Gruber’s Take on Apple’s In-App Subscription Policies

Apple introduced new in-app subscription policies that have caused quite a stir in the publishing world. We questioned whether the new model will succeed or fail, but at the end of the day consumers will decide. New competition is coming from Google’s One Pass that will undercut Apple’s 70/30 revenue split.

John Gruber from Daring Fireball breaks down the following arguments against Apple’s new policies:

Apple should be taking less, perhaps far less, than 30 percent.

Apple should not require subscription-based apps to use the in-app subscription APIs. If it’s a good deal for publishers, they’ll choose to use the system on their own.

Apple should not require price-matching from subscription offers outside the app. Publishers should be allowed to charge iOS users more money to cover Apple’s cut.

Apple should consider business models that simply can’t afford a 70/30 revenue split.

Gruber makes some interesting points, and compares the App Store to a shopping mall:

…Apple sees the entire App Store, along with all native iOS apps, as an upscale, premium software store: owned, controlled, and managed like a physical shopping mall. Brick and mortar retailers don’t settle for a single-digit cut of retail prices; neither does the App Store.

It’s classic Gruber, and an interesting read nonetheless. Check it out here.

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • Joker Eh

    Then why don’t publishers build their own App Store. If the App Store wasn’t there they woudn’t have that revenue stream, so its 70% more than they had before, they have to stop crying.

  • I think the issue is that Apple is requiring publishers to provide the same content at the same price whether you use the in-app subscriptions or sign up on the publisher’s site. Obviously for the end user it’s easier to sign up inside the app. Makes payment really easy – just one or two buttons versus a website where you have to enter your payment information. You want the best customer experience, but is that worth the 30%? Think of a company like Netflix who only charges $8 / month in Canada. Now some of their customers are going to be able to sign-up inside the app which makes a big dent in their revenue. It’s not 70% more. Those customers would have likely signed up on the site before. So, Netflix ends up out of pocket. It’s a pretty big deal for some of these publishers.

    It would be a different story if the publishers could charge a different price point to the consumer for the convenience.