Rhapsody Could End Up Suing Apple Over In-App Purchase Policies

the8thark · Feb 16, 2011

Rhapsody Could End Up Suing Apple Over In-App Purchase Policies
Rhapsody Could End Up Suing Apple Over In-App Purchase Policies :: AppAdvice

Rhapsody might leave App store for the new heavy tax by apple
Rhapsody might leave App store for the new heavy tax by apple | iPhone, iPad, iPod Touch and Blackberry blog

bobtomay · Feb 16, 2011

At this point, I hope they all sue or leave or both.

iWhat · Feb 16, 2011

Publishers could possibly get over this. For distributors, however; I feel for them. They have it the roughest and have many more costs and hurdles in providing a service.

I bought a lot of popcorn to last us until June, you guys.

bobtomay · Feb 16, 2011

I'll bring the butter.

ThePope43 · Feb 16, 2011

I think Apple needs to meet in the middle. I mean I completely understand them charging because they're using Apples products to distribute theirs.

bobtomay · Feb 16, 2011

ThePope43 said:
I think Apple needs to meet in the middle. I mean I completely understand them charging because they're using Apples products to distribute theirs.

So, you think it would be OK for Microsoft and Dell to start charging Amazon a cut because you used a Dell computer with a MS operating system in order to purchase their products?

Oh, and don't forget Mozilla's cut if you're using Firefox to view Amazon and place your order.

And oh yeah, you couldn't have gotten there without your ISP - they need their share of that sell also.

Chris H. · Feb 16, 2011

bobtomay said:
So, you think it would be OK for Microsoft and Dell to start charging Amazon a cut because you used a Dell computer with a MS operating system in order to purchase their products?

Oh, and don't forget Mozilla's cut if you're using Firefox to view Amazon and place your order.

And oh yeah, you couldn't have gotten there without your ISP - they need their share of that sell also.

I'm not sure if I should stay with iOS or go with HP and WebOS. And if other tablet companies start this, then I don't know what I'll do. :/

bobtomay · Feb 16, 2011

And the auto manufacturer, or the busline, or the manufacturer of the bicycle that got you to the store - they should get their cut too.

the8thark · Feb 16, 2011

bobtomay said:
So, you think it would be OK for Microsoft and Dell to start charging Amazon a cut because you used a Dell computer with a MS operating system in order to purchase their products?

Oh, and don't forget Mozilla's cut if you're using Firefox to view Amazon and place your order.

And oh yeah, you couldn't have gotten there without your ISP - they need their share of that sell also.

If the products were 100% free of advertising sure. How I see it is I am paying either way. With my cash. Or with my time wasted on those adds shoved into my face.

Also we are talking about apps on mobile devices and not web apps. And yes MS is charging Nokia hefty royalty fees to use W7-Mobile on their Nokia phones. And I'm 100% sure these royalties will be passed on to the developers who in turn will pass them on to the end user. Google could do the same with the Android phones. But 30% or whatever % of $0 is still $0. Android works with a million ads shoved in your face. And in this world time wasted looking as those ads does indeed equal money.

So in short my opinion is this.
1. Charging a fee for web apps is silly. And should not happen.

2. Charging a fee for the in app subscriptions I agree with with. For example a newsagent. If you subscribe to a magazine, it's most of the time cheaper to have it shipped to your door then have it shipped to the newsagent where you have to pick it up. Simply cause the newsagents charge you for the safety. Ie. At the newsagent it can't be: lost in the post, stolen from the mailbox, rained on etc etc. Well they can happen for the newsagent, but then it's the newsagent's issue and not yours and you can demand a copy of your subscribed magazine.

Also without the newsagent (or iOS) to browse through you might not have subscribed to that magazine or app. So more potential sales just for being in the bigger shops/iOS.

Do I agree with 30% for subscriptions or in app purchased content? Probably not. But I would not have it at 0 either. Then every app would have in app purchases only. I think a 15%-20% fee is fair. Cause in iOS you have access to Apple's one click pay system, 100 million+ credit card database (as in that many potential customers) and Apple tech support.

Do I think Apple is getting a little arrogant on this point. Yes. Apple is big on the one size or design fits all mantra. And in this case 30% does not fit all. I would like to even Apple randomly give some Apps a 5% sale. As in only take 25% from them for a certain time. Cause it's well known in the retail world you can take a little less profit from some items if they can bring customers who will browse and purchase your higher profit items.

So yeah that's how I feel about this whole mess.

And to directly comment of my quote of your post.
Why should the government (cause I use the train) or petrol station for your car or whatever get a % of the sale. That's just silly. You already pay to use that service. They don't care if you hang yourself with their service. Whatever you do with it is not their concern. As long as you pay in full for the service they are happy. And the same for your ISP. As long as you pay your ISP fees you access the net, you can look up pørn, a online cooking recipe, purchase an app fro the app store or a million other things. They don't care as long as they are paid.

