
An Open Letter to Apple on the Readability App rejection - bensummers
http://blog.readability.com/2011/02/an-open-letter-to-apple/
======
Niten
> To be clear, we believe you have every right to push forward such a policy.
> In our view, it’s your hardware and your channel and you can put forth any
> policy you like.

It isn't Apple's hardware; let us not forget the hardware belongs to the
people buying the iPhones and iPads out there. Apple's enforcement of what can
and can not run on these devices is not some fundamental property right, but
an artificial construct.

~~~
brk
_It isn't Apple's hardware; let us not forget the hardware belongs to the
people buying the iPhones and iPads out there._

Sort of. It's all a matter of licensing. Technically, you might _own_ the
hardware, but you are licensing the OS running on it.

A better argument would be if you took your iOS device and wrote your own
stack for it. In that case, I don't think Apple would have much claim to what
you could/could not run on "your" hardware. But in the current scenario you're
buying iron-wrapped software (or I guess plastic-and-glass-wrapped software).
Apple is really controlling what happens with the _software_ , not the
_hardware_.

This is an importnat distinction, IMO, because I don't believe any of the "I
paid for it so it's mine" arguments out there really pass muster until you
also create your _own_ (not jailbroken) software stack.

~~~
lamnk
I don't think so. Just imagine Microsoft try to apply the same terms to
Windows ...

~~~
webwright
Not a great comparison. Windows is an OS, the App Store is a channel.

A better example would be Google. What would happen if Google tried to own
some of the dollars that flow through the organic search channel? /shudder

~~~
bergie
> Not a great comparison. Windows is an OS, the App Store is a channel.

It is a pretty good comparison as long as App Store is the only way to install
anything on iOS

~~~
marchdown
For somebody new to the whole iTunes Store ecosystem it is neither faster nor
less mentally challenging to set up a new ITS account than it is to jailbreak
their new device.

It may strike you as obviously false, and it may well have been so two years
ago, but when I got my new iPad after moving to another country I've spent
about twice as much time getting iTunes to let me pay for apps in foreign App
Store than I've spent researching jailbreak options and caveats and then
actually pwning the device.

So no, App Store is far from the only way to distribute iOS software, even
though it still is the default and sometimes the only apparent way.

~~~
pak
Jailbreaking comes with all sorts of downsides. You may have gotten lucky, but
also observe that every jailbreaking tutorial on the web has hundreds of
comments from people who didn't get everything to work right and pleading for
advice from others that will never come.

From my experience, it turns older iPhones into a stuttering laggy mess and
breaks visual voicemail, and makes you paranoid about every iTunes update.

~~~
isleyaardvark
Whether it's easy or not is irrelevant. There are other ways to do it, and
Apple is under no obligation to support those methods or make it easy for
them.

------
OpieCunningham
If I understand Readability's issue, it breaks down like this:

What they want: For a $1 subscription fee, Readability keeps $0.30 and the
publisher/writer of the articles viewed through that $1 sub get $0.70

What Apple requires: For a $1 subscription fee, Apple keeps $0.30, Readability
then has the option of keeping $0.30 (30% of $1) or $0.21 (30% of the
remainder after Apple's cut) and then the publisher/writer gets either $0.40
or $0.49, respectively.

Why does Readability feel they deserve $0.30 but Apple doesn't? If Apple
doesn't deserve $0.30, shouldn't the publisher/writer get the full $1? Without
the articles, Readability is worthless. Without Apple, Readability for iOS is
worthless.

~~~
krschultz
I think its a little different.

Readability has made a contract with the media suppliers: you get 70% of every
dollar from the customer. If Apple takes the other 30%, there is 0% left for
Readability.

If they want to make any kind of revenue for themselves in Apple's system, the
only option is to give the content creators a smaller percentage and charge a
higher price.

