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Rhapsody passes on Apple's "economically untenable" sub plans

technologizer.com

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Re: Rhapsody passes on Apple's "economically untenable" sub plans

#81

Post by aleemb »

ghshephard wrote: post #41

I've just realized what Apple is up to here - it took me a day, and some of the excellent comments on HN - but I now get it. My inability to see what was going on, was that I couldn't see how Netflix/Amazon/Rhapsody/etc... could operate, profitably, under this plan. The 30% cut would eat their entire margin (and more). And the plan is brutally straightforward and honest, if you just mediate on it for a few days. Appl…

You have it the other way around. It's not so much about apple wanting to monopolize the marketplace as it is about apple defending its own platform. The discussion is platform-centric.

Today Amazon's application on the iPhone sells books. Tomorrow it may sell music and maybe some day even applications (if I am to believe that jail breaking is now legal in the US).

Apple wants to the be "front platform". Any platform that sits in front (or "top" if you prefer) has the upper hand. Browsers sit on top of the operating system and Microsoft tried hard to dwarf browser growth as it threatened the OS itself. In fact, Java's ambitions were similar. Flash is just that. Adobe AIR has already made minor inroads. This is also in line with Jobs' decision to disallow Flash and Java. If Macromedia sold iPhone applications, iTunes would lose gravity.

The case here is a similar one. If vendors build their own stores through their application, iTunes will inevitably crumble. Apple is making a really long term bet that will without a doubt encounter a lot of resistance. But in the long term it wants to perfect the business model.

It will be a first if it works, but it's tricky. Platforms need to be open enough to allow others to build on top but Apple has developed a very unique platform. Unlike Flash or Windows or whatever else, Apple is the gatekeeper for the entire ecosystem. That means it can regulate the platform while others cannot.

Apple has been architecting it's platforms strategy for quite some time now. It is trying to build the perfectly sustainable platform. I am almost certain that they have secret discussions on "platforms architecture".

Exciting stuff.

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#82

Post by joel_ms »

sh4na wrote: post #79
joel_ms wrote: post #76

Earlier quoted context omitted.

The guidelines stipulate that the in-app price must be the same or less than your regular offer. (You could possibly have a separate offer with iOS availability at a price that compensates for Apple's cut, which means you would get Apple's cut from everyone buying iOS availability outside the app.)

Technically, they state you must have the same or better offer. Better isn't the same as cheaper, it can mean more expensive with more features, so an "premium iOS offer with added features" for 30% more could be justified :P

They actually state both "same (or better) offer" and "same price or less" (just not what I wrote :P).

But I still think the idea is to avoid what would be perceived as an Apple tax when buying subscriptions in-app.

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#84

Post by theBobMcCormick »

SoftwareMaven wrote: post #50
theBobMcCormick wrote: post #35

Earlier quoted context omitted.

Could be good news for the Android and Windows Phone 7 ecosystems. Seems like it'd be easy for most of these publishers and services to re-focus their mobile strategies on platforms that are more friendly to their business model.

But if end-users don't see any loss (e.g. Apple provides similar capabilities to Rhapsody, et al), then it won't matter. People won't leave the iPhone for another phone over this. My prediction is that Apple will make sure it has similar capabilities.

I'm not sure "similar" capabilities will always be enough. If Apple succeeds in chasing off Amazon and B&N, then WP7 and Android phones will look much more attractive than iPhones to Kindle and Nook owners.

Netflix availability so far has been an advantage that iPhone/iPad has over Android, but that'll turn around completely quite quickly if Netflix get's chased off the IOS platform by Apple's 30% cut.

Let's get serious. iBooks and iTunes are good, but are they really going to be able to take on Pandora, Rhapsody, Last.fm, Amazon, B&N, Netflix, Hulu, etc. all at once?

By pissing off all the content providers at once Apple is basically gifting a huge chunk of the app ecosystem to Android and/or WP7.

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#85

Post by kemayo »

elai wrote: post #65
kemayo wrote: post #49

Earlier quoted context omitted.

