Apple Mafia wants 30% Cut of App Subscriptions

Tom Keating : VoIP & Gadgets Blog
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Apple Mafia wants 30% Cut of App Subscriptions

mafia-cartoon.jpgApple plans to take a 30% cut of all subscriptions on the iPhone & iPad. According to Techcrunch, Steve Jobs explained:
“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing. All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”
This is a game changer! Will taking a 30% cut of 3rd party subscriptions cause a mass exodus of developers to Google Android? Maybe. But customers will still buy iPhones because they like how easy it is to use, it's features, and easy 1-click purchasing. But the new cost model of giving 30% to Apple could cause apps on Android to be cheaper, which will cause an increasing customer exodus over time - especially as the Android improves it's UI and experience to match the iPhone.

I'm an iPhone user myself and I like the iPhone, however a 30% cut seems a bit steep to me. Maybe a one time 30% cut or 30% cut of the 1st year subscription, but the ongoing 30% cut makes me think of a mafia boss that wants his ongoing cut for doing absolutely nothing. Sure the mafia guy argues he's offering "protection" and I'm sure Steve Jobs would argue his iTunes store offers credit card fraud protection and easy 1-click purchasing & centralized billing. Ok, I get that. And you are allowing developers to keep 100% of the revenue if "the publisher brings an existing or new subscriber to the app." But c'mon, you know full well most people install iPhone/iPad apps from the device itself, including subscription apps.

Take for example: Suppose I'm not currently a Netflix streaming subscriber and I know I can 1-click subscribe to their streaming service using my iPhone as opposed to going to www.netflix.com and signing up, entering my address & billing info, etc. obviously I'm going to go the easy route and do it from the iPhone/iPad. Even though the iPhone/iPad device had nothing to do with me signing up with Netflix. I was already aware of Netflix but simply chose to sign up from the iPhone due to convenience reasons. Why should Apple get 30% for that?

I have an idea, how about a check box during sign-up that says "How did you hear about this app? a) Knew about it already or b) Discovered it via the App Store". If users do indeed choose option b), then by all means take your 30% cut, since they did indeed bring the developer a customer. But to blindly assume you brought the app developer a customer is arrogant, greedy, and downright unfair. You Apple are the Tech Mafia of the 21st Century taking the throne from Microsoft, which had some unfair practices back in the 20th century.


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