Apple itunes subscription policy for content developers thread

[TheForce]

I don't think there is any anti-trust action on Apple's or Google's part in getting a % of the sales for a product or service they sell in their store, even if that store is a virtual store. If I sold my product at Sears, not only would I expect to pay Sears a % of my margins to have them handle the sale to an end user but I would also never expect them to allow me to advertise on the product- "Buy this product at JC Penneys" either. I don't see any of this comes even close to anti-trust. It's OK for the DOJ and FTC to look into it because they may find something that is anti-trust, but it surely won't be the advertising links and % of the sales argument, Based on the above it's a waste of taxpayer's money and a ruling against Apple could affect the entire way retailing is done.

Banning apps from linking to external sites "sounds like a pretty aggressive position," said Eric Goldman, director of Santa Clara University's High Tech Law Institute. "It seems like that's purely in the interests of Apple trying to restrict people doing transactions they don't get a cut from."

And yet another academic who just doesn't understand anything about what's customary and common in retailing. Does this professor live under a rock?* Where does he find any product on display in any store that suggest the customer in that store go elsewhere to buy the product? It is rare and most likely if he could find such advertising, it will be done with the permission and agreement contracts already in place with the two companies to allow that.

I'm not saying Apple is squeaky clean in anti-trust practices. In fact the article clearly shows two such cases in recent history, one where there may have been some collusion between companies to agree not to compete for employees, thus fixing salaries workers could demand. The second case that is highly questionable is that of Eric Schmidt being on the Board at Apple while serving as CEO of Google.


* No pun intended.

I say it's good that the government is doing its job but in this case, the so called experts offering opinions clearly are driven by some other agenda than the UCC and anti-trust law. Otherwise their arguments would have more solid footing.

 

[dangue]

I don't think there is any anti-trust action on Apple's or Google's part in getting a % of the sales for a product or service they sell in their store, even if that store is a virtual store. If I sold my product at Sears, not only would I expect to pay Sears a % of my margins to have them handle the sale to an end user but I would also never expect them to allow me to advertise on the product- "Buy this product at JC Penneys" either. I don't see any of this comes even close to anti-trust. It's OK for the DOJ and FTC to look into it because they may find something that is anti-trust, but it surely won't be the advertising links and % of the sales argument, Based on the above it's a waste of taxpayer's money and a ruling against Apple could affect the entire way retailing is done.

And yet another academic who just doesn't understand anything about what's customary and common in retailing. Does this professor live under a rock?* Where does he find any product on display in any store that suggest the customer in that store go elsewhere to buy the product? It is rare and most likely if he could find such advertising, it will be done with the permission and agreement contracts already in place with the two companies to allow that.

I'm not saying Apple is squeaky clean in anti-trust practices. In fact the article clearly shows two such cases in recent history, one where there may have been some collusion between companies to agree not to compete for employees, thus fixing salaries workers could demand. The second case that is highly questionable is that of Eric Schmidt being on the Board at Apple while serving as CEO of Google.

* No pun intended.

I say it's good that the government is doing its job but in this case, the so called experts offering opinions clearly are driven by some other agenda than the UCC and anti-trust law. Otherwise their arguments would have more solid footing.

Sorry Don, but in this instance your physical store analogy fails with regards to external linking from within the App. Let me explain: in this case the App is the product that is purchased in the App store (the product at Sears in your example). What Apple is saying is that you can't link from within the App to a place of sales that Apple does not profit from. That is not prohibiting a link in the store, it's prohibiting a link in the product itself. That is not the same as Sears refusing to put up signs to a competitor's sale of the item, its akin to refusing to allow the product's creator from putting a card in the box advertising their other products with a list of establishments where they can be purchased (not just the retailer where the original product was purchased). Those inserts are very common, and brick and mortar retailers have no control over them. I think this is a more accurate analogy.

