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Will Apple’s New Subscription Model Succeed or Fail?

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With the announcement of Apple’s new subscriptions model, there have been mixed emotions popping up left, right and center around the web.

Publishers are crying fowl Apple is taking a 30% cut of subscriptions, and some have even brought up anti-trust issues against this new policy (?!). What exactly is Apple introducing here with their new subscription model?

The following graphic summarizes the ‘meat’ of the new policy:

Will you Allow or Disallow your information being shared?

Consumers will also have choice when it comes to privacy. They have a say in the matter whether or not publishers will have full access to our information. This is good for us, as we can prevent getting spammed to death. Publishers argue this information is critical for market research, and are unhappy about it.

As a consumer, I want the best price and value. Competition is my best friend. How Apple wants to deal with publishers–hey, that’s out of my control. Jean-Louis Gassée, a former Apple executive from the 80s sums it up (via @gruber):

So will this new subscription model succeed or fail? We don’t know–the market will decide. Consumers will speak with their wallets. If this doesn’t work out, Apple surely can change their policy. In the meantime, companies that don’t agree can also try other smartphone platforms (Android, RIM, webOS, Nokia-soft), right?

Will big publishers have the guts to pull their apps from the Apple ecosystem, of over 120 million iOS devices and over 100 million iTunes accounts with credit cards? Is Apple going to revolutionize digital subscriptions, like how they transformed the music industry?

[WSJ]

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  • Anonymous

    It’s bad enough that Apple already tells us which apps we can and can’t have on devices that WE OWN! Now they are trying to say that they get a cut of every subscription sold on my phone?!? I dont get how apple can claim so much control over software on a device that I bought and paid for in full….

  • Websnap

    Dude, unless you are a publisher (which isn’t the stance you are taking in your argument) how does this hurt you? You will be guaranteed that any subscription found from an app you downloaded will be managed from one account instead of many. It will be price protected, so it won’t be cheeper out of app AND they are protecting your information from being shared without connect. How are those not wins for you as a customer? And as far as “telling you what to do with your own devices”, jail break it. I’m sure you have already. Add what you want but if the app you have breaks your phone/device or leaks you information you’ll understand why it probably wasn’t included in your app store. The android store is a mess of pirated and “re-branded” application rushed out the door with no guarantees and what they consider “openness” has just given way to convolution and concussion on poorly written apps.

  • huddyrocks

    Can’t see this sitting well with publishers. As opposed to the music industry, people are not downloading magazines/newspapers in question from pirate sites like they were when apple brought in itunes store. Essentially apple are asking them to 70% of what they are making now with no real advantage to them. Time will tell I guess. I expect prices to rise to compensate for Apples greed.

  • A quick little reply to xxjdxx comment about apple selecting which apps we are allowed to have.
    Safety comes at a cost, only the cleanest most safe apps get approved. i personally like it as i know there is lot of people who try to steal info and money all the time. not everyone will like it but at least you know your protected. last thing we need is apples stuff to turn in to Windows chalked full of spyware, malware, and or viruses.

    on another note. 30%? wow thats harsh. i though even 20 was kinda pushing it. 15% would be ideal in my mind considering apple isnt doing much to push these along.

  • Apple wants publishers to ‘pay to play’. It’ll be interesting to see which
    publishers jump ship, and which ones are bluffing.

  • Anonymous

    Actually, as a consumer, this can affect me in a few ways. If Apple forces Amazon’s hand, they could do a few things. One would be to pull the app, which would not be good for me as then I would lose 1 option for getting books at a good cost. Another would be to only allow in-app purchasing but charge more because they would be losing 30% to Apple. Again, not a good scenario for the consumer. This could affect other ereaders as well such as Kobo and eReader, both which I use. When Apple pulls these kinds of shenanigans, they just make it tough on app developers which ends up costing us consumers in the end.

  • Duffsurly

    This is the very thing that may cause many people to leave idevices for android based devices. !!!

  • xxxJDxxx

    I agree about security, but its other policies in the app approval process that bother me. Things like googles voice app or other alternative apps that apple wont allow that just end up limiting my choice…

  • xxxJDxxx

    As well as what bringer666 mentioned for me its the principle. Why does apple have exclusive rights to everything I do with my hardware once I’ve paid for it. it seems to me like apple is abusing its control over apps to try to screw content providers out of a cut of their money. No one benefits from this but apple. A company already making record profits.
    It would be like samsung demanding a cut of every movie or show that I watch on my tv or a cut of what I pay my cable company…

  • Correct me if I’m wrong but you think Apple is asking for a 70% cut of publisher’s revenues? If so, that’s incorrect. They’re asking for 30%. This is standard fare as Amazon even requires publishers sell content on the Kindle Reader to fork over 30% of revenue to Amazon & require publishers not to offer cheaper deals to competitors such as Apple.

  • Not really. it would be like the cable company (the ones not creating content but serving) getting a cut of the distribution… which it does. And Apple doesn’t have exclusive rights to your hardware but they DO have exclusive rights to their services as ongoing, evolving product.

  • websnap

    the clause was that in app subscriptions couldn’t be more than subscribing out of app, but you are right, it could force players out of the game. I just don’t think it will happen

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