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.
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.
"Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset."
Microsoft definitely has their own crazy and draconian licensing and "ownership" issues, but I can't tell from your comment which one of the thousands of possible example cases you're referring to.
If you have a well-reasoned counterpoint, please post it. I'd honestly love to hear a different perspective.
If I understand correctly, you argue that users don't "own" the device because Apple sells it as a whole stack or because they write the iOS and license it to users. My point is that even with licensed OS users should be free to do whatever they want on the device. When I buy an iPhone, the iOS is already installed so I assume I have also bought the right to use it (like Mac OS?). It doesn't matter whether the OS that comes with the device is written by the hardware manufacturer or not; hence the Microsoft analogy and that's why i disagree with you.
Now when it comes to the subject of App Store, someone has pointed out correctly that App Store is a distribution channel and Windows or iOS is an operating system. It was not my comparison. Here I do agree that Apple has every right to charge developers for any amount they want, or the right to deny any app they don't see fit in the App Store. However Apple don't allow any other channels on their system. That is still in their right to do so, but it will raise some issues when the iPhone/iPod Touch reaches a certain market share.
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
It is a pretty good comparison as long as App Store is the only way to install anything on iOS
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.
From my experience, it turns older iPhones into a stuttering laggy mess and breaks visual voicemail, and makes you paranoid about every iTunes update.
can apple "license" the physical shape of the device and charge 30% on all sales of protective sleeves?
Hardware is different. Unless you specifically sign a contract like a lease that makes some arrangement other than the traditional you bought it, you own it scenario you can do whatever you want with a piece of purchased hardware. The have been cases in the past, for example DirecTV receivers where the hardware purchase price had a built in subsidy, requiring you to sign up for a subscription. When people started paying cash (instead of the usual credit card sale for a $300 item) and not activating the hardware (because they were easy to hack) DirecTV changed the way retailers were allowed to sell the hardware.
People keep getting the iOS software, and the related devices confused, thinking of them as a single entity. You own your hardware, but you don't own the underlying software. Among other things, the lawsuits targeted at the company that was selling OS X loaded on clone hardware (forget the name) also seemed to prove this out.
Various examples that aren't allowed: EULAs that purport to prohibit resale of books (first-sale doctrine), labor agreements that purport to prohibit the employment of members not from the contracting labor organization (union closed shops), deed restrictions that purport to prohibit resale of property to a class of people ("no reselling this house to blacks"), noncompete agreements in some states, exclusivity contracts entered into from a position of market dominance (the Microsoft and Intel OEM cases), certain kinds of explicit tying even when not in a position of market dominance, bequests that contain ongoing conditions on the heirs' behavior (rule against perpetuities), etc.
One example that is also in the "seems related" area but is legal in the U.S.: resale price maintenance, where a manufacturer can prohibit a retailer from selling a product below a certain price. One that's currently being debated is the vague set of issues around "network neutrality", related but not identical to the last generation's debate over "common carrier" status. Gray area: EULAs that purport to prohibit decompilation and reverse engineering.
I know it's a category with vague edges, but it seems like there should be some name for it? These kinds of contracts, even the ones we decide are allowed, seem different in kind from pure exchange contracts of the form, "I give you $100, and you agree to provide me with 2 hours of consulting".
The thing is that, as you say as I understand it, whether a contract is considered unconscionable is normally a complex question; for example, terms that are unconscious in a residential real estate contract can be included in a commercial real estate contract because a commercial renter is considered more sophisticated (and so if you rent commercially, you better be sophisticated and count your fingers after every hand shake). One guiding question is whether the signer really knows what he getting into.
By that token also, I believe a number of terms are considered unconscionable if you click through them on a website. I would speculate that if a vendor sent an actual devil who blew smoke out his ears and demanded a video-taped signing in blood celemony, that vendor would have a stronger claim that "the signer knew exactly what he was getting into".
Will Apple employ Devils in the future? I think Microsoft may have them all tied up...
IANAL of course...
