“When rumors of Apple’s typical 30/70 split (Apple/publisher) for an eBook store became too realistic to ignore, Amazon moved quickly to match the terms (though they didn’t quite do so, putting a few conditions in place),” Tom Reestman writes for The Small Wave.
Reestman writes, “Until then Amazon had been taking up to 70% and no one questioned it or cared… It’s hard to believe those claiming outrage aren’t primarily motivated by the fact that this is Apple, and any Apple headline is ‘news.’ Let’s face it, ‘Amazon’s 70% Cut is Evil and Publishers Will Perish’ is an article few would have read.”
Read more in the full article – recommended – here.
MacDailyNews Take: Not only that, but content publishers who use Apple’s subscription service in their app can also employ other methods for acquiring subscribers outside of the app. Publishers can still sell digital subscriptions on their web sites or they can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Related articles:
U.S. DOJ, FTC antitrust enforcers consider investigating Apple over App Store subscription rules – February 18, 2011
Why Elle, Nylon and Popular Science said yes to Apple’s App Store subscription terms – February 17, 2011
App Store subscriptions: Apple’s on the side of the consumer yet again – February 17, 2011
Apple’s subscription rules cause some to utter ‘antitrust’ – February 16, 2011
App Store subscription terms for content providers to focus on the consumer – February 15, 2011
Apple’s App Store subscription rules cause concern at media companies – February 15, 2011
Apple debuts subscription service on the App Store; Steve Jobs: ‘Brand new opportunity’ for content publishers – February 15, 2011
Apple is simply taking its place in the selling of content.
They supply the server farm (very costly) and make it very easy to get that content.
There isnt much of a story here, but that doesnt stop the classic ‘sky is falling’ stories we have to put up with from the locked-down, corporate-owned media.
There arent any really independent new sites, are there?
Estoppel. Nuff said.
This actually isn’t fair to the publishers. It would be like Microsoft charging Apple 30% for every song that Apple sells on iTunes for Windows, just because Apple’s app happens to run on Windows.
How is it not fair? I don’t get your point.
Thing is, Apple is maintaining the server farms and dealing with the transactions. Also support from their server part of the deal. If your D/L goes bust Apple has to make it right. 30% seems quite fair to me.
iQ
I believe iTunes doesn’t turn much of a profit anyways. It is a costly endeavor to provide the massive amount of infrastructure required to run the store. Some pegged the estimates as high as a billion dollars per month.
There is nothing to stop anyone from making an “iTunes like” Software that runs on OS-x that does NOT use the Apples stores. In that case Apple would charge them 0%. Why because they are not using Apples App store.
For example, lets say RIM had their own music store that they sold music from. And lets say they had an iTunes-like S/W program called iRIMMES that allowed them to purchase and stream these songs when installed on a OS-X computer or Windows computer or any other OS computer in the world. In that case Apple would NOT charge them anything. Why? Because iRIMMES would not be using the Apple store in any way whatsoever. Just like iTunes does not use Microsofts “infrastructure/ecosystem”. IRIMMES would be just a program running on OS-X….just like iTunes is a program running on Windows.
I gather from your comment, you don’t seem to have much respect to those that have or those publishers that think otherwise.
When you have made your mark as high as Murdock has, perhaps you can have The Daily publish why this isn’t fair to the publishers.
In the meantime, perhaps you should peruse the The Daily’s official launch event from February 2, 2011.* You may learn something.
*http://www.thedaily.com/launch
Apple is an Internet retailer. Retailer discounts are typically 30 to 50 percent of list. Apple has chosen to stay on the low end of this range, which might be reasonable as they do not have to maintain a brick&motar store front.
Amazon was requiring the typical distributor’s discount and selling the goods as an Internet retailer. When Apple decided to compete in the EBook marketplace as a retailer Amazon lowered its required discount to the retail level. Normally this action would be considered to be the expected result from competition.