It is important to draw a distinction between "the Kindle" (the hardware device sold by Amazon) and the "Kindle Store" (Amazon's e-book sales platform). The Kindle Store, yes, is all about the DRM. And it's the "platform" accessed by the Kindle app on assorted devices. However, if you're talking about the hardware device then it's entirely reasonable to ignore the DRM issue. You plug it into your computer and it moun…

The iPad also displays and sync ePubs with no DRM with iTunes, same as the kindle.

Yeah, I didn't want to imply that iOS was forcing DRM on people. I just see the argument that the Kindle == DRM far too much, and wanted to correct it. :)

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#86

Post by bradleyland »

ghshephard wrote: post #41

I've just realized what Apple is up to here - it took me a day, and some of the excellent comments on HN - but I now get it. My inability to see what was going on, was that I couldn't see how Netflix/Amazon/Rhapsody/etc... could operate, profitably, under this plan. The 30% cut would eat their entire margin (and more). And the plan is brutally straightforward and honest, if you just mediate on it for a few days. Appl…

It's not customer-centric. It will hurt innovation, because fewer players will participate. I wrote about the topic at some length here:

http://www.bradlanders.com/2011/02/16/apples-30-vig-is-bad-f...

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#87

Post by anthonycerra »

anthonycerra wrote: post #14
alanfalcon wrote: post #5

Time to pull the iOS app, build a mobile web app, and have your customers send e-mails to steve@me.com expressing their displeasure.

I'll do one better than email Steve. This will be my last iPhone.

My startup is sponsoring a campaign to raise awareness for this issue.

www.mylastiphone.com

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#88

Post by jamesk2 »

qeorge wrote: post #52
evgen wrote: post #48

Earlier quoted context omitted.

We want to be able to listen to Pandora and sync with our Kindle to read e-books. The vast majority of the iOS userbase just want to listen to music and read e-books and do not care as much about what delivery mechanism provides the content. As much as I hate to admit it, they are not really going to miss Pandora or the Kindle app as much as we might like to hope. [For future reference, try not to use the Kindle as a…

My mother recently said to me: "My friend showed me how to use Pandora. I love it, but you probably wouldn't like it because its all my music." Point being, I think you're drastically underestimating Pandora/Netflix accessibility and market penetration.

This would make a nice video campaign for Pandora. Various different types of people saying "It's all my music." with references to the music they love.

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#89

Post by dmfreck »

dablya wrote: post #58
zach wrote: post #43

Earlier quoted context omitted.

I would be surprised if the thought of using in-app purchasing for subscriptions even moved their needle of interest at Netflix. Again, if you're just providing a conduit for your subscription service, all this means is that you can't provide a direct call to action in your app. They seem like the prototypical example of an company that couldn't care less about using the App Store as an app-based advertisement or pur…

My understanding of the new rule is if your app is used to consume content bought outside of the app, then your app must offer a way to purchase content/subscription through the app for the same price, with apple getting 30%.

Precisely. Netflix doesn't get a free pass.

Re: Rhapsody passes on Apple's "economically untenable" sub plans

#90

Post by dmfreck »

theBobMcCormick wrote: post #84
SoftwareMaven wrote: post #50

Earlier quoted context omitted.

But if end-users don't see any loss (e.g. Apple provides similar capabilities to Rhapsody, et al), then it won't matter. People won't leave the iPhone for another phone over this. My prediction is that Apple will make sure it has similar capabilities.

I'm not sure "similar" capabilities will always be enough. If Apple succeeds in chasing off Amazon and B&N, then WP7 and Android phones will look much more attractive than iPhones to Kindle and Nook owners. Netflix availability so far has been an advantage that iPhone/iPad has over Android, but that'll turn around completely quite quickly if Netflix get's chased off the IOS platform by Apple's 30% cut. Let's get seri…

You are absolutely correct. I've invested hundreds of dollars into the Kindle platform. If, suddenly, I can't access this content then I will go where the content is. Apple's platform is compelling because content providers have set up shop there. That's the synergy that Apple has seemingly ignored. I can go anywhere for $0.99 fart apps.
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