It's not really a matter of if Readability deserves 30%, but if Readability
deserves any money at all. Apple is basically eating their entire revenue
stream.

~~~
OpieCunningham
I understand that Apple has thrown a wrench into Readability's plans. I'm
trying to understand why I should believe that Readability's plans are "fair"
whereas Apple's plans are not.

Readability has made a contract with Apple, so I'm not clear how establishing
a contract with media suppliers matters (have they? or have they taken it upon
themselves to distribute a portion of their revenue due to eliminating the
existing revenue model the publisher uses, without the publishers explicit
consent?). Readability's contract with media suppliers is firstly contingent
on Readability's contract with Apple, if Readability intends to leverage iOS
app distribution. Readability cannot provide a contract to media suppliers
that is in opposition to Readability's contract with Apple (again, if
Readability intends to release an iOS app).

Fundamentally however, Readability's value is derived from processing
articles. Readability decided they deserve 30% of any revenue they can acquire
from offering that service to readers. Apple's value is derived from supplying
an eco-system and they have decided they deserve 30% of any revenue they can
acquire from offering that service.

Why does one of those service providers "fairly" get to receive 30% but the
other does not?

~~~
DougBTX
In my opinion, the old AppStore 30% cut for apps and in-app purchase was fair,
but the new subscription cut is unfair.

Here's my reasoning: AppStore provides distribution and one-click payment
processing. Selling access to a web app is painful because you have to ask
people to enter credit card details, or sign in to a third party payment
processor, lots of hassle. With the AppStore, it is just as easy to take
people's money as it is to give away your app for free. So, Apple is providing
a service, and it seems fair that Apple would get paid for that service.

The main issue with the AppStore cut is that Apple doesn't allow direct
competition to the AppStore on iDevices (I think that 30% would be smaller if
users were not locked in to the AppStore) however the value added is real.

With the new subscription rules, the value added by Apple is much less clear,
since Readability was already taking in money without Apple's help. So, the
assumption is that Apple's subscription tools won't provide a boost to sales
large enough to cover Apple's cut, hence unfair. With Readability's 70%-goes-
to-authors business model, they will never be able to make up the loss by
selling more content.

I've not tried out Readability, but the argument is probably that they fall
into the first category along with the AppStore, since they make it easier to
give money to creators without having to look at ads. So, they are providing
value, and a 30% cut is "fair".

------
jammur
I'm fairly quick to defend Apple, because a lot of the flack they take is BS,
but in this case I'm really struggling to find the upside.

Richard says that their 30% would account for a tiny sliver of Apple's overall
revenue, but lots of tiny slivers start to add up eventually. The problem
though, is that if the cost of those slivers is to drive the developers away
from the App Store, then those slivers disappear. Considering that third party
apps are possibly the most important feature of the platform, it doesn't seem
like a smart idea.

The 30% cut on App sales is understandable, because software generally has
high margins, but it doesn't sound like the same is true for content
subscriptions. Maybe it's a case of trying to keep their policy too uniform
(i.e 30% on everything)?

Does anyone know where the subscription content comes from? From my
understanding, the subscription content will usually come from a third party,
rather than Apple's CDN, so there's no marginal cost to Apple.

------
russnewcomer
I really don't understand Apple's moves here. They have a terrific platform,
and much of the value of their platform comes from third-party apps. If app
devs start leaving for WebOS or Android in droves, much of their traction is
going to be lost. I think if they would have gone for 10% or 15% they wouldn't
have gotten this kind of response.

I predict either reversals or abandonment of their platform. I still maintain
that HP or RIM have a great opportunity here to announce that they are going
to build app stores that are low fee for subscription apps. I think you'd
definitely see a move there from numerous devs.

And I too worry that my beloved Instapaper may be going to face trouble soon
as well.

~~~
siglesias
It's because in-app subscriptions are really just recurring in-app purchases
that can be cancelled at any time.

If you accept that the 70-30 split is acceptable for sales of apps, by logical
extension you must accept that the 70-30 split is acceptable for in-app
purchases, because technically one could provide a free app with an in-app
purchase to make it a full app, and anything less than 30% on Apple's take
would gravitate the market toward this model.

If you accept that 70-30 is fair for in-app purchases, then you must by
logical extension accept that recurring in-app purchases that can be cancelled
at any time would also have this split, because technically one could provide
all in-app purchases at a steep discount simply as "subscriptions" that can be
cancelled after the first payment.

As far as I can tell, this is Apple's reasoning and rather inescapable at
that.

~~~
russnewcomer
I don't think that's a logical extension, personally.

However, I think Apple could say that a subscription purchase was 85-15 or
90-10 and they would have gotten this in with little push back.

