, it seems like Amazon might still come out the winner here (for subscriptions, NOT ebook sales) even if they are forced to sell within the iTunes framework. This article does a much better job of explaining the fee structure than I ever could, and some of the numbers in my previous post are actually a little low. I didn't know Amazon charged so much for non US and UK delivery for example. Anyhow, the following link is worth a read.

AppleInsider | Inside subscription content: Apple iPad vs Google One Pass vs Amazon Kindle

 

[Thphilli]

I stumbled across a VERY interesting analysis of this issue that puts things in a little different light. If you read all the way to the end, it seems like Amazon might still come out the winner here (for subscriptions, NOT ebook sales) even if they are forced to sell within the iTunes framework. This article does a much better job of explaining the fee structure than I ever could, and some of the numbers in my previous post are actually a little low. I didn't know Amazon charged so much for non US and UK delivery for example. Anyhow, the following link is worth a read.

AppleInsider | Inside subscription content: Apple iPad vs Google One Pass vs Amazon Kindle

Skimmed through it and there was too much bias to say that its worth a read. Just one example, they call the Xoom an $800 device when there is officially a model at $600. I wouldn't take seriously any publication that called the iPad a $829 device.

 

[DaveSt]

Skimmed through it and there was too much bias to say that its worth a read. Just one example, they call the Xoom an $800 device when there is officially a model at $600. I wouldn't take seriously any publication that called the iPad a $829 device.

There is certainly some bias there (with a website like "Apple Insider" it is sort of expected) but I thought the breakdown of the pricing structures was pretty interesting. The author did ignore regular ebook sales which is what I am most concerned about.

 

[Thphilli]

Skimmed through it and there was too much bias to say that its worth a read. Just one example, they call the Xoom an $800 device when there is officially a model at $600. I wouldn't take seriously any publication that called the iPad a $829 device.

There is certainly some bias there (with a website like "Apple Insider" it is sort of expected) but I thought the breakdown of the pricing structures was pretty interesting. The author did ignore regular ebook sales which is what I am most concerned about.

Here is a reasonable comparison that I found:

Apple subscriptions vs Google One Pass subscriptions

 

[Prasius]

Second, this means nothing to the consumers, because it will not affect pricing of any products. Music is already priced to where Apple has the bulk share of the market. If it were not for Apple, everyone would probably be paying $1.99/track from all sources. That is what has Rhapsody and others upset, because they cannot compete with the price level Apple has set. The book and magazine sellers will determine if they want to sell on iTunes. The only difference is that if you buy from another source than iTunes, you will do it on your full computer. What is the big deal there?

Apple gets a lot of attention because they are so good at what they do. The catch is, what they are doing here, is nothing new. It is a correction on a problem that was going to hurt their finances in the future, so they fixed a leaky hole in the boat.

I disagree - if providers drop support for apple (which they may do if a 30% cut is going to make what they do unprofitable), this will directly hurt Apple customers, and Apples future sales. The 'ban' on providers increasing the cost inside the App is going to hurt consumers as well - after all, apple is making their devices 30% more expensive to provide content on, but the providers cannot recoup that 30% from Apple users alone, in effect, the users of other platforms (digital & traditional) will be forced to subsidise us. Now, even with my apple fanboism, I cant see how that is fair, or good business practice.

I also don't see this as Apple "correcting a problem" - I see this as Apple just noticing the cash cow which, until now, has been quietly grazing in the corner and instead of patiently milking it every day... They're going to slaughter it...

I can understand Apple wanting to get some revenue from companies who are fully exploiting their devices, but I think this is an exceptionally bad way to go about it.

 

[David79]

Um how would we be paying more if it were not for apple? I used to download all my music from walmart.com and it was .88 so I dont know where you got that from but it is so not true at all. I agree with some of the others, in the long run, it is us who will get screwed and end up paying more for what we already have.