As for the anti-trust implications, demanding 30% and demanding that the product not be priced for less anywhere else might be perceived as a form of price fixing. I don't know enough about anti trust law to do any more than bring up that point. There is also the issue of Apple being the only distribution point for apps (unless users jailbreak and "void" their product warranty) and their refusing to distribute apps unless the apps follow this 30% subscription model. The problem with that argument is that Apple only controls iphones and that does not create any sort of monopoly (as there are many iphone alternatives). But once you get an iphone you are basically locked in for two years so maybe that changes things. I don't know enough about the anti trust laws, but it is definitely an interesting situation.

Edit for full disclosure: I typed this response out on my iPad.

 

[TheForce]

its akin to refusing to allow the product's creator from putting a card in the box advertising their other products with a list of establishments where they can be purchased (not just the retailer where the original product was purchased). Those inserts are very common, and brick and mortar retailers have no control over them. I think this is a more accurate analogy.

OK, I agree with your initial assertion that there is a difference but it still would irritate me as a retailer if my suppliers of products hid ads for my competitors inside the packaging. Personally, I have never witnessed this in any product I have purchased except magazines and newspapers. Maybe it's here where you are referencing. Buy a magazine on the shelf at Publix and it has a coupon for a product to shop at Albertsons? Is this the similarity you mean? Then the question is, does this violate a law to forbid such practice by your suppliers? Whether or not they have control seems questionable to me. Rather I believe they ( Brick & Morter) just never cared because it was too small to worry over. Thanks for your view explanation.

As for the anti-trust implications, demanding 30% and demanding that the product not be priced for less anywhere else might be perceived as a form of price fixing.

Yes but the way mfgs get around it is they avoid the coercion clause and just say "suggested" price. Then there is the unwritten rule in business that you never bite the hand that feeds you. In otherwords, you may be legally in your rights to charge anything you want when an end user enters your business as a mfg. but, you should not undercut the MSRP, rather allow the retailer to do all the discounting he chooses but give the retailer the comfort of knowing his purchase price is the same as his competitors and less than the end users. Obviously, in business this is never guaranteed as a supplier may offer specials and volume discounts, just that he has to make that offer to everyone under UCC.

Also, when a company makes a unique product that is highly desirable, patent law allows them a monopoly for a period of time. I was very pleased and agreed with the ruling that permitted users to jailbreak. Patents do not expand the patent owners' rights beyond the product itself nor does the patent force people to use the product in a particular way. Only if the product is NOT owned can the real owner control these things as the product is just leased or rented. This is also a blessing in disguise for Apple in that it keeps the iOS devices FROM being claimed monopolistic. Anti trust is not judged on the basis of greed or difficulty of use. This is what I see as the sole motivation behind Apple being accused of Anti-Trust in the 30% commission requirement to sell these subscriptions via itunes store. I say let the public decide and if the cost is too high, price will be lowered to prevent the business from eroding away.

The interesting thing about the 2 year lock-in you mentioned is that you'd have to prove that your use was significantly changed from what was contracted for by this itunes store change. Then you should be able to escape the contract or be allowed to be grandfathered in at older rates.

The Anti-trust rules and UCC are quite simple and most important, logical. Its when a liberal philosophy that some 3rd party or the government needs to set up specific rules for each individual case that it becomes confusing and complicated. ... as exampled earlier when it was declared that 10% is OK but 30% is greed and not OK. That's just personal opinion and should never be the guide to what's legal or not.
Also, not to forget that this issue is not just a criminal process but also may involve contract civil law. These victim companies may have a good case in contract law, but not criminal law.

 

[Frank Jr.]

Alright you two, play nice! (lol) Even I have shared my dissenting opinions concerning Apple over time. Heck Carol has even shown interest in an i1 which is an Android powered cell phone
click here

 

[diogen]

Talking about price, retail, markup and such: an interesting article
Why Nobody Can Match the iPad’s Price | Gadget Lab | Wired.com

Diogen.

