In-app Subs: Is Apple being greedy or deserving?
Apple's new subscription strategy for newspapers and magazines is causing a lot of hurt in the publishing world–especially here in Europe if reports are to be believed. Already, before the latest announcement, we have had rumblings from the book-publishing world. When Apple rejected Sony's reader application the battle lines were drawn. Apple insisted on in-app purchase which would bring them a 30% commission; the Sony app didn't play the game because it took prospective purchasers direct to the Sony Bookstore (just like the Kindle app, dare I mention?).
My first thought when I read about the Sony decision was that it was unfair to the book publishers and to readers; I feared for the future of my Kindle library if I were ever prevented from buying and reading books on the iPhone.
The position of Amazon and the Kindle app remains unclear, but there has been a general consensus that Amazon would never pay Apple a fee when they have been used to pocketing the full retail price. Nevertheless, it is difficult to see how Apple can say no to Sony when they continue to say yes to Amazon. Apple are in a strong position and I wouldn't be at all surprised if they do try to change the rules for the Kindle apps.
Can Amazon afford to lose iOS sales?
All this said, it isn't too difficult to understand Apple's position. They are providing a complex infrastructure and have a captive database of over 100 million credit cards. In normal circumstances any publisher would kill to get a slice of that action. Why should Apple provide the platform and yet allow third parties to trade without paying a fee? It's a bit like Harrods allowing a designer outlet to set up shop inside the store without paying a penny for the privilege of the Harrods name or the footfall it brings.
Amazon must be doing exceptionally well from its sales through the Kindle apps for iOS and I am sure they would be very unhappy to lose access to such a lucrative market. Who knows what percentage of total Kindle book sales are down to the iOS platform? I suspect it is a very high proportion–and certainly not one that Amazon would voluntarily disclose. Frankly, I doubt that Amazon could afford to walk away from the AppStore.
While it is easy to accuse Apple of greed, it's also perfectly easy to understand why Cupertino should want a slice of the action.
Source material: TechCrunch
See also Apple subscription service could see competition investigation (Telegraph) and this on Blogkindle.com