4 ms·

I wonder if they are right about having to give 30% to Apple in this case. From what I read it sounds like you are only supposed to do that when you allow peop

by st3fan 16y ago

I wonder if they are right about having to give 30% to Apple in this case. From what I read it sounds like you are only supposed to do that when you allow people to actually register / sign up for the service from the iOS app. If you already have an account and you simply login to use the iOS app as a 'companion' app, there is no Apple greed involved. No?

bengl3rt 16y ago
I would be interested to know this as well...
msbarnett 16y ago
If you allow people to subscribe outside the app, you also must add functionality to allow them to subscribe through the app, and subscriptions through the latter mechanism will cost you the 30% Apple Tithe. A lot of companies just can't afford to have a group of users who cost the same as everyone else but only bring in 70% as much revenue.
- mryall 16y ago
  > A lot of companies just can't afford to have a group of users who cost the same as everyone else but only bring in 70% as much revenue. True, but it now seems like those who can are going to be the companies who succeed on iOS. It's sad to say it, but this is another situation where companies will need to adapt or die.
  - msbarnett 16y ago
    That's one possible outcome. Another possible outcome is the one in which iOS, now lacking access to Kindle, Netflix, Evernote, and anything else that made it the least bit useful and interesting, gets kicked to the curb in favor of something that actually supports a lot of consumers' interests. Frankly, the latter is a hell of a lot more likely looking from where I'm sitting.
    - deleted 16y ago
      [deleted]
    - netcan 16y ago
      You're assuming Apple is stationary here. At the moment, app availability is still much better for iOS. If that changes, they can soften their policies.
    - theBobMcCormick 16y ago
      This seems like a particularly insane time for Apple to risk losing subscription apps like Netflix, Evernote, Kindle, etc. What with Android sells now far out-pacing iPhone sales and WP7 making a fair attempt at getting lets under itself. IMHO, they could have pulled this off a year or 2 ago because developers had nowhere else credible to turn. Now, they do.
      - sahaj 16y ago
        I think Apple is counting on platform fragmentation to win here. Apple may be thinking that with WebOS, WP7, and Android, these big companies will probably get their biggest profits from Apple if Apple continues to be the biggest shareholder within the mobile platforms.
        theBobMcCormick 16y ago
        Unless I'm drastically misunderstanding the numbers, Apple already isn't the biggest shareholder in mobile platforms (http://techcrunch.com/2011/02/09/gartner-android-os-sales-trumps-ios-and-rim-grew-888-percent-in-2010/ http://techcrunch.com/2011/02/09/gartner-android-os-sales-tr...) That's why I think this strategy is suicide for Apple. They can reach more users on Android without having to pay a 30% toll.
- tomkarlo 16y ago
  That depends on your marginal cost of supporting an incremental user. For most Internet services, that marginal cost approaches zero. 30% sounds like a lot of commission versus real world purchases but when gross margin is close to 100% on an incremental subscriber, it's not nearly as egregious an ask. To make what I'm saying more concrete: For a physical object, it's not uncommon for the cost of the item to be 90% of its price. So the seller makes 10%, and a "reasonable" 3% commission on sales price = 30% of the profit. Whereas for a totally virtual service there's a large fixed cost to set it up (programming, servers, etc) but relatively little "per user" cost. Cost per unit approaches zero, marginal profit approaches 100% of price, and 30% of price is approximately 30% of the marginal profit from selling an extra unit.
  - lukifer 16y ago
    > ... relatively little "per user" cost. This makes a lot of assumptions about the business model of developers. For a BaseCamp-like product, it is mostly true, support costs notwithstanding. But a video- or music-streaming service that pays out to content providers on a per-item basis has much more in common with a brick-and-mortar retailer when it comes to profit margins.
    - tomkarlo 16y ago
      I'm not saying it's great for every online business, just that it's also not right to see 30% and assume that's a wildly inappropriate rate. It's also not entirely impossible that Apple realizes that the music/book/video streaming services are one of the few virtual products with material per-user costs, and adding this kind of surcharge will drive more users to their iTunes services.
- rbritton 16y ago
  I haven't been able to find it -- does that requirement require that the price be the same for both methods? That is, can you charge in-app users $10 and non-app users $7 so the net is the same?
  - armandososa 16y ago
    Yes, it's a requirement.
  - msbarnett 16y ago
    That's covered by guideline 11.13, which reads: "Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions."
    - tomjen3 16y ago
      Many only shops will show a price that you pay, plus whatever it costs to get a credit card transaction. You could do the same here, since it doesn't say "at the same price or less including all fees". But then again Apple would properly just alter the rules.