Or even required that subscription apps cost $9.99 for the initial purchase
($9.99 is a number from my head with no basis in reality) and a following
90-10 split, or requiring that apps with a free initial release go to a 70-30
split on subscriptions. I really think they could have done that and not had a
major revolt on their hands. They may not have made the same in the short
term, but I think they would have had a better response and a better long-term
hold on small developer and publisher loyalty to their platform.

I would personally buy a Palm Pre 3 if it had Instapaper and Kindle and the
iPhone 5 didn't. I would venture that their are numerous other consumers who
have similar preferences.

[Edited for clarity]

~~~
macrael
Could you elaborate on why you don't think the parent comment has a point?

~~~
russnewcomer
I don't agree that Apple's rules have to be structured the way they are. I do
agree that if one merely extrapolates out the current structure, then the
rules make sense, but I don't think it's a logical extension of how it has to
be.

------
kmfrk
I like to think of Apple's side of all the negative stories, but this time, I
can't come up with a cogent excuse for what they are doing - save inept App
Store policies/reviewers.

By this logic, flattr will never get a native iOS app. And when are Apple
going to shut the Instapaper app down, when Marco decides to let his one-
dollar monthly subscribers[1] receive premium benefits?

Apple really hates newspapers and magazines.

[1]: <http://www.instapaper.com/subscription>

~~~
statictype
I think a large chunk of Instapaper's revenue comes from the iOS apps so
assuming Apple continues to keep acting like a douche, Marco would probably
just as soon cancel the subscription plan rather than let his app get
rejected.

~~~
nika
When he doesn't, and when he adds in-app subscriptions, will it cause you to
revise your perspective?

Instapaper is exactly the kind of app this is directed at. It is a SaaS
subscription. It would be foolish to turn away all the additional sales you'd
get by being able to offer subscriptions within the app (something you
couldn't do previously, forcing Marco to take paypal.)

~~~
statictype
_When he doesn't, and when he adds in-app subscriptions, will it cause you to
revise your perspective?_

Sure, I'd be curious to see if it's economical to hand over 30% of whatever
subscriptions he receives to Apple.

~~~
flyt
If it triples the number of subscriptions then it could be.

~~~
shangaslammi
Triple of zero is still zero. The open letter states that their current share
is 30%. Apple would essentially get 100% of their profits.

------
statictype
Perhaps this will be the one that gets enough publicity to make Apple come to
their senses and see the collateral damage being caused by their War on
Amazon.

~~~
sofuture
The collateral damage? They're making out just fine, what do they care about a
handful of app developers?

Maybe this will be the one that _gets developers to realize this is not a
sustainable game they are playing with Apple, by Apple's rules, in Apple's
world_.

------
toast76
I picked up an iPhone 3GS when they came out with intent of developing iOS
apps. Even at that time it was clear that playing in someone else's yard meant
playing by their rules, and that it was highly likely that I wasn't going to
like their rules. I decided to not make an app. Simple decision really.

A lot of developers are now complaining that they're getting burned by what is
a reasonably obvious profit motive from Apple. They're not offering an app
store because they're good guys. They're offering an app store to make money.

They take 30% of purchases. It only makes sense to take 30% of in-app
purchases and related subscription services as well. Did anyone honestly
believe that apple would fall for the ebay $0.90 purchase with $90 shipping
fee-dodging trick? Letting subs through just opens the door for people to ship
free apps with subscription "unlocks", thus cutting out Apple.

The simple fact is that Apple owns the mountain, and if you want to mine their
gold you can expect to pay their taxes.

Of course the simple solution is to just build a web app (as these guys have
done). Why restrict yourself to Apple's yard and Apple's rules when you can
target every device without rules, without restrictions and without a 30% tax?
The sooner ever developer realizes this the better off we'll all be.

------
petercooper
My satellite TV provider has an app I can only use if signed up to them. Do
they now need to offer TV subscription through their app? What about the
37signals Campfire clients? Do they now need to offer Campfire subs via inapp
purchase too?

~~~
rimantas
Answer to the first one is no, because you don't get their service in the app.

