Last week, Apple published new rules about software running on iPads, iPods, and iPhones. While Apple has always controlled what programs will run on these devices, the new rules say that if you have a program that is already approved, such as an e-book reader or music player, you must pay Apple a 30% tax, even if the customer buys source materials directly from the manufacturer.
For example, Amazon has a Kindle Reader program that runs inside of both the iPad and iPod. If I buy an e-book through my Windows-based computer directly from Amazon, it will be available on all my Kindle equipped devices (such as other computers or my Android phone). Under its new policy, Apple wants a 30% cut from Amazon if I try to read my new book on an iPad. This is just an example as Apple has not officially notified Amazon of this new policy. However, they did turn down an application from Sony for their e-reader software because the purchase of books did not go through Apple.
These new rules apply to music, magazines, newspapers, and books. Apple has always been accused of having a “walled garden” for applications, but now they have made that wall even higher. And they have put a noose around the neck of several music services in competition with Apple’s iTunes store.
As you will see from the last story here, this new policy has already peaked the interest of government anti-trust investigators. Personally, I hope Apple fails in this new policy and that companies boycott Apple for what they are trying to do. Your thoughts are always welcome. - JRC
How Apple will crush its competition with iTunes Online
Rhapsody. Napster. MOG. Rdio. What do these four music subscription services have in common? Each company survives on monthly subscription revenues. Each one has an iPhone/iPad app that is prominently featured on its home page. Each one offers a free trial that they hope you’ll love and that you’ll convert to a paid subscription when the trial runs out. And under Apple’s new subscription rules, each one will soon be forced to start paying 30% of its revenue for each of those easy, one-click subscriptions it gets through an app on an Apple device. In short, each of those four services has just been torpedoed by Apple. Each one is taking on water.
Apple's subscription plan: Time for an app work stoppage
In a nutshell, Apple wants a 30 percent cut of in-app purchases. If you are a publisher of movies or music this could be a big issue. First, companies like Rhapsody and Netflix pay content owners and then pay Apple another cut for the privilege of being in the App Store.
Apple's luxury tax should spark a showdown with publishers
Just as all of the big content providers were starting to get chummy with Apple and its media savior - the mighty iPad - ol’ Steve Jobs went and pulled a fast one on his new publisher buddies. He changed the rules of the game and hit them with a new revenue-sharing structure that essentially forces publishers who charge subscriptions outside of the app to either cough up a 30 percent tax on subscriptions purchased from inside the app or do business elsewhere.
Report: Apple's subscription plan draws antitrust scrutiny
U.S. antitrust investigators are examining the terms Apple placed this week on publishers wishing to sell digital subscriptions through the App Store, according to a Wall Street Journal report that cited people familiar with the matter. The Justice Department and Federal Trade Commission are interested in whether Apple is violating antitrust laws by routing customers through Apple's App Store and taking a 30 percent cut of each subscription, sources told the newspaper.
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