> There are no natural contracts.
What really matters is why we should inform our thinking with how animals treat each other.
Frankly, this has little to do with the original post - I just made my original comment in response to someone saying "don't kill" is an example of a natural contract.
On the other hand, I do find my aversion to killing rather natural in the sense that I needn't justify too much beyond my own instinct (and, if you should know, ethics as instinct is the subject of research with promising theories, but I'm not even talking about that).
One of the natural rights protected by the Common Law is the right to enter into contracts and have the terms of those contracts enforced in a court of law. But a contract cannot abrogate a natural right, or such contract is null and void. Thus you cannot enter into a contract to take the life of another person.
When Apple sells you an iPhone, it ceases to become their phone and becomes your phone. You're not leasing it, you aren't renting it, you've paid for it and it's yours.
This is somewhat orthogonal to the original point, which was that Apple is free to reject whatever applications they like from their application delivery channel, just as I'm free to choose my clients, but it's important to remember.
> It's not Apple's duty to make it easier for you by building
> a boot loader into the device [...]"
But all of those people already have that right. So the complaint is: Apple is required to do more to allow me to do things I can't manage on my own.
It is an implicit claim that Apple is duty bound to provide features that Apple has no interest in providing.
My toaster doesn't make ice, nor does it heat my living room. Simply because I own the toaster doesn't mean there is any logic in my complaining that the manufacturer didn't provide a means for me to do those things with my toaster. If the toaster manufacturer decides there is a market it wants to be in for a toaster that makes ice, it can build that toaster. It's not obligated to build that ice-making toaster even if there is a huge market for it.
Not legally. A limited amount of iPhone jailbreaking has been exempted under the DMCA, but that won't absolve you for the offense of trafficking in the tools to do so. And there are a million other EULAs and such that at least purport to take away that very right. IANAL, but I've seen people dragged into court over them. Whether or not they're legal is pretty much academic if you have to go through the expense of fighting it out in court against a giant company.
The point is that the vendors are taking away our legal right to do all these things and occasionally adding some screw-you technology to make them technically difficult as well. They're not passively thwarting your ability to do what you like, they're actively opposing it both technically and legally and that's why people worry.
My response has been not to buy devices like that and to boycott those vendors wholesale, but the way the market is going, that's not going to be possible forever. We need a good first sale type right to eliminate all this nonsense.
We would never have made it this far if those nonsense book licenses that publishers tried back in the day had actually been successful.
While I suppose that people wouldn't have this problem if they were using it as, say, a doorstop, that's not really the issue people are having here.
The claim "I bought the hardware, I own it, therefore I should be able to do what I want with it and Apple is preventing me", which is the general argument being made, is fundamentally false. You bought the hardware, you own it and you can do what you want with it.
You have to jailbreak an iPhone to install other software, or so claims PC World. That's definitely a technical barrier, just like I explained. And a legal one, with the DMCA "trafficking" problem. Having established that their opposition is not merely passive, your complaint rings hollow, unless when you said that, you were trying to say that they were less than upfront about disclosing the restrictions?
No link will be given to those instructions. They're incredibly easy to find, but I don't want to run afoul of the nebulous contributory infringement claims like "inducement." My recommendation is for people like me with a problem with this to avoid buying the products to begin with. It's the approach I have selected.
That's not the manufacturers problem.
The govt has already declared that jail breaking your phone is legal.
That's a terrible argument to make in Apple's case:
It wasn't accidental, necessary or even cheaper to make the iPhone require a jailbreak before you could install your own stuff, after all.
> The govt has already declared that jail breaking your phone is legal.
That's a very misleading way to put it.
I already explained why the Librarian of Congress' exemption for jailbreaking an iPhone is useless because they do not (and cannot) exempt anyone from the ban on trafficking in such tools.
You can read more about how the DMCA works here:
Hopefully that will be enough that you can understand why the Librarian of Congress wrote, "Nor is this rulemaking about the ability to make or distribute products or services used for purposes of circumventing access controls, which are governed by a different part of section 1201."