~~~
Bossman
As far as I can tell, Apple's new guidelines wouldn't let them put that app in
the App Store anymore. Apple's guidelines say you have to sell through the app
using their API and can't sell anywhere else. And you can't link to a place
where customers can buy your service outside of Apple's control.

~~~
diamondsea
They can sell other places, but not promote those other places within the app.

They could offer their subscription on their web site and collect 100%. Their
app would then be required to offer the same subscription deal as an in-app
purchase for the same-or-lower price, and then they would collect 70%. The app
could not refer users to their web site for purchases.

------
sammcd
Google cache:
[http://webcache.googleusercontent.com/search?sourceid=chrome...](http://webcache.googleusercontent.com/search?sourceid=chrome&ie=UTF-8&q=cache:http://blog.readability.com/2011/02/an-
open-letter-to-apple/)

~~~
alecco
An Open Letter to Apple

by Richard Ziade on Feb 21, 2011

Dear Apple: It’s your friends from Readability. Remember us? You put our
technology into your Safari browser last year. We’re writing this open letter
because – well – we’re a little upset right now.

Last Friday, you notified us that our Readability iOS application was
rejected. In explaining the rejection, you pointed us to 11.2 in the App Store
Review Guidelines:

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to
purchase content, functionality, or services in an app will be rejected.

We’re obviously disappointed by this decision, and surprised by the broad
language. By including “functionality, or services,” it’s clear that you
intend to pursue any subscription-based apps, not merely those of services
serving up content. Readability’s model is unique in that 70% of our service
fees go directly to writers and publishers. If we implemented In App
purchasing, your 30% cut drastically undermines a key premise of how
Readability works. Before we cool down and come to our senses, we might as
well share how we’re feeling right now: we believe that your new policy smacks
of greed. Subscription apps like ours represent a tiny sliver of app sales
that represent a tiny sliver of your revenue. You’ve achieved much of your
success in hardware sales by cultivating an incredibly impressive app
ecosystem. Every iPad or iPhone TV ad puts the apps developed by companies
like ours front and center. It was a healthy and mutually beneficial dynamic:
apps like ours get exposure and you get to show the world how these apps make
your hardware shine. That’s why we’re a bit baffled here.

To be clear, we believe you have every right to push forward such a policy. In
our view, it’s your hardware and your channel and you can put forth any policy
you like. But to impose this course on any web service or web application that
delivers any value outside of iOS will only discourage smaller ventures like
ours to invest in iOS apps for our services. As far as Readability is
concerned, our response is fairly straight-forward: go the other way… towards
the web.

Since we re-launched, we’ve already seen a significant amount of usage across
a wide range of browsers, operating systems and devices via the Readability
web interface – for both mobile and desktop. Looking ahead, we plan to
redouble our efforts to deliver the best possible reading app using the latest
best-of-breed web technology.

The new Readability is fueled by the free-form nature of the web. Just as
content pumps through the web’s piping, apps like ours thrive as nodes on the
web – unencumbered by levies or barriers imposed by others. As we said months
ago: “for us, the web is the right bet.”

Still, we’re always looking to give readers the best possible reading
experience and a native iOS client would help us do that. We hope you’ll
change your mind. If you do, we’d be happy to resubmit the Readability iOS
app. Regards,

The Readability Team

P.S. We’d we be glad to deliver Readability for iOS – with in-app purchasing –
if you’d carve out 70% from your 30% fee and share it with writers and
publishers, just as we do.

------
jrockway
I wish these open letters said, "we are ebaying our iPhones, removing our
other apps from the App Store, and switching to Android and Windows Mobile"
instead of "we are going to change our business model just because the default
icons you guys pick are so great".

Apple does not care about whiney letters. They might care if there are no more
apps for or users of iOS.

------
maguay
If the subscriptions policy isn't the absolutely craziest move Apple's ever
made, I don't know what is. iOS has converted me into an Apple fan, but not if
stuff like this continues.

~~~
Zakuzaa
It still doesn't beat the "Objective-C Only" fiasco..does it?

~~~
maguay
It's a strong second place then if it's not the first. Good thing is, Apple
backed down on that which is why I was just today trying out Airplay SDK on
Windows. Hopefully they'll back down on the subscriptions plan, too.