The reaponse by retailers who wanted to access Apple’s coroner base was to distribute a free application and redirect the purchases to their web site. This action is equivalent to Best Buy setting up a kiosk inside of Walmart to display their wares and directing purchases to the Best Buy store across the street.
One really hopes there aren’t any “retailers who wanted to access Apple’s coroner base”. And, while coroners perform a very necessary service, one also hopes that Apple’s base focuses far beyond that group.
:))
Tom is correct. The whiners should just buy some Apple stock. Once they are a part-owner of a Western company, they will FINALY have some insight into the following:
1) business
2) job creation
3) where that “tax revenue” comes from (people with, you know, good-paying jobs)
4) capitalism
Or maybe they *won’t* understand. Indignation at seeing *others* making money is the root cause of ideological certitude and the stupid things it can cause people to say.
Whiners are either manorexic or have another agenda from the rest of us.
amazon still takes a 55% cut on actual books from publishers such as myself. AND I pay the shipping to Amazon which, depending on the size of the order, runs 50 cents to a dollar per book, depending on the size of the order. It is the same or worse with major book distributors.
So 30% sounds damned reasonable to me. Sure, Apple does not have the hassle of handling actual books, but neither do I. Nor do I have to invest in inventory and storage. To the rest of the publishing industry I say, “stop whining.” this is a way better model than the old one.
@Brad Dimock
Nice to have a comment from someone who knows more than most —- i.e. a real author who has dealt with and knows the pros and cons of the various systems. Thanks.
That’s not even the worst of it. In gram, the country’s largest book distributor, takes a whopping 60%. you pay the postage. Then you get “returns”, often in huge numbers. These are books that went out to stores, did not sell, and are returned for credit. They are often scuffed, dented, or bent beyond salability. Guess who’s pay the postage for the returns? Not to mention the grunt work of packing, unpacking, sorting resaleable ones from junk, swearing, drinking, etc. It adds up. So the 60% discount is just the beginning.
Compare that to 30%, no publisher cost, no storage, no investment in inventory, no shipping or handling, no returns. You do the math.
Is “Sunk Without a Sound” available from iBooks? I remember reading about the Hydes years ago.
Reading through many articles on the subject I noticed a few things:
1) Apple haters seem to be REALLy enraged about this, you know people who don’t actually use Apple products.
2) in 2010 iOS took 82.7% of the revenue from PAID Apps. Android took 4.7%. So those enraged Android users don’t actually BUY apps….
Developers who are screaming at Apple take note of this. Go android if you want but the cheapskates there don’t actually spend money.
This also shows that Apple has spent a lot of time and effort to build an eco system conducive for developer sales (i.e they’ve built a prime retail location. In real life Prime retail spots are worth more than bad ones, think Madison 5th Ave).
3) Google says that they are going to charge less than Apple BUT as WSJ points out “Google has also proposed giving publishers certain personal data about app buyers to help with marketing”. Traditionally publishers have used this data mining to help advertisers AND sell them to third parties (telemarketers, junk mailers). That’s why magazine subscriptions are so cheap because the personal data is very valuable to them. When publishers got your subscriptions and personal data traditionally you don’t have a privacy clause plus legalities is muted as it is done by DISTRIBUTION companies who handling subscriptions (how exactly Google is handling this saying they will pass personal info to publishers I’m not sure). Apple has a dialog box which you can tick to refuse your personal data being given to publishers. If people curse Apple and go Android beware who knows your personal data and the stuff you subscribe to…
(Please note I’m not supporting things be more expensive on Apple than Android: I’ve been flamed on this. But I’m just pointing out a few facts that not many have looked at.)
I’m sure that since Android is going to simply obliterate Apple this year and since Google has such a WONDERFUL plan for everyone, especially the publishers, this will all be forgotten in a matter of months.
At least that’s they keep saying.
Too many iHating pricks that bitch and moan no matter what Apple does. If it wasn’t for Apple, the e-subscription industry wouldn’t be as far as it is today. Amazon did a fine job and had their share of problems, too. However, I don’t remember anyone calling the FTC or DOJ to be looking in on them when they almost had the entire market for themselves. It’s not like anyone is forcing people to use iOS for magazine subscriptions. They can go to any number of platforms. If they want to use Google’s subscription system, that’s up to content providers and consumers.
