You probably have heard about Apple’s announcement Tuesday that effectively takes a giant bite out of the revenues of the subscription services that are sold from the App Store. Articles abound, but here’s the best summary so far from paidContent.org:
[Tuesday] Apple (NSDQ: AAPL) announced its intention to tighten its hold on the payment for and the delivery of content through its successful iTunes platform. …Apple will require that all content experiences that can be paid for in an Apple app must be purchasable inside the app, with Apple collecting its 30% fee. The app can no longer direct you to a browser or some other means for completing a transaction. Crucially, the in-app purchase offer must be extended at the same price as the same offer made elsewhere. Though the announcement of the subscription model was the triggering event, the policy extends to all paid content.
So with that fodder, I need to explore (for my own sanity) what the Apple announcement means:
Apple’s greed is unfettered. A “duh” for most, but I’d be remiss if I didn’t riff a bit on this. The fact that it continues to reach into the pockets of its app creators is understandable and a good idea to make some more ka-ching. But, the fact it is demanding 30% of apps that are subscription services seems completely onerous and disrespectful to the services that already have razor thin margins. One could say in turn that the content owners need to reduce their take, but then we just get into a blame game that I don’t have the stomach to get into right now…
Apple may be paving the way for the creation of its own subscription services. With this stiff toll for services to play within the App Store – and outside of it with their requirement that any deal is the same as within the App store – services like Pandora and others might just decide to pick up their toys and go elsewhere. This conveniently clears a way for Apple to offer more of its own subscription services.
Non-Apple platforms may get a boost as services flee the tyranny of the App Store. As services bolt, they need somewhere to go. So that means – possibly – that Android platforms will begin getting more services. Android penetration begins to deepen, and perhaps Apple’s hold on the market begins to falter.
However, voila, Google made an announcement yesterday regarding One Pass, which is a payment system that enables publishers to set the terms for access to their digital content. OnePass counters almost point for point the program that Apple set forth. The best commentary I found out there was once again in paidContent.org, so please head there for more context.
I love Google’s timing, and its panache in countering Apple. But, as GigaOm aptly points out, do customer’s really want all their subscriptions in one place? Not only that, will customers really subscribe and pay for multiple services? Time will tell.
In the meantime, subscription services all over the world are spending this week trying to figure out how on earth they can continue to operate under Apple’s draconian rules.
What do you think? What are other implications of Apple’s approach with subscription services? What does it mean for you?