That said, it really should require us all getting up in arms over it for
Apple to stop stuff like this. They shouldn't have made such a policy to start
with! Very worrying for the future of the platform...

~~~
nika
That policy has been in place for 2.5 years, since the original AppStore terms
and conditions. It wasn't enforced because before now, Apple didn't offer SDK
support for subscriptions. People have had 2.5 years to prepare.

~~~
zacharypinter
To draw a parallel:

A law is only as good as it is enforced. There's a huge amount of laws out
there that would be very controversial if they started getting enforced. For
example, many states still have crazy/puritanical sex laws on the books.

------
EnderMB
This may be a stupid comment to make, but one I feel should be added to the
conversation. Why are people so willing to develop for Apple when Android is
now the larger platform, and has a far easier barrier to entry?

~~~
redrobot5050
There might be more Android phones out there, but you also can't get to them
through the Android Market. Not every country that has Android has an App
Store that will accept commercial apps. It's getting bigger and growing
faster, but Apple is still ahead of Android.

Also, Apple's tools for developing are just superior. The Android SDK is an
Eclipse/Netbeans Plug-in. Apple's is an 800MB-1GB version of XCode.

~~~
johnbender
The metric you've used to measure "betterness" here appears to be sdk file
size.

~~~
redrobot5050
No, the metric here is Interface builder vs. the eclipse plugin for Android UI
design. It's a lot harder to create an of equal or superior polish for
Android.

------
MartinCron
I haven't heard anything about this subscription model and Netflix. Will
Netflix be able to continue to provide their iOS apps without giving a cut to
apple? Seems crazy that they would have to.

~~~
irons
Netflix may be exempt, somehow:

[http://www.businessinsider.com/netflix-not-affected-by-
apple...](http://www.businessinsider.com/netflix-not-affected-by-apples-new-
subscription-plan-2011-2)

~~~
MartinCron
It implies that Amazon could get around this just by removing the "get books"
button from their kindle iPhone client, requiring people to make purchases
from a browser.

------
nnutter
Apple, I bought an iPad _because_ I could watch movies in Netflix and read
bookmarks in Instapaper, news in Reeder, and books in Kindle. Please send each
$37.50 (30% of the iPad sale shared four ways) to each developer for bringing
you a customer.

Or, optionally, stop acting like you, as a middle man, provides more added
value than the developers that make your platform so damn profitable.

P.S. WebOS still looks pretty damn nice.

------
damoncali
The reason this doesn't work is because Apple had to pick a number - 30%. For
some businesses, that makes perfect sense. for others 1% or maybe 70% might
make sense. But rigidly adhering to 30% (no doubt because of the massive
complexity of the alternative) is going to cut lots of business out just
because it doesn't make sense. Apple needs to rethink this - it's clumsy.

~~~
foobarbazetc
They have to pick 30% because in-app purchases are charged at 30%. You can't
have two variations of the same thing (one that auto-renews and one that
doesn't) charged differently.

Let's say the subscription cut was 10%. Everyone would release their apps as
free, and charge for everything as a "subscription" because it's less than the
30% cut for app sales or non-auto renewable in-app purchases.

Basically, there is no other percentage that Apple can use here, for very good
reasons. If they lower the percentage for this, they have to lower all the
other percentages.

And that's not going to happen, because 30% is pretty reasonable for what they
provide. The Android Market takes 30%, and Amazon takes _70%_ for Kindle
subscriptions.

Edit: IMHO, everyone talking about the percentage is missing the point. The
problem is the policy itself. It's just too general and broadly applied for a
huge amount of stuff out there. Marco nails the issues here:
<http://www.marco.org/3437484678>

~~~
damoncali
The way I see it, 30% is not "pretty reasonable". It _might_ be reasonable, it
might be a great deal, or it might be a deal killer.

It's not much different than if Google were to decide that all AdWords clicks
are now $3.

The thing is that nobody cared when it was a one time fee for their $1.99 app.
When Apple starts talking about subscriptions that may cost 10's or 100's of
times that each month, Apple starts to look like their overreaching - and it
could be damaging to long term adoption of the platform.

One might even hypothesize that these ham fisted policies are defining the
very nature of the offerings in the app store - it explains the preference for
fart apps over sophisticated (expensive) products.

Apple is just coming off as if they didn't think this through.

------
ajays
I believe what Apple is trying to do is to head off the possibility of being
scammed: app writers can give away their apps for free, but unlock the full
potential only when you "buy" a (lifetime) subscription. This way the writer
can keep 100% of the price of the app, instead of just 70%.

Do I agree with Apple? No. But I think this is where they're coming from.

