Apple app store: Changes roil users
Apple begins charging 30 percent tax at its app store, which has some app publishers angry.
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“Any publisher would have to admit that 30 percent to acquire a subscription is a great deal,” said Clayton. “Look at what they have to go through now to do that: They buy a list, send junk mail, call the person on the phone, ask for the credit card and then call again when they don’t pay the bill.”Skip to next paragraph
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While newspapers and magazines get most of the play when it comes to the iPad, Apple's subscription plan extends to all online content. This includes movies, music services, games and e-books.
And this is where the first shots are being fired.
Rhapsody, the largest digital music subscription service in the United States, called the new rules foriPhone and iPad app subscriptions "economically untenable" and said it will team up with with other music services to consider options, possibly including legal action against Apple.
“Our philosophy is simple too,” Jon Irwin, Rhapsody’s president, said in response to Jobs’ statement. “An Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable."
Irwin said Rhapsody could not continue to offer their service through the iTunes store if subjected to Apple’s 30 percent monthly fee versus a typical 2.5 percent credit card fee.
While this certainly may be the case, Clayton argues the balance of power is shifting back to people who actually create content, and away from those who only distribute it.
“The people wringing their hands aren't adding direct value to the content,” said Clayton. “Of course, people who built distribution networks are upset.”
Others might not see it in such black-and-white terms. A Sony executive told Forbes that Apple is “holding publishers at ransom,” while the Online Publishers Association, whose members include Time, Bloomberg, Conde Nast and numerous other large media outlets, suggested the plan lacks flexibility that will allow them to serve all their customers.
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