That's the statement in which the Librarian of Congress exempted people from the ban on circumvention (but not trafficking) things like iPhones. The specific phone exemption is exemption #2.
Now then, how does one jailbreak an iPhone legally if they're not allowed to make or distribute the means to do so?
If you read the Freedom to Tinker article, you'll remember that the DMCA says that you cannot "manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof" that is "primarily designed" to circumvent, has only "limited commercially significant" non-circumvention purposes, or is "marketed" for circumvention purposes.
That word "manufacture" is the sticky one, not that you can't run afoul of the others. Damn hard to circumvent things when you can neither make nor import the tools to do so.
The DMCA is one big catch-22. Claiming that the government has declared this legal is very dangerous. IANAL and you need proper legal advice before dealing with this stuff.
I solve it by not owning an iPhone in the first place.
> There is no reason for the channel to be Apple's
If you had the option of buying apps through another channel, this wouldn't be a problem. Most people don't have much of a problem with any of the Android Market's policies, since you can install other apps or even other markets on your own phone if you so choose.
Why don't you just remove Apple's software and install your own?
You are correct that consumer EULAs haven't really been tested in court, but that is irrelevant to this discussion. This isn't about the EULA. Apple is not stopping you from putting a third party app store on the device. They are stopping you from putting a third party app store on the stock iOS. If you jailbreak, then you can put Cydia on it.
And who is this larger segment that benefits from this decision (besides Apple employees and shareholders)? Is there a group of people who hate to have the chance to use Readability?
The only viable channel at this point is Apple's. If there were a way to access non-Apple blessed applications without rooting your device, then people might not complain so much. Savvy consumers don't appreciate monopolies.
That said, Readability's claim that this "smacks of greed" is totally right. Apple is not acting in its users' best interest, because more than other moves, this actually affects their developers' business models, and it's going to drive high quality, innovative apps away from the App Store.
There are two viable moves Apple can make:
1) Allow subscriptions outside the app without requiring one in the app
2) Lowering the 30% fee for in-app subscriptions
Both of these options keep value in the App Store while providing Apple with some benefit. If they don't adopt one of these, the long term viability of the App Store is in jeopardy.
Comparing the iOS with a magazine is slightly disingenuous because the scale is much so larger.
I think all markets should involve a certain amount of freedom - and Apple's decision making process actively inhibits market freedom.
EDIT: iOS/App Store
The "global marketplace" is the one in which you can purchase a piece of hardware, install software of your choice on that hardware (albeit sometimes with a great deal of effort), possibly licensed from a third party (again, albeit sometimes with a great deal of effort).
Apple sells a service - they make it easier to install certain software on the hardware you purchased (from them, although that's irrelevant), to the extent of pre-installing iOS and various applications, and they facilitate discovery of individuals willing to license software to the owner of the hardware and transactions between said individuals and the owner of the hardware.
They are free to provide or not provide this service as they see fit.
If you really believe that Apple should provide this services gratis to developers as some kind of latter-day addition to the Bill of Rights, perhaps you should lobby the government to purchase the App Store infrastructure and oversee it instead?
All of his points map exactly onto TV stations. Is that large enough scale for you?
It's a bit naive to state that people have choice - because if you have a iOS based device, you (effectively) only have one place to make purchases. Jail-breaking and third-party software sources are beyond the reach of most consumers.
For all intents, if you have an iOS based device, the AppStore is your marketplace - and it is a marketplace which trades globally.
"All of his points map exactly onto TV stations. Is that large enough scale for you?"
A TV station purchases or licenses content on behalf of their customers. Apple doesn't operate in this way.
I honestly believe the most useful analogy is a 'marketplace' - however, if this is accepted, perhaps Apple's policies seem more disagreeable than they do if 'tv station' or 'magazine' is used as a comparison. Maybe this is why Apple's supporters seem unkeen to make the comparison?