Oh and for the record I really dont think Steve jobs in hurting for money, I mean c-mon already give me a break with the poor apple oh no they are not making enough money. We could only dream of having as much money as apple!

 

[Thphilli]

Um how would we be paying more if it were not for apple? I used to download all my music from walmart.com and it was .88 so I dont know where you got that from but it is so not true at all. I agree with some of the others, in the long run, it is us who will get screwed and end up paying more for what we already have.

Oh and for the record I really dont think Steve jobs in hurting for money, I mean c-mon already give me a break with the poor apple oh no they are not making enough money. We could only dream of having as much money as apple!

Yea, I don't know where that came from at all. Its a flat out lie that Apple keeps market prices low. Take amazon for example. Amazon had agreements with pretty much all book companies to release ebooks for 9.99. Then Apple came along and told the book companies they could charge whatever they wanted. It took some pretty heavy handed practices on Amazons part to bring prices back down after Apple completely screwed consumers over with that move, and they still haven't dropped fully. Amazon fought to keep prices low and Apple completely ruined what they fought for.

 

[DontUnderstandMyIpad]

I stumbled across a VERY interesting analysis of this issue that puts things in a little different light. If you read all the way to the end, it seems like Amazon might still come out the winner here (for subscriptions, NOT ebook sales) even if they are forced to sell within the iTunes framework. This article does a much better job of explaining the fee structure than I ever could, and some of the numbers in my previous post are actually a little low. I didn't know Amazon charged so much for non US and UK delivery for example. Anyhow, the following link is worth a read.

AppleInsider | Inside subscription content: Apple iPad vs Google One Pass vs Amazon Kindle

That article does have some very illuminating points.

Do I understand it correctly, that Amazon charges both publishers and customers for downloading ebooks onto the Kindle? Because I always pay £1.5 for the delivery, so I was rather surprised to read that publishers have to pay as well.

Or perhaps the article is only looking at the US price structures, where downloading onto Kindle via 3G is free.

 

[DaveSt]

That article does have some very illuminating points.

Do I understand it correctly, that Amazon charges both publishers and customers for downloading ebooks onto the Kindle? Because I always pay £1.5 for the delivery, so I was rather surprised to read that publishers have to pay as well.

Or perhaps the article is only looking at the US price structures, where downloading onto Kindle via 3G is free.

The way I read it is that the delivery charges are to the publisher, not the customer. The 15 cents per megabyte delivery charge is to the publisher to pay for the 3G service.

 

[Prasius]

Because I always pay £1.5 for the delivery, so I was rather surprised to read that publishers have to pay as well.

Or perhaps the article is only looking at the US price structures, where downloading onto Kindle via 3G is free.

Where do you live? (given the use of the pound sign..).

I've never had to pay for kindle ebook delivery on my iPad

 

[DontUnderstandMyIpad]

Where do you live? (given the use of the pound sign..).

I've never had to pay for kindle ebook delivery on my iPad

My Kindle is connected to an UK bank account.

The 1.5£ or $2 charge is always added to the ebook price as a one-time delivery fee. So only I were too download the ebook a second time, would the 3G delivery be free.

Edit: I am always buying from the US kindle store. Does the pricing change, if I were to buy from the UK kindle store? I haven't been able to find out what exactly changes for me, so I refused to change the store location.

 

[Seadog]

How quickly we forget. Apple was directly responsible for the music moguls giving up DRM. Jobs was the one who got us the right to share songs over several devices, and to legally make digital copies of CDs we own. He established the standard pricing which sets a three tier price, with most being at 99 cents, albums at $9.99. Before, pricing was all over the place. Amazon book pricing was an attempt to do the same with books, that Apple did with music. If Apple was offering higher prices on books, don't you think they would have a lot more in iBooks. Apple is having trouble with the publishing industry because the publishers would not be the fat cats any more. Amazon made some bargains, but they are not pushing the publishers hard to make an effort. Jobs is a crusader, with the same powerful drive that has pushed Apple to the top, pushing the media industries to a new reality.