Rhapsody passes on Apple's "economically untenable" sub plans
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Rhapsody passes on Apple's "economically untenable" sub plans
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Re: Rhapsody passes on Apple's "economically untenable" sub plans
#2AWESOME!
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#3It's deeply disturbing that the people at Apple feel entitled to radically change the rules of the game whenever it suits them. This is like an extortion racket. Submit to their demands today only to find out what new whim strikes them tomorrow. How can iOS legitimately be called a "platform" when Apple pulls a leg out from under it every six months?
Thank god Android scares them. I can only imagine what they'd dare without any competition.
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#4Given the challenges subscription services already face re:margins, giving away another 30% is game over.
If this stands, the labels are probably going to have to give up on subscription services as a category, or lower their wholesale prices dramatically.
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#5Time to pull the iOS app, build a mobile web app, and have your customers send e-mails to steve@me.com expressing their displeasure.
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#6Might work out well for Apple as do most things they do - Amazon pulls out, garden-dwellers dwell on whatever iBooks offers, Rhapsody and Pandora pull out - there is only iTunes!
Apple is in a position where they can get very crafty and evil - just enough to get away with it all without being a monopoly - there is Google to help them there! Envious position for a company indeed!
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#7Of course Rhapsody can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me.
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#8Given the challenges subscription services already face re:margins, giving away another 30% is game over. If this stands, the labels are probably going to have to give up on subscription services as a category, or lower their wholesale prices dramatically.
Rhapsody doesn't have "another" 30% to give. Their margins are probably something like 5%. Crapple is demanding 30% of the sale price, which leaves Rhapsody with a 25% loss.
Since that is economically infeasible, Apple is effectively mandating that they are the only ones who can sell content on their platform.
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#9What's going to get really interesting is seeing where Apple draw the line with "subscription apps".
The Rhapsody and Magazine apps of this world seem fairly clear cut. Kindle is somewhat less so (since books aren't a subscription service - something most blogs seem to miss). But what about these "Go to my PC", Salesforce.com, or other SaaS sites that basically provide free iOS apps for expensive subscription plans? Are these companies now all going to start adding in-app sign-up options and paying Apple a cut?
Re: Rhapsody passes on Apple's "economically untenable" sub plans
#10Of course Rhapsody can't sell their stuff for a 30% margin. It's not their own stuff! They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable? The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of pub…
It's not always this way. Think about, say, a Pandora subscription - thin margins, but provides a real value added service that is well above and beyond that of a mere distributor.
Can they afford to give Apple a 30% cut of all revenue?
It's completely misguided to characterize all payment through a mobile app as cutting out the middleman. In a great number of cases (i.e. subscriptions) Apple role is nothing more than a payments gateway + lead generation. Does that make them deserving of 30% of your entire revenue stream?