"If you really believe that Apple should provide this services gratis to developers as some kind of latter-day addition to the Bill of Rights, perhaps you should lobby the government to purchase the App Store infrastructure and oversee it instead?"
I think Apple should be forced to allow third party App Stores.
If you think that's something most consumers would desire and are incapable of achieving, then go into business jailbreaking iPhones. You can install an app store while you're at it.
Again, they can't stop you. Open up a brick-and-mortar store where you jailbreak iPhones and put your own app store on the iPhone. Sell kits online.
I honestly believe the most useful analogy is a 'marketplace'
What does 'marketplace' even mean? If you're selling stock on the NYSE, someone's collecting vig. If you're selling consumer goods at a mall, someone's collecting rent. If you're selling something on Amazon, they're collecting vig. How does calling it a 'marketplace' support your argument when just about every privately owned 'marketplace' involves someone collecting vig?
- however, if this is accepted, perhaps Apple's policies seem more disagreeable than they do if 'tv station' or 'magazine' is used as a comparison. Maybe this is why Apple's supporters seem unkeen to make the comparison?
Apple supporter? I am an Android phone owner who is keen to know why you don't buy an Android device, and write apps for it.
What this all boils down to is that consumers are perfectly capable of escaping lock-in and installing whatever software for which they can get a license. However, they both trust Apple's imprimatur enough and value individual apps lowly enough that they don't. Consumers don't want <app> enough to venture outside of Apple's convenient payment and discovery service. You are attempting to disguise this reality by saying that Apple restricts the consumer's choice, but this is a canard. <App> is simply not compelling enough for most consumers to jailbreak their phones, or buy Android, to get it.
Users own the iPhones bought. Therefore Apple should either let users subscribe to third-party channels, or release their channel in the hands of users (i.e. let them approve or ban apps).
Otherwise, if there will ever come a day when Apple will have a monopoly on his hands, a big lawsuit will also happen.
And really, I can see why Apple wants to control their channel, but why should I be restricted to their channel only? Why should I jailbreak my phone, which is dependent on kernel / various other exploits and risk bricking my device and losing the warranty if I want to be freed from Apple's channel?
It's just another service, separate from the phone, you're free to use it, or not use it.
The answer to your why's is probably "because they can".
iOS is a platform for third-party apps. That's how it's now sold (right on their website: "The world’s largest collection of mobile apps").
That's a lock-in mechanism. Switching between phones with no third-party apps is a lot cheaper that switching between the iPhone and a Blackberry.
They could do this if they wouldn't have allowed any third-party apps at all; if the popularity of the platform for third-party apps wouldn't be one of the reasons iPhones are selling like crazy.
And I also don't get this apologetic behavior from people in regards to Apple's actions. Do you miss the 90s when all you could use and target was Microsoft's OS? Do you miss the whims of Microsoft and the iron grip they had on the industry?
What, do you feel too much freedom of choice now? You think it's unhealthy or something?
Maybe it's a stretch, but I don't feel like I own it until my 2 years is up.
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.
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.
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?
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".
I wonder how this affects the Instapaper "back door" to Readability (which is what I use)
I am also wondering where this is goingn to end. Why not ask for 30% off Evernote subscriptions too? Or every cloud accessing iPhone app?
This isn't going to end well.
The point is that unlike, say, Netflix, I am not paying anybody to serve me licensed content. I am donating (extremely selectively in my case) to specific publishers. It's hard for me to see how Apple needs to be involved here.
I should add that I never used Readability and used Instapaper extremely rarely prior to this scheme. My only interest here is that this is the first content micro-donation scheme that I have seen that allows me to pay for content I like. I don't see where Apple fits into this, morally.
Let me ask this question: if there was a free Red Cross app that allowed you to make donations, should Apple get 30% of that?
Let me answer your question with a question: Does Visa take a percentage of donations made to the Red Cross using a Visa credit card?
If Readability wants make an iPhone app, and keep giving $7 for very $3 they make, they'll have to make their in-app purchase price $14.99. Also they can't charge less anywhere else.