Those people are not providing you with the service. Apple is. It's not Apple's fault you need the internet to use the app store. The same way it's not your bosses fault you need some form of transport to get to your work. You know this from the beginning. And if you want to use the services (ie the app store in this case) you need to have everything required for it (in this case being the internet).

So all the groups of people you mentioned don't deserve a % of the final app sale.
But if they did get it, you'd be paying more for your apps, cause it's well known most little fees are passed down to the end consumer. And you'd be paying 2x for the same service. Why should I pay a fee (within the app price) to the ISP to purchase an app when I already pay to use the internet. That seems pretty crazy to me.

bobtomay · Feb 16, 2011

Sorry, but I don't know what ads you're talking about. I have no "in app" ads on any of the apps I am using on any of my devices.

We're not talking about Apple charging someone for the operating system on their device as in the MS charging Nokia for their OS.

We're talking about a change so that now MS/Nokia would get a 30% cut off everything you buy from that piece of hardware.

the8thark · Feb 16, 2011

I see your point. But the 2 are interlinked. Cause Apple does not charge itself to use iOS. But MS charges Nokia to use W7-Mobile. And those prices will be passed down. Those passed down costs could be as high as 30%. We won't know till more Nokia/MS data comes out.

ThePope43 · Feb 16, 2011

the8thark said:
If the products were 100% free of advertising sure. How I see it is I am paying either way. With my cash. Or with my time wasted on those adds shoved into my face.

Also we are talking about apps on mobile devices and not web apps. And yes MS is charging Nokia hefty royalty fees to use W7-Mobile on their Nokia phones. And I'm 100% sure these royalties will be passed on to the developers who in turn will pass them on to the end user. Google could do the same with the Android phones. But 30% or whatever % of $0 is still $0. Android works with a million ads shoved in your face. And in this world time wasted looking as those ads does indeed equal money.

So in short my opinion is this.
1. Charging a fee for web apps is silly. And should not happen.

2. Charging a fee for the in app subscriptions I agree with with. For example a newsagent. If you subscribe to a magazine, it's most of the time cheaper to have it shipped to your door then have it shipped to the newsagent where you have to pick it up. Simply cause the newsagents charge you for the safety. Ie. At the newsagent it can't be: lost in the post, stolen from the mailbox, rained on etc etc. Well they can happen for the newsagent, but then it's the newsagent's issue and not yours and you can demand a copy of your subscribed magazine.

Also without the newsagent (or iOS) to browse through you might not have subscribed to that magazine or app. So more potential sales just for being in the bigger shops/iOS.

Do I agree with 30% for subscriptions or in app purchased content? Probably not. But I would not have it at 0 either. Then every app would have in app purchases only. I think a 15%-20% fee is fair. Cause in iOS you have access to Apple's one click pay system, 100 million+ credit card database (as in that many potential customers) and Apple tech support.

Do I think Apple is getting a little arrogant on this point. Yes. Apple is big on the one size or design fits all mantra. And in this case 30% does not fit all. I would like to even Apple randomly give some Apps a 5% sale. As in only take 25% from them for a certain time. Cause it's well known in the retail world you can take a little less profit from some items if they can bring customers who will browse and purchase your higher profit items.

So yeah that's how I feel about this whole mess.

And to directly comment of my quote of your post.
Why should the government (cause I use the train) or petrol station for your car or whatever get a % of the sale. That's just silly. You already pay to use that service. They don't care if you hang yourself with their service. Whatever you do with it is not their concern. As long as you pay in full for the service they are happy. And the same for your ISP. As long as you pay your ISP fees you access the net, you can look up pørn, a online cooking recipe, purchase an app fro the app store or a million other things. They don't care as long as they are paid.

Those people are not providing you with the service. Apple is. It's not Apple's fault you need the internet to use the app store. The same way it's not your bosses fault you need some form of transport to get to your work. You know this from the beginning. And if you want to use the services (ie the app store in this case) you need to have everything required for it (in this case being the internet).

So all the groups of people you mentioned don't deserve a % of the final app sale.
But if they did get it, you'd be paying more for your apps, cause it's well known most little fees are passed down to the end consumer. And you'd be paying 2x for the same service. Why should I pay a fee (within the app price) to the ISP to purchase an app when I already pay to use the internet. That seems pretty crazy to me.

I am being honest when I say I agree with this 100%

bobtomay · Feb 16, 2011

the8thark said:
I see your point. But the 2 are interlinked. Cause Apple does not charge itself to use iOS. But MS charges Nokia to use W7-Mobile. And those prices will be passed down. Those passed down costs could be as high as 30%. We won't know till more Nokia/MS data comes out.

And what's that got to do with Apple or Nokia/MS charging Hulu, Netflix, Amazon, Rhapsody, Barnes & Noble, etc. 30% for any sales made from the device.

Companies that not only develop their own apps, but also provide their own billing, server storage and bandwidth to deliver their products, how does that entitle Apple or Nokia/MS to 30% of their sales?