It seems similar moaning and groaning happened when iTunes first came on the scene. It’s up to consumers to decide if the service is good enough for them. There are factions of bloggers out there that will throw up some red flag as long as Steve Jobs or Apple is mentioned. Man, those people are pains in the ass for Apple.
Amazon got away with charging more because nobody seems to give a damn about Amazon or Jeff Bezos. Amazon’s share price isn’t as high as it is because they’re giving sh!t away. They’re charging what the market can bear. I always say if you don’t like something, don’t patronize it. Shut the hell up and go elsewhere. If nobody buys, the company will have to change its policy to stay in business. If the publishers think they’re gonna get rich from Google’s service, then more power to them. Everyone thinks Google’s so damn perfect like some charitable organization and sh!t.
Boo hoo, Apple is taking 30% of my revenue. Never mind that my revenue has increased 2000 percent because I made subscriptions available on the iPad.
Apple provides one of the virtual retail spaces for publishers to display and sell their products. It does not force the publishers to use this Apple retail space, it does not forbid the publishers from setting up their own retail space, or from using other retail-space providers. All it says is, “If you want to use the Apple retail space, you pay us 30%. If you don’t accept, then we suggest you move elsewhere. Oh, and if you are going to be using the Apple retail space to display your products, we are not going to allow you to tell potential customers, ‘Psst ….. don’t buy our products here. Go to our website directly to do so. Here’s the address’. All we want you to do, in the interests of fairness – why should we not be rewarded for allowing you to get new customers? – is to allow potential customers the opportunity to buy your product here on the same terms as on your website.” I don’t see any unfairness or monopoly or anything else of that sort in this arrangement.
Apple provides publishers–books, music, developers, movies, etc.– a place to display and sell stuff.
Amazon provides publishers a place to display and sell stuff.
There is NO reason why Amazon has to provide Apple a place or vice versa.
@iNeuron
The word whiner seems to be currently in hyper over use, generally directed at someone with a different perspective.
It all depends upon whose ox is gored!
Most people don’t see themselves as whining.
Could people who call others whiners be in effect whining about them?
What are you whining about, appleation? 😉
Can I haz gored ox’s tail? I love oxtail soup…
Publishers who question Apple’s pricing may place their publications on Google. Once they see the pea sized sales from Google, along with customer privacy complaints, they will likely have a different perspective.
http://www.engadget.com/2009/05/07/amazon-takes-70-percent-of-kindle-newspaper-revenues/
I’m tired of MDN always kissing Apple’s shiny white behind. Can Apple do no wrong? I guess so, at least if you’re an MDN-level Apple fanboy.
MDN is generally pro-Apple. They serve their demographics, but they are also Mac users by choice.
However, MDN has also taken Apple to task on a number of occasions. You are either a newbie or you seldom visit this little corner of the internet, Ballmerboy.
@ Ballmerboy, the clue is in the name… MACDailyNews.
Good God! You mean to tell me that retail stores actually mark up the merchandise they sell? I thought they sold it for whatever they paid for it and provided the service as a charity. You mean Home Depot, WalMart, and Target actually make money on sales?!!! When did we start allowing that? And now Apple actually expects to make money by providing a retail outlet to publishers? The nerve!!!!
This is just something that was told to me by one Apple dude. They make money with iTunes but it requires Apple to be in business that is not in their core. They will do it, but it would be better if publishers had their own stores, meanwhile they are charging “a maintenance fee”, that will make the publishers think hard if they should have their own store. It costs money to run those you know.
Ok let me put it this way.
Apple charges 30% for publishers to post their app up on the iTunes store.
AT&T charges Apple 30% for providing bandwidth to download the app.
Joe Consumer charges AT&T 30% for making space on the expensive flash drive that came with the MacBook Air.
