Tuesday, February 15, 2011

Apple's new subscription model.

I'm seeing a lot of reports on Apple's new subscription model.  Providers that provide content that is purchased outside the app store now has to provide a 'in app purchase' to get that material, costing 30%.   This is a killer, move on Apple's part, and if they enforce it you can say goodbye to Kindle, Nook, Netflix, etc...  The companies can't afford to take this cut.

With the agency model for ebooks, 5 out of 6 of the big publishers in the US now set their prices for their ebooks.  When Amazon sells one of these ebooks, it gets 30% of the list price, and the publisher gets 70% of the list price.  By the contract Amazon can NOT change this price.

If they were to make this available as an in-app purchase, then Apple would get 30%, the publisher would get 70%, and Amazon would get nothing.  Obviously Amazon will not go for this.

I wonder if Apple is attempting to push all other ebook providers off the App Store, or if it is just rattling cages.   If they do push all other ebook providers off, then I might have to reconsider using the Apple Ecosystem.   I have NO desire to use iBooks, and will never use it.   It ties me to one device, and Apple has just shown how unwise that is.

This seems like a foolish move now that serious iPhone contenders are on the horizon, between Android, and now Windows 7 (with the Nokia deal), IOS could have some troubles.  I would rather be using the Windows 7 toolset instead of IOS, however the market is not currently there.

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