IAP price = regular price / 0.7 then rounded up to the nearest integer (less a penny).
This is an interesting question that deserves thought. Readability provides publishers/writers with an application and a new medium to distribute their efforts. And for their efforts towards building this new medium, they require a 30% of cut from end users cost.
- Would publishers/writers be able to publish their content in any other way on the iphone. Of course.
- Would publishers/writers be better off using another way publishing their content on the iphone. Maybe.
Apple provides iOS API for App writers to distribute their efforts (Apps). Apple takes a 30% (or is it 40%?) cut from the App end users cost for their efforts. So far so good, all sounds fair.
Now Apple (for whatever reasons; we'll go through them soon) enforces that:
- All developers use only iStore for any end user transaction. This may be enforced by Apple on the grounds of providing a consistent and safe end user experience. But its is mostly to do with keeping a tight control over the market (end user) and their revenue stream.
- Use only iOS for developing any Applications. Ditto said and actual reasons.
- And now Apple also wants not only a 30% cut of the App sales (which is fair), but also a further 30% cut of the subscription revenue stream (which the App publishers have rightly described as exceedingly greedy. But it is also "monopolistic")
So lets view the fairness arguments again. What would be fair for Apple to do so that they are paid a deserving portion of revenue for their efforts? They could mandate that
1. Any paid for App will not encumber additional subscription revenue share (tax), as long as they do not use Apple's streaming resources (is this 100% possible for subscription services?)
2. Any App which is distributed free, but is paid for by a subscription model, will have a revenue share agreement with Apple.
What about the user community and the society as a whole? What is fair for them?
- It is definitely fair for the user community to have an ability to use their devices (both hard and soft parts of it) in ways that they seem fit, unless of course it harms anyone else. Although I strongly believe in a "take it as it is or leave it" argument for Apple, I also believe in a code for fair conduct (think "consumer rights") towards consumers.
- It is healthy for the society as a whole to have ecosystems for software stacks (iOS), application stacks (iOS API and Apps), and content. It is also healthy for society as a whole to have companies like Apple take profit in certain ways that aid their business. However there is some rights for consumers that must be upheld by society. For instance if an iphone leaks acid causing injury to user, then surely Apple will be held accountable in a court. There is some similarity in Apple leaking because of its revenue share causing financial injury to developers.
All things said and discussed, what all of this really about is, Apple controlling their user revenue stream, and pricing out its competitors in the application stack.
iTunes <=> music store
iBooks <=> book store
so on and so forth.
A lot of those 30% subscription cuts could be going towards development of Apple's competing applications. Apple is most certainly monopolizing its customer base against other developers in its App market. And Apple invited them in the first place and has misplaced their trust. It is a thin line that they have now crossed without much discussion (public).
This isn't the case. The only state that you must offer the ability to buy in the app and they get 30% of that charge. You can still collect payment outside of the app on your website as well.
You're right, but you know what? They wouldn't allow a link to the App publishers website, where the end user could pay for services etc.
>So lets view the fairness arguments again. What would be fair for Apple to do so that they are paid a deserving portion of revenue for their efforts? They could mandate that 1. Any paid for App will not encumber additional subscription revenue share (tax), as long as they do not use Apple's streaming resources (is this 100% possible for subscription services?) 2. Any App which is distributed free, but is paid for by a subscription model, will have a revenue share agreement with Apple.
I'm not sure that's an accurate analysis. It appears you want to define Apple (and iOS) as simply a technical infrastructure service provider: bandwidth, disk space, etc. If that were true, iOS would be effectively identical to Android and no one would complain about this 30% because they'd just hop over to Android without a second thought.
Apple is providing a service to iOS developers: access to the iOS eco-system. Developers are not required to develop an iOS app, they have numerous other options for distributing their application/service. If they want to leverage the iOS eco-system (installed user base, iOS advertising & marketing that Apple pays for, SDK that Apple has developed and maintains that is often considered rather efficient at enabling development of user-friendly applications, payment processing system that is extremely easy for end-users, etc), those developers must agree to Apple's terms of access. In return, Apple believes they can charge fees for various methods in which a developer may choose to use the wide range of features Apple has created in their iOS eco-system.