Joe Consumer’s wife/girlfriend charges 30% for cooking dinner while he wastes his time online downloading crappy apps like Maxim & Playboy.
Joe Consumer’s wife’s employer charges 30% for her calling in sick while she be at work because she’s looking after Joe Consumer’s ass while he’s goofing off in the Net.
Joe Consumer’s wife’s employer’s software provider charges 30% for late fees because they can’t finish the project while waiting for feedback from the wife as to software functionality.
Joe Consumer’s wife’s employer’s software developer charges Apple 30% because they can’t develop the app for the App Store that’s going to make them a boatload of money because they’re waiting on the project they’re hoping to finish on the wife’s company because it’s held up.
Apple charges itself 30% because that damn data centre in NC costs a bomb and really Apple should spend 2¢ on a data centre because you know Google only spent 1¢ on theirs and well we should give Apple a break because poor old Apple isn’t earning enough money selling shiny new stuff to us wage slaves standing in the unemployment line in the Social Security office.
That’s a purely “
” rel=”nofollow”>Boss Hogg” computation!
Don’t forget that if you want to sell your publication to Kindle users Amazon will charge you a delivery fee per MB. This was pointed out recently as the reason many Kindle publications have very few photos.
The lengths some will go to in justifying Apple’s new app store rules as they apparently apply to Amazon. First, the recently publisher imposed revenue split has increased Amazon’s take on book sales, not decreased it. Percentages are irrelevant unless you know what the base number is. 2% of $100 is more than 50% of $2.
Second, some keep talking about Apple’s “server farms”. Books purchased are not stored on any Apple servers – they come from Amazon’s.
Third, Amazon receives 30% of the books price. If Apple takes 30%, Amazon’s share drops to 0. What has Apple done to deserve all the retailers profit? I say almost nothing.
Fourth, anyone care to defend Apple’s new rules when they are applied to Netfilx. I guess most only care whose ox is being gored.
Fifth, 30% for mag and newspaper subscriptions seems fair, at least for the 1st year. I see no reason for Apple to keep 30% of renewals beyond that. I would think the industry standard is more like 5%.
Sixth, One of the biggest draw for the iPad, from a customer’s perspective is apps. One could legitimately argue that the iPads sales success has been brought about by things like the Kindle, Netflix’s apps (And others.) May they should receive revenue sharing from Apple – let’s say 30% of every one of their apps downloaded.
Look, I admire Apple’s hardware and usually as a company. However, the revised app store revenue sharing plan is nothing more than greed.
So, if the post office charges x% for handling regular book sales, you should give the post office an ADDITIONAL CUT, say 5-30% of x%?
As a gift of goodwill?
Come’on, the post office already earns x% and THEY have figured out they can live with that.
It is just amazing what kind of contorted reasoning the Apple hateboys come up with.
Re: “Third, Amazon receives 30% of the books price. If Apple takes 30%, Amazon’s share drops to 0. What has Apple done to deserve all the retailers profit? I say almost nothing.”
As Apple posted, “Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc. This is the same innovative digital subscription billing service that Apple recently launched with News Corp.’s “The Daily” app.”*
The key phrases in the press release is “content-based apps” and “digital subscription billing service.” Amazon, Netflix, Kindle, etc., apps are NOT “content-based apps.” Their content is not tied to the app as is The Daily; your purchases /payments for music, books, etc., are not paid via the Apple iTune Store, but directly to their ‘stores’/services.
Publishers have the choice to contract subscribers. Via the Apple iTunes Store for which they include all the services of any app such as automated billing/payment/accounting to valuable customer controlled profiling data. Or via their own internal customer account management services, which Apple does not partake in or charge any or part thereof.
In the past few days, a number of notable publishers have come “:on board…”† And they are not doing so to make Apple richer. Successful, but not richer.
I would suggest that many should read the press release.
* http://www.apple.com/pr/library/2011/02/15appstore.html
† http://www.ibtimes.com/articles/114160/20110218/apple-ipad-subscription-iphone-itunes-app-store.htm