Subscription services

[DaveSt]

Go ahead and start a site that hosts applications. You set the ground rule that if you want me to host your app you will pay be only 30% and you will get full distribution to millions of users. If you want you can even release the app for free and make money thru ads (that users will share with you)....some users however decide they want to use your distribution method but circumvent your charges by allowing you to go to a website and pay for additional services, or in the case of pandora pay entirely.....now, millions of people download pandora and say hundreds of thousands of people pay for the service. You only see money from ad revenue.....and not a penny from the paying users. Thats not cool since you are still hosting this app that is downloaded millions of times a day.

Get the idea if that happens over and over and over...eventually you are hosting a ton of "free" apps that people are paying for outside your jurisdiction. Not very fair and blatantly sidelining your terms of service agreement.

That is true and certainly a cause for concern for Apple (as a consumer it is great however). You did however neglect to mention that every single person that has downloaded that "free" application has already given hundreds of dollars to Apple to give them that privilege. Having applications like Pandora and Kindle and Netflix, etc. pushes forward the sales of the hardware devices because people can see that the content they want to be using is available for their device. Apple may not be getting the secondary benefit of those service's subscription revenue, but they have already seen a sizable benefit from having those apps available in the app store.

I have a feeling Apple has lets these things slide until now for just that reason. I doubt that someone at Apple just suddenly realized that these apps were in violation of the guidelines. There are a lot of people, including me, that would never have jumped on the iOS bandwagon if those apps were not available. Perhaps Apple feels they have a big enough customer base that those premium content providers are no longer needed.

 

[gentlefury]

Go ahead and start a site that hosts applications. You set the ground rule that if you want me to host your app you will pay be only 30% and you will get full distribution to millions of users. If you want you can even release the app for free and make money thru ads (that users will share with you)....some users however decide they want to use your distribution method but circumvent your charges by allowing you to go to a website and pay for additional services, or in the case of pandora pay entirely.....now, millions of people download pandora and say hundreds of thousands of people pay for the service. You only see money from ad revenue.....and not a penny from the paying users. Thats not cool since you are still hosting this app that is downloaded millions of times a day.

Get the idea if that happens over and over and over...eventually you are hosting a ton of "free" apps that people are paying for outside your jurisdiction. Not very fair and blatantly sidelining your terms of service agreement.

That is true and certainly a cause for concern for Apple (as a consumer it is great however). You did however neglect to mention that every single person that has downloaded that "free" application has already given hundreds of dollars to Apple to give them that privilege. Having applications like Pandora and Kindle and Netflix, etc. pushes forward the sales of the hardware devices because people can see that the content they want to be using is available for their device. Apple may not be getting the secondary benefit of those service's subscription revenue, but they have already seen a sizable benefit from having those apps available in the app store.

I have a feeling Apple has lets these things slide until now for just that reason. I doubt that someone at Apple just suddenly realized that these apps were in violation of the guidelines. There are a lot of people, including me, that would never have jumped on the iOS bandwagon if those apps were not available. Perhaps Apple feels they have a big enough customer base that those premium content providers are no longer needed.

I don't really agree with that since these services are available across all other platforms. I don't think anyone bought an iPad for Pandora...but people use Pandora on their iPad...I think it benefits Pandora more so than apple.

 

[Seadog]

I wish I could say that I am surprised about how little people understand business, but then I know several that hate WalMart for being the success it is. Every app has to undergo a review, which cost Apple money for the personnel and facilities. Add accounting, billion dollar server farms, support personnel, etc. The cost of business is a highly complex process. It is not as simple as 2 + 2.

 

[DaveSt]

I don't really agree with that since these services are available across all other platforms. I don't think anyone bought an iPad for Pandora...but people use Pandora on their iPad...I think it benefits Pandora more so than apple.