If it does, then I still submit, that MS/Dell, MS/HP, MS/Asus, MS/Toshiba, etc., etc.; have the right to charge a percentage for everything you buy from that computer.

the8thark · Feb 16, 2011

bobtomay said:
And what's that got to do with Apple or Nokia/MS charging Hulu, Netflix, Amazon, Rhapsody, Barnes & Noble, etc. 30% for any sales made from the device.

I think I already explained that. But I do see your point. And to me the answer is the privilege of being on iOS. If the others don't like paying the 30% then they can get their own portable hardware devices, market them and sell their app on those. Or find another hardware device/OS that will take their apps for less then 30%.

Apple is clear on the 30% rule. It's up to the developers if they stay or go.

james515 · Feb 16, 2011

wow... 30% of sales..... thats steep, i could understand 5% or 10%, but 30% man thats highway robbery.

robduckyworth · Feb 16, 2011

hopefully they all leave the app store. that would give apple a big enough slap that maybe theyd consider taking away this policy.

XJ-linux · Feb 16, 2011

As quoted in the article...

Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.

That about sums it up. There will be some content providers who will find it prohibitive to provide content to consumers via Apple devices such as the iPad, iPhone and iPod Touch. Ultimately, when some previously available content disappears, consumers will vote with their dollars and feet as to whether they appreciate this new model or not. I'm not sure that I know of many business models that can operate with an instant 30% cut in current fiscal year forecasted revenue. I'd imagine some of these companies will find another platform to support - that seems inevitable in some cases. Alternatively, they could throw their weight behind the unofficial market and offer services to only jailbroken iOS devices. Apple will likely get upset (and sue?) if/when jailbreaking their device to get familiar content becomes the new norm - lots of dev dollars wasted there. As much as everyone loves Apple's current good run, few consumers root for the bully or the greedy these days. Fewer still are in a position to pay extra for something they can legally buy for less somewhere else just because Apple decided it needed more control, status or money. Apple isn't the underdog anymore and it doesn't necessarily garner the de-facto high ground with the old "Apple -vs- the Big Guys" sentiment it once enjoyed. "Pride commeth before the downfall..."

Oh, and my Android device doesn't have a million ads shoved in my face either. Not sure where that myth comes from. Maybe it's broken?

SundayForever · Feb 17, 2011

Publishers could possibly get over this. For distributors, however; I feel for them. They have it the roughest and have many more costs and hurdles in providing a service.

bobtomay · Feb 17, 2011

the8thark said:
I think I already explained that. But I do see your point. And to me the answer is the privilege of being on iOS. If the others don't like paying the 30% then they can get their own portable hardware devices, market them and sell their app on those. Or find another hardware device/OS that will take their apps for less then 30%.

Apple is clear on the 30% rule. It's up to the developers if they stay or go.

Sorry, but I don't see any rational explanation for why Apple should get a percentage of anything and everything that is sold from it's hardware.

And I'll stand by this:

bobtomay said:
If it does, then I still submit, that MS/Dell, MS/HP, MS/Asus, MS/Toshiba, etc., etc.; have the right to charge a percentage for everything you buy from that computer.

I will say, if this is Apple's intent with the Mac App store also, to force every single developer of every app and content provider that runs on OS X to pay them a cut, then I'll likely be running, not walking, back to Microsoft and Linux.

Edit: I take no issue with Apple having all apps approved by them, putting them all in a single location, providing all the billing, server storage space, the bandwidth to deliver those apps and their subsequent take of a cut. And on a new device that we were all aware of the policy up front.

This new rule by Apple has nothing to do with selling apps. This is in relation to the content providers. Content which Apple has allowed on our devices for some time now. And content which has helped to push the sales of the hardware to a great extent. Now, they want to charge the content providers that have helped to make the device the great seller that it is a 30% cut?

I subscribe to and/or purchase content from among the following:
Audible
Amazon
B&N
Hulu Plus
Netflix

I pay all of the above for their content, for which they have made their content available on multiple devices. Each of these have had their own storefront, billing, storage and have been providing and paying for their own bandwidth for delivery of their content for years.

Audible content, for example, has been available both on our computers and iDevices for many a year. So tell me, why all of a sudden should Apple get a cut of Audible's sales?

None of these companies have a pricing point set that allows them to give away a 30% cut, while still maintaining all their own infrastructure. Apple is not offering to take over the distribution of any of their content. For them to give away 30% means their pricing must increase. And it must increase, not only to those that use Apple devices, but across the board to every single customer they have.

Apple by this stroke is attempting to worm their way into not only making their own profits, but by taking a cut from anyone that offers digital content. And those that will be giving Apple money is anyone and everyone that uses content that is available anywhere if that content is also made available to Apple devices. Only it will be everyone that pays for it, not just those that use Apple devices.

This is the height of greediness, imho. And depending on how this all shakes out, could lead myself to become one of those irrational Apple haters.

I will be writing to all the content providers I use, just to let them know if they pull their content, I'll gladly stand behind their choice in this matter.

XJ-linux · Feb 17, 2011

Well said as usual Bob.