~~~
jerome_bent
Apple already had measures in place to block that 'loophole' without these new
rules—or new interpretations of the rules, if you will. Apple banned an update
to ReadItLater, last year, because the reviewer believed the developer was
attempting to circumvent the in-app purchase:
[http://readitlaterlist.com/blog/2010/08/version-2-2-rejected...](http://readitlaterlist.com/blog/2010/08/version-2-2-rejected-
new-rejection-reason-from-apple-may-have-major-implications/)

------
guelo
As a developer I made the decision a few years ago to move away from Apple's
platforms because of their capriciousness, their extreme secrecy, and their
lack of respect for their developers.

I don't know how people invest in their platforms, I'd be constantly scared
that Apple would turn around and screw me over.

~~~
ChrisLTD
The trick is to get in, make your money, and get out before Apple decides it
wants in on your territory.

------
joe_the_user
I'm not impressed with anyone here...

Readability was trusting enough to release their code with a license which
allowed Apple to put the code in their product and then freeze readability's
product out of Apple's store.

And now the readability folks don't seem inclined to admit their trust was a
might miss-placed.

But perhaps that's because the readability model is aiming for a kinder,
gentler version of Apple's monopoly. They distributed a "product" that
reworking website in a manner that steals the original site's advertising
revenue. And then they "offer" to give the authors a different revenue source
(along with "offering" a lack of choice concerning how their product is
presented).

Edit: And problem with readability isn't in it just distributing a web-site-
rewriter in itself but it doing that AND then asking revenues from content
providers...

------
joshmanders
I don't understand why Apple is putting themselves in this situation.. Bad for
business. Apple HAD the market, then Google came along with Android, now
they're being snobs and just forcing their own users to switch to Android
powered phones just because of this exact thing. Shame really.

------
thought_alarm
The App Store does have the potential to drive a massive amount new business
for an app like Readability. Apple believes they should be paid for that
publishing and marketing service and it's hard to argue about that,
particularly when comparing to the relative poor performance of other "app
stores."

If the App Store fails to bring these developers new business then it doesn't
cost the developers anything. If the App Store does bring them new business
then it's up to the developers to weigh the cost of the App Store vs. the new
business it brings.

Is 30% the right price? Ultimately the market will decide that, because if
there's one thing this industry doesn't lack, it's competition.

------
iPhone1
What a slap to the face. Apple uses their technology then tells them they
can't use it themselves without offering in app purchases?!?!

~~~
kmfrk
Not exactly. If you haven't read about it, Readability (Arc90) has a new
subscription model[1]. That's the point of contention.

(Not that it's any less stupid.)

[1]: <https://www.readability.com/learn-more>

~~~
iPhone1
I know about the subscription model; I'm a subscriber.

------
talbina
Why do these types of letters have to start with the headline "An Open Letter
to...". If you're publishing it, it's obviously open.

~~~
Bud
Just to be nice and actually answer this person's question rather than just
downvoting them:

The distinction, as I understand it, is that labeling it an "open letter"
tells us that one entity (Readability) intends not just to publish a given
letter for all to read, but also make clear that it is directed at a second
entity (in this case, Apple), in the same way as if Readability had sent it
directly TO Apple.

It is also often hoped that such an open letter might elicit a public
response.

------
nhangen
I tend to agree with Apple's right to do this, but I can't tell if it's a
genius move or a stupid move.

I think this move could further empower Apple, in as much as to put people
like Rhapsody out of business. On the other hand, it makes sense to create a
hospitable ecosystem, and right now it feels like they are carpet bombing what
was once a nice place to hang out.

More of my thoughts here (podcast) [http://bluerize.com/free-market-
anarchy-020-apple-subscripti...](http://bluerize.com/free-market-
anarchy-020-apple-subscription)

------
T-hawk
We don't like it, but Apple's got every allowance and reason to do this.
Either Readability will cave to Apple's pricing model, or somebody else will
come in with the same technology and do so. Apple believes that the
competitive position they have attained allows them to dictate pricing terms.
The market will decide whether they are correct.

