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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.

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

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.

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