by st3fan 16y ago

bengl3rt 16y ago

I would be interested to know this as well...

msbarnett 16y ago

If you allow people to subscribe outside the app, you also must add functionality to allow them to subscribe through the app, and subscriptions through the latter mechanism will cost you the 30% Apple Tithe. A lot of companies just can't afford to have a group of users who cost the same as everyone else but only bring in 70% as much revenue.

mryall 16y ago
> A lot of companies just can't afford to have a group of users who cost the same as everyone else but only bring in 70% as much revenue. True, but it now seems like those who can are going to be the companies who succeed on iOS. It's sad to say it, but this is another situation where companies will need to adapt or die.
- msbarnett 16y ago
  That's one possible outcome. Another possible outcome is the one in which iOS, now lacking access to Kindle, Netflix, Evernote, and anything else that made it the least bit useful and interesting, gets kicked to the curb in favor of something that actually supports a lot of consumers' interests. Frankly, the latter is a hell of a lot more likely looking from where I'm sitting.
  - deleted 16y ago
    [deleted]
  - netcan 16y ago
    You're assuming Apple is stationary here. At the moment, app availability is still much better for iOS. If that changes, they can soften their policies.
  - theBobMcCormick 16y ago
    This seems like a particularly insane time for Apple to risk losing subscription apps like Netflix, Evernote, Kindle, etc. What with Android sells now far out-pacing iPhone sales and WP7 making a fair attempt at getting lets under itself. IMHO, they could have pulled this off a year or 2 ago because developers had nowhere else credible to turn. Now, they do.
    - sahaj 16y ago
      I think Apple is counting on platform fragmentation to win here. Apple may be thinking that with WebOS, WP7, and Android, these big companies will probably get their biggest profits from Apple if Apple continues to be the biggest shareholder within the mobile platforms.
      - theBobMcCormick 16y ago
        Unless I'm drastically misunderstanding the numbers, Apple already isn't the biggest shareholder in mobile platforms (http://techcrunch.com/2011/02/09/gartner-android-os-sales-trumps-ios-and-rim-grew-888-percent-in-2010/ http://techcrunch.com/2011/02/09/gartner-android-os-sales-tr...) That's why I think this strategy is suicide for Apple. They can reach more users on Android without having to pay a 30% toll.
tomkarlo 16y ago
That depends on your marginal cost of supporting an incremental user. For most Internet services, that marginal cost approaches zero. 30% sounds like a lot of commission versus real world purchases but when gross margin is close to 100% on an incremental subscriber, it's not nearly as egregious an ask. To make what I'm saying more concrete: For a physical object, it's not uncommon for the cost of the item to be 90% of its price. So the seller makes 10%, and a "reasonable" 3% commission on sales price = 30% of the profit. Whereas for a totally virtual service there's a large fixed cost to set it up (programming, servers, etc) but relatively little "per user" cost. Cost per unit approaches zero, marginal profit approaches 100% of price, and 30% of price is approximately 30% of the marginal profit from selling an extra unit.
- lukifer 16y ago
  > ... relatively little "per user" cost. This makes a lot of assumptions about the business model of developers. For a BaseCamp-like product, it is mostly true, support costs notwithstanding. But a video- or music-streaming service that pays out to content providers on a per-item basis has much more in common with a brick-and-mortar retailer when it comes to profit margins.
  - tomkarlo 16y ago
    I'm not saying it's great for every online business, just that it's also not right to see 30% and assume that's a wildly inappropriate rate. It's also not entirely impossible that Apple realizes that the music/book/video streaming services are one of the few virtual products with material per-user costs, and adding this kind of surcharge will drive more users to their iTunes services.
rbritton 16y ago
I haven't been able to find it -- does that requirement require that the price be the same for both methods? That is, can you charge in-app users $10 and non-app users $7 so the net is the same?
- armandososa 16y ago
  Yes, it's a requirement.
- msbarnett 16y ago
  That's covered by guideline 11.13, which reads: "Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions."
  - tomjen3 16y ago
    Many only shops will show a price that you pay, plus whatever it costs to get a credit card transaction. You could do the same here, since it doesn't say "at the same price or less including all fees". But then again Apple would properly just alter the rules.