 

[rockymtnhigh]

Apple's Subscription Policy is a Poison Apple - PCWorld

The big problem is that even subscribers who aren't using Apple products would be affected by price hikes. Services like MOG and Hulu Plus charge one price for access to all supported devices, so unless they start fragmenting their subscriptions -- a highly undesirable option, I think -- users of other platforms, such as Android, will feel the waves from Apple's ecosystem.

 

[TheForce]

Talking about price, retail, markup and such: an interesting article
Why Nobody Can Match the iPad’s Price | Gadget Lab | Wired.com

Diogen.

Excellent article! Brian Chen correctly analyzes more than others in his assessment of why Apple has such success.

 

[rockymtnhigh]

The Atlantic has a good piece on "Newspapers falling out of love with Apple on subscription policy"

Newspapers Fall Out of Love with Apple Over Subscription Policy - Earl J. Wilkinson - Technology - The Atlantic

 

[rockymtnhigh]

Well the New York times has announced its new digital access fees, effective March 28th, $20/month for tablet access, $15/month for smartphone access, $35/month for access for both.

Not only is this totally over-priced for digital access, and I hope, completely backfires for them, but I blame part of the inflated prices on the Apple itunes subscription policy, where Apple will take its large cut. Needless to say, I will be finding a new newspaper to read, and will limit myself to the "Top News" and will access full-text articles from Lexis and Westlaw when I need it.

 

[diogen]

Here is a nice commentary
New York Times paywall: wishful thinking or just crazy? - Boing Boing

I like the definition: 20 articles per month is "active usage", one article per day, weekends excluded.
I have a hard time to believe this can be made work in this format.

WSJ and FT both have same paywall, it is broken for a while and nobody cares.
Casual reader is thrown out, dedicated can read anything by paying nothing.
I think those two rely (in terms of $$$) mostly on corporate subscriptions.
Maybe NYT will try the same?

Or maybe Apple will finance them...

Diogen.

 

[Foxbat]

I have not seen any multimedia subscription app yet that would replace what is available for free over the Internet. I'd rather use Flipboard to aggregate available content.

People expect things like news to be free. I pay enough for satellite TV and the Internet already. If the price is low enough, I might cancel the physical paper for an e-version, but that's not available here yet.

 

[rockymtnhigh]

I have not seen any multimedia subscription app yet that would replace what is available for free over the Internet. I'd rather use Flipboard to aggregate available content.

People expect things like news to be free. I pay enough for satellite TV and the Internet already. If the price is low enough, I might cancel the physical paper for an e-version, but that's not available here yet.

I don't have a problem paying for NY Times (or other) content, but the price has to be fair. And for me, I'd say it should be around $10/month; definitely not $20 or $35. The Times is getting slammed on twitter by all sorts of people, and I have launched my own little protest with lots of @nytimes posts criticizing them.

 

[DodgerKing]

They are getting desperate. They are losing money, as are most print news orgs, and are trying to recoup the loss through online accounts. Charge too much and people will stop reading them all together and just get most of the news from other online sources

 

[rockymtnhigh]

They are getting desperate. They are losing money, as are most print news orgs, and are trying to recoup the loss through online accounts. Charge too much and people will stop reading them all together and just get most of the news from other online sources

Yup. I liked this post from Huffington Post, as a dig:

RT @ariannahuff: from now on, at @HuffingtonPost, the first 20 articles you view are free. of course, so are all the ones after that.

The Times should find more creative ways for advertising, rather than the inflated fees for digital access. This is not it.

 

[Foxbat]

Hmmm, I might need to eat some words here... I just re-subscribed to my automotive magazine, "Autoweek", for two years. Cost? $48, or $24/yr. Autoweek has an app on the iPad that is a one year subscription to their multimedia content for $4.99. Now, I doubt I could sell that to my significant other as a cost-savings (hmmm, spend $540 for an iPad with tax plus Autoweek App) but it makes me wonder how Apple handles subscriptions like that, where the App purchase IS the subscription.