Pandora is only one example though. I purchased two iOS devices specifically because Kindle was available for them. Having Pandora was also a big deal for me. Sure, Pandora is available on other platforms but I can't put most of them in my shirt pocket when I am at work. I have two people in my family that I (perhaps unfortunately it seems) convinced to go with iPads over Kindles because of all the extra features. If that Kindle app was not available the iPad would not have even been on their radar. Those two iPads netted Apple just shy of $700 (edit: maybe a little high, make that $400 - $600) in profit. It takes a bunch of 30% portions of ebook sales to equal that amount and Apple can thank Amazon for those sales entirely. Maybe Apple should be paying Amazon a portion of each iPad sold ...?

It is common sense. If there were no apps that people wanted, iOS would not be anywhere even close to where it is now. Sure, Pandora is reaping the benefits of having an app but Apple is also reaping the benefits by having that app available. If you look at how many people have these apps installed, I would say Apple is doing just fine by having them around.

 

[DaveSt]

I wish I could say that I am surprised about how little people understand business, but then I know several that hate WalMart for being the success it is. Every app has to undergo a review, which cost Apple money for the personnel and facilities. Add accounting, billion dollar server farms, support personnel, etc. The cost of business is a highly complex process. It is not as simple as 2 + 2.

I understand the business just fine. If you have the apps that people want they will be much more willing the buy your devices. The app review and hosting costs are more than recouped when people are paying for your more than healthy profit margins for the hardware. It is a symbiotic relationship. You can't play the app review costs angle too hard when Apple has that as a self imposed cost. If Apple was losing their shirts on these costs they wouldn't continue to shoulder them.

 

[Seadog]

FYI, the profit from the iPads is gross profits if you look at the cost of the components which is the only number I have ever seen bantered around. R&D is 5% of Apple's profits. Add numerous other things like component assembly, warranties, support, sales, accounting, shipping, etc., etc.

 

[DaveSt]

FYI, the profit from the iPads is gross profits if you look at the cost of the components which is the only number I have ever seen bantered around. R&D is 5% of Apple's profits. Add numerous other things like component assembly, warranties, support, sales, accounting, shipping, etc., etc.

I realize that. The number breakdowns I am looking at take most of those into account, but not R&D and after sales support. Apple's assembly cost is something like $10 per unit so you can almost write that off. You only need to do the math on Apple's reported quarterly profits to realize they are making a ton per unit sold for all devices. I don't begrudge Apple that one bit. If you make a product people want and they are willing to pay your price then you are doing business the right way. Going back and penalizing those others that helped you get there? I guess we'll have to see if that is doing business the right way or not.

 

[BrennB]

I like the iBooks app itself better than the Kindle app actually. The reason I don't use iBooks has nothing to do with availability really, it is more that I don't want to restrict my reader options that tightly. I have been reading my books electronically for years now, ever since my Palm III days. I have been through Microsoft Reader, Rocket, mobi books, Peanut Press and probably a few others all that had proprietary formats and proprietary DRM at one time or another. All is fine as long as you continue to use the device you purchased the books for. When you upgrade, all of the sudden your books are not readable on the new device, or they at least need to have the DRM stripped or the books reformatted.

With Kindle books there is much more device independence. I can read my books on any number of platforms without needing to reformat them. With iBooks that really isn't the case. Who knows what device I will be using in five years? Will there be an Android version of iBooks? How about a PC version? Windows Phone? I doubt it. Apple wants you to be tied to one platform. I've been down that road before, I don't plan on doing it again.

This, and the fact that I can read those books on several devices at once. That cross device syncing is the best feature for Kindle for me. I remember the days of trying to get my device "switched" so I can finish a book when I upgraded my phone or Palm. I had so many books purchased that were waiting to be read... in fact, I had to install Stanza so I could finish reading (on the ipad) the books I'd bought at Fictionwise for my blackberry.

 

[gentlefury]

I don't really agree with that since these services are available across all other platforms. I don't think anyone bought an iPad for Pandora...but people use Pandora on their iPad...I think it benefits Pandora more so than apple.