The only argument against Apple that holds water is abuse of monopolistic
power, but I don't think that will fly given that the whole market of Android
and Windows and other phones also exists.

------
joebananas
So basically: "We totally think your policies are right and groovy, but please
make an exception for us"?

~~~
shantanubala
Not quite. More like a "we know it's in your legal power to be needlessly
greedy, but we'd like you to stop swimming in money and be a little more
friendly for small developers."

------
mjfern
I posted this to my blog a few days ago, but I think it's worth repeating here
because it applies directly to this open letter:

While apps and content are just break even businesses for Apple, they are
instrumental to the company's financial success. The iPod, iPhone, and iPad
are each technology platforms that bring together consumers, apps, and
content. The value of each platform (iPod, iPhone, and iPad) to consumers
hinges on the availability of apps and content; and the value of each platform
to app developers and content publishers hinges on the number of consumers
that have adopted the platform.

In short, there is a virtuous circle in effect; hardware sales to consumers
attract more app developers and content publishers, and more apps and content
drive more hardware sales to consumers.

Apple’s new subscription model might strain or even break this virtuous
circle. First, since Apple is only requesting 30% of revenues if content is
subscribed to through iTunes it will likely cause content publishers to
encourage consumers to bypass iTunes and purchase content directly. Over time
this may reduce the relevance and significance of iTunes. Second, this 30% cut
will compel app developers and content publishers to find alternative, less-
expensive distribution channels. Google is the natural alternative given
Android and the Android Market, and the company has already launched the “One
Pass” payment system, which charges a lower fee (10%).

If this new subscription model is potentially damaging to Apple’s financial
success, then what’s motivating Apple to launch such a model?

It’s possible, though very unlikely, that Apple failed to consider the
implications of the model and the strain it would place on app developers and
content publishers. A second, more likely scenario is that this subscription
model reflects efforts by Apple to generate greater revenues and profits from
its apps and content business. A third likely scenario is that Apple is trying
to create barriers to entry for competing distribution platforms, such as
Netflix and Amazon, which will find it cost prohibitive to offer their service
through iTunes given the 30% in fees. These barriers may give Apple time to
further develop its own content distribution business. The immediate risk that
content publishers will turn en masse to Android is low given the delay of
Android-based tablets and other connected devices (e.g., connected TVs).

This subscription model may boost iTunes revenues and profits, and it may
create a barrier to entry for competing distribution platforms, such as
Netflix and Amazon. That said, I believe this move is a strategic mistake.
There may be some short-term benefits to Apple, but overall it will strain the
company’s relationship with app developers and content publishers. Over time
this will reduce the selection of apps and content available via iTunes,
reducing the value of Apple products to consumers, thus putting downward
pressure on hardware sales. In the meantime, partners and resources will
migrate away from Apple, towards Android. Over time this will add further
energy to Android adoption for app developers, content publishers, consumers,
and hardware producers. Android is already emerging as a force in smartphones.
With the launch of Motorola’s Xoom and other tablets, Android will soon gain
significant share in the tablet market as well.

~~~
mx12
After reading this, I am struck with the idea that maybe Apple's reluctance to
support flash, is not just motivated by the performance issues. That it could
also be that the DRM support in flash would mean that companies could just
abondon the app model and just use flash (i.e. Netflix or a flash based Amazon
ebook reader).

~~~
Pooter
I believe Jobs actually made this point fairly directly, though couched it in
terms like "if people start using 3rd party tools to generate cross platform
apps, you wind up with crappy apps that don't suit the platform, have
undesirable performance characteristics, and fail to take advantage of
platform specific features that get added."

------
kenjackson
DHH, if you're reading, is this what you were talking about?

------
tel
_P.S. We’d we be glad to deliver Readability for iOS – with in-app purchasing
– if you’d carve out 70% from your 30% fee and share it with writers and
publishers, just as we do._

This will never happen, but if it did I'd be ecstatic. It could be a great PR
move and really help Readability's goals to fund independent content producers
online.

------
sacrilicious
Believe you me, I want these guys to succeed as much as anyone else, but...
wouldn't keeping the payment processing for subscriptions OUTSIDE of the iOS
app solve the issue? I must be missing something critical to the functionality
of the app?

There are no non-profit or even strictly business-related terms under the
umbrella of the App Store as far as I know. There are no corporate/business
iTunes purchasing accounts, no escalation to root-level privileges allowed for
apps in the MacAppStore(postponing backup and other more powerful apps). This
seems like another oversight on Apples part due to treating it as a lower
priority.

And although they have every right to be proud of their achievements, it seems
a bit like "you owe me" to remind Apple that they used the Apache-licensed
Readability tech for Reader. Their proposed app could stand on its on.