Readability is, as far as I can determine, nearly identical: they have developed a service that provides access to other people's creative work and Readability charges for that service. As an end user, I don't have to use Readability to access the original creative work. If Readability is "allowed" to charge the content owner 30% to give me that special Readability access, why can Apple "not" charge the developer 30% to give them access to that special Apple eco-system?
My entire point would be moot if Apple required 30% of all revenue from Readability regardless of whether the subscription originated from within the iOS app or from Readability's website - but Apple has not done that, which is exactly why Apple's fee is a fee to access the eco-system (not specifically to use Apple's bandwidth, Apple's storage space, etc).
edit: In fact, on further consideration, why is Readability's business model considered fair in and of itself? They provide a mechanism for a publisher to voluntarily sign up to receive the 70% Readability wants to give them - but does that mean Readability will not function on a publishers content if that publisher does not agree? I don't believe Readability is blocking access to content from publishers that have not signed up. Effectively, Readability is extorting publishers: give us 30% or we'll take everything. Apple on the other hand is simply saying: give us 30% or you can't use our service. The latter is blatantly more "fair" as it only exists with choice. The former requires publishers to actively use resources to block Readability (on a continuing basis) in order for the publisher to maintain their previously established business model. The publisher's choice has been eliminated. How can Readability justify that?
Readability has costs, and provides a service for free. They give you the choice of using their service for free (no revenue for them, no revenue for ad-driven content sites), or paying them a fee for the use of their service (which is strip everything except the content so you don't have to - a value-added service if I ever saw one). This fee gets forwarded to the content author, while they keep a commission for the service they're providing you. You, presumably, see a value in their service, or you wouldn't use it. You see a value in the content, or you wouldn't read it. They give you the choice of supporting the content and the service, where money is split to support the service you like and the content you like, or just use it without paying anything. The content author is denied ad revenue because you use a service which strips ads. This service now offers you the chance to support your favorite content authors directly, to compensate for the loss of ad revenue.
And you see extortion where?
>My entire point would be moot if Apple required 30% of all revenue
>from Readability regardless of whether the subscription originated
>from within the iOS app or from Readability's website
Your point is moot. Apple takes 30% from in-app subscriptions. People using the app don't have a choice between subscribing through the app or through the website, seeing as Apple does not allow linking to the website. Obviously, people using the app won't think of going to the browser to subscribe. Hence, even though it seems there's an alternative, toll-free way to subscribe, in practice there isn't. Even though it looks like it's optional, it's not, and content-based apps are going to be especially hit with this toll. The Apple 30% toll - encouraging people to develop for your platform, then putting up flat 30% fees on revenue - now that is extortion.
Readability then tells the publisher "we're charging our subscribers in order to remove the ads from your site, if you want 70% of that revenue, sign up here, the alternative is, you get 0% and you also lose the revenue from your ads because we're going to scrape your content anyway".
Publishers can now either agree to Readability's redefining the publisher's business model, or they can fight back by using resources to subvert Readability from scraping the content.
Readability's business model is very similar to such P2P companies as Limewire: charging people for an easy method of accessing content that belongs to others. The only difference is, Readability has offered, apparently out of the kindness of their hearts, to pay a portion of their revenue to the publishers they steal content from. The publisher has no choice to be uninvolved in Readability's business model, they either accept it and get a percentage of it in lieu of their existing revenue, or Readability justs cuts the publishers existing revenue.
That's nearly the textbook definition of extortion.
Regarding Apple, you're absolutely wrong. No one is forced to develop an iOS app, so automatically, extortion is off the table. Further, the 30% does only apply to in-app subscribers, and though you want to claim that means everyone has therefore had their choice removed and must subscribe in-app, that's simply false. In addition, if most of your subscribers come from in-app purchases, you can thank Apple for setting up and maintaining an eco-system that is in turn your largest market.