Pandora is only one example though. I purchased two iOS devices specifically because Kindle was available for them. Having Pandora was also a big deal for me. Sure, Pandora is available on other platforms but I can't put most of them in my shirt pocket when I am at work. I have two people in my family that I (perhaps unfortunately it seems) convinced to go with iPads over Kindles because of all the extra features. If that Kindle app was not available the iPad would not have even been on their radar. Those two iPads netted Apple just shy of $700 (edit: maybe a little high, make that $400 - $600) in profit. It takes a bunch of 30% portions of ebook sales to equal that amount and Apple can thank Amazon for those sales entirely. Maybe Apple should be paying Amazon a portion of each iPad sold ...?

It is common sense. If there were no apps that people wanted, iOS would not be anywhere even close to where it is now. Sure, Pandora is reaping the benefits of having an app but Apple is also reaping the benefits by having that app available. If you look at how many people have these apps installed, I would say Apple is doing just fine by having them around.

Kindle app is also available on all formats, iOS, Android, Windows, Mac, I think even Linux. Again, not a reason to get an iPad.

 

[Thphilli]

Kindle app is also available on all formats, iOS, Android, Windows, Mac, I think even Linux. Again, not a reason to get an iPad.

Bottom line is Apple is making more money now then it has ever made before in the history of the company. Every new quarter is its BEST QUARTER EVER:
Apple?s Best Quarter Ever: $26.7B Revenue, $6B Profit; 4M Macs, 7M iPads, 16M iPhones | Cult of Mac

So now that they continue to make these record profits, they are going to try milking the content providers for more. You may be willing to accept EVERYTHING that Apple does, as your posts seem to indicate, but you cannot argue that Apple is in a position where they have to do this subscription nonsense.

 

[DaveSt]

Kindle app is also available on all formats, iOS, Android, Windows, Mac, I think even Linux. Again, not a reason to get an iPad.

I guess for you that must be the case. For me it was a, if not the, deciding factor. I don't really get your point. Having it on many platforms means that I also want it on the iPad. I was already used to having Kindle support on iOS (iPod Touch) which I think is the point here. Having it on many other platforms means that I won't get an iPad without it. So yes, it is a reason to get the iPad over something else. How was my reasoning supposed to work: let's see, Kindle support is available on all these devices, better not get an iPad? I don't see how not being exclusive to one device is a reason not to buy something. I was shopping for a portable device larger than my iPod Touch that I could also use as an e-reader. I saw that I could read Kindle books on the iPad so that helped me decide to go with the device. Sure, I could also carry around my Linux desktop or a laptop computer but neither fit my criteria. I didn't want a dedicated e-reader and there were no other choices at the time. Please explain to me how Kindle support was not a reason to get an iPad, I honestly don't get your point.

If Kindle support isn't a reason to buy the iPad, then lack of Kindle support is a reason to not buy it. How about that?

 

[Phil459]

Well with Borders having just declaring bankruptcy and B&N having been up for sale since last August, its pretty much going to be left up to Amazon and Apple as the major content providers. Now if they could only put Amazon's content with Apple's reading app, then we would have a real winner.

<====== NOT holding my breath!

Somebody else with sense LOL.
Perfect idea. Remove Amazon's DRM and format the books for iBooks. Download and import into iTunes automatically just like the Amazon mp3 downloaded does for music. (Then there would be no need for a "Kindle App" just as there is no Amazon "Mp3 Player".) Then my wife and I could continue using our iPads and our boys could use their Kindles.

 

[33hamil]

Has anyone thought about MLB.TV??

 

[DaveSt]

A little bit more information here. Most of this article is unsubstantiated, but I find the 3,000 item listing limit to be of interest here. Eve if Amazon agrees to sell books in-app (not going to happen) they still can't list more than a tiny fraction of their available items.

Amazon, B&N, Kobo know their iOS apps will be pulled in June | The Digital Reader

 

[Bob Coxner]

It may not be as bad as I feared, assuming the Steve Jobs' email is legit.

Steve Jobs Says Apple Subscriptions Are Only for Publishers | News & Opinion | PCMag.com

""We created subscriptions for publishing apps, not SaaS [Software as a Service] apps," Jobs said an email sent in response to a developer, obtained by MacRumors."

Netflix and Pandora are SaaS providers. At least by most peoples' definitions.