Apple has finally clarified what it will demand of publishers that want to sell subscriptions through its iPhone and iPad app ecosystem. The demands are extortionate, and traditional publishers agreeing to them are crazy if not suicidal.
Here’s Apple’s official pronouncement. Key items:
Apple will permit publications to sell subscriptions from inside their apps. But look at what Apple then demands:
Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.
The arrogance of this is stunning. Consider, first, that publishers are not allowed to sell their content at a higher price inside the App Store even though Apple takes 30 percent of the money. And then consider that publishers are not allowed even to show their audiences, from inside the apps, how they can bypass Apple and get the subscription directly from the publishers themselves.
The second demand is in line with Apple’s current insistence that it can decide what content is allowed within news organizations’ apps. The cowardice they’ve shown in this arena has surely emboldened Apple to extend it in this anti-customer way.
None of this should surprise anyone who’s been watching Apple take firmer and firmer control of the iOS ecosystem, or who’s watched media companies compete for the right to be Apple’s pets. But it’s discouraging nonetheless.
The Apple deal will make more sense to startup publishers that want to avoid billing issues by leaving the back-end finances to Apple. Even they, however, should realize that they’re turning over their futures to a company that is not working in their interest in the long run.
What this should do is lead publishers, especially traditional ones, to speed up their development of HTML5 applications and apps for other operating systems like Android. But as the lemmings head for the cliff, I’m not holding my breath waiting for them to change course.
UPDATE: Ryan Carson pleads with people to “fight Apple’s subscription extortion.”