Your point is not very clear here. Are you claiming that Android cannot be run on the iPhone (technology wise), or that iOS provides an API whereas Android does not? Both don't seem to be the case.
>In return, Apple believes they can charge fees for various methods in which a developer may choose to use the wide range of features Apple has created in their iOS eco-system.
My contention is that if Apple charges for the application usage revenue share for using iOS, then its fine. Also if Apple dictates that if an App is free to install for a customer (in which case it gets zero revenue from end user for iOS services), then it can charge a share of the subscription revenue. However, Apple dictates that it be paid 30% of the end user subscription revenue regardless of any distinction of whether the revenue is from the application, or for its content. (Yes there is a fine distinction between the two. To Apples credit some of these application are distributed for very low cost (near free), in which case Apples revenue share is disproportionate. But then Apple also charges an annual developer license fee!
>If Readability is "allowed" to charge the content owner 30% to give me that special Readability access, why can Apple "not" charge the developer 30% to give them access to that special Apple eco-system?
Of course Apple can, and it does charge developer 30% of Application revenue. It also charges $100/year per developer for its API. But what is not fair is that it also demands an additional 30% of subscription revenue. What has Apple done additional to providing an iOS environment and API (the first 30% cut) to warrant a subsequent subscription revenue share (blood sucking second 30% cut)?
>My entire point would be moot if Apple required 30% of all revenue from Readability regardless of whether the subscription originated from within the iOS app or from Readability's website - but Apple has not done that
- No link allowed to App publishers website to subscribe from there.
- Not allowed to use items which were subscribed outside iStore, unless it is also available in iStore.
These points reek of blood sucking greed. May Apples developers leave in droves to Android, and beat some sense into shitty Managers unfairly monopolizing Application development on its iOS platform.
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.
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.
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.
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]
Say what you want about Microsoft, they never stooped to the level of _actual_ fascist Nazi crap like that.
Widely denounced as unjust.
Man if it were my business I sure wouldn't want to risk pissing off developers or the consumers right now:
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 receive premium benefits?
Apple really hates newspapers and magazines.
That's the most obvious route for Marco - the (rhetorical!) question was directed at Apple, because they appear to thwart a large domain of what iOS could be used for.
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.)
Sure, I'd be curious to see if it's economical to hand over 30% of whatever subscriptions he receives to Apple.
How about they sell the phone?
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.
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.
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.
by Richard Ziade on Feb 21, 2011
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.
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.
Apple does not care about whiney letters. They might care if there are no more apps for or users of iOS.
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...
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.
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.
XCode is a really unpleasant IDE to work in imo because it has so many separate windows, even in the All-In-One view. Admittedly, this could just be because I am so used to the VS/Eclipse single tabbed window style.
I dislike that XCode is only available on OS X which adds the cost of (expensive) mac hardware to app development (or the difficulty/annoyance of updating a hackintosh every time a new version of OS X comes out).
And finally, it is annoying to have to download/install an 800MB-1GB version of XCode every time a new version comes out.
It's my impression that iOS developers make more money - although cross-platform development can be considered.
I am probably never going to own an Android phone, so I won't be developing apps for myself which makes development too artificial.
This blog post has made me consider looking into Palm/WebOS, though.
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.
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
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.
Do I agree with Apple? No. But I think this is where they're coming from.
I don't know how people invest in their platforms, I'd be constantly scared that Apple would turn around and screw me over.
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...
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.
(Not that it's any less stupid.)
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.
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...
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.
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.
Starting to sound like Mac vs. Windows all over again. I thought the App Store showed that Jobs had learned his lesson that the systems with the most software and content win. Putting that at risk fits the classic folk definition of insanity (same behavior, expecting different results).
Of course, next mp3 player will be some no-name brand, I expect. :-)
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.
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.
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
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.
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.
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.
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.
READ THE TOS PEOPLE.