~~~
msbarnett
> Believe you me, I want these guys to succeed as much as anyone else, but...
> wouldn't keeping the payment processing for subscriptions OUTSIDE of the iOS
> app solve the issue?

What you're missing is the other rules which _force_ you to offer purchase via
IAP _because_ you offer subscriptions outside the app, too. The following
terms apply:

11.1 -- Apps that unlock or enable additional features or functionality with
mechanisms other than the App Store, except as approved in section 11.13, will
be rejected

11.12 -- Apps offering subscriptions must do so using IAP, Apple will share
the same 70/30 revenue split with developers for these purchases, as set forth
in the Developer Program License Agreement.

11.13 -- Apps can read or play approved content (magazines, newspapers, books,
audio, music, video) that is sold outside of the app, for which Apple will not
receive any portion of the revenues, provided that the same content is also
offered in the app using IAP at the same price or less than it is offered
outside the app. This applies to both purchased content and subscriptions.

11.14 -- Apps that link to external mechanisms for purchasing content to be
used in the app, such as a “buy" button that goes to a web site to purchase a
digital book, will be rejected

------
lwhi
I think Apple may have decided to enforce an untenable rule, simply so it can
be used as a reasonably large concession when the antitrust machinery slides
into gear.

If you are going to be required to give up ground - you might as well grab all
the ground you can prior to any punitive action.

~~~
billswift
That sounds like the man who beat his head against the wall; because it felt
so good when he quit.

~~~
lwhi
I know what you mean - this scenario sounds quite backwards, but I'm really
having quite a lot of trouble understanding why Apple has decided to go ahead
with this.

If they honestly think they can get away with it, I think this might be a
signal that they're losing touch with their community.

------
trout
I don't understand the legal ownership fuss of their decision. If they had
decided to take 5% instead of 30% there would be no discussion here. The only
difference between 5% and 30% appears to be whether or not it's a good
business decision. It does alienate a number of applications that have less
than 30% margin, but that appears to be Apple's motivation. I would not go so
far to say this should be expected, but it's a risk you take when you play
with a company that likes to own such a large portion of the experience.

------
devin
Avoiding a lot of the discussion here to make a quick but important
observation: I suggested in a comment I believe I posted here months ago that
Apple would add its "Reader" to the iOS platform.

This is a calculated move on Apple's part to make sure that when they deploys
Safari Reader for the iPhone it is /their/ idea and not the folks at
Readability.

Shame, shame, shame. I know you're name.

------
jpwagner
I think they might have a point, but their ineffective communication style and
adversarial tone will surely guarantee they are ignored this time around.

------
nika
I think it is worth noting, because everyone seems to have forgotten, that
this has always been the rule. I remember it from the very first reading of
the terms and conditions (back when they were under NDA).

It has always been against AppStore rules to monetize apps outside of the
AppStore. Apple has been lax in enforcing it, _primarily_ because Apple didn't
offer a subscription mechanism.

Now they offer a mechanism, and so now people can comply with the rule, and so
now they are enforcing it.

~~~
ChrisLTD
A rule isn't a rule until it's enforced. Apple has effectively changed the
rules after tricking companies like Amazon and Netflix to develop software for
the App Store, which was – until now – a mutually beneficial arrangement.

~~~
commandar
Wasn't Netflix functionality something Apple used as a selling point for the
iPad?

------
ascendant
Through all of this I wonder if they knew there'd be so much angst and now
they will "concede" to something like 15% with that being their plan all
along. When you make a policy that's really really really bad to then scale it
back to just being really bad, people think they're getting a deal.

