Steve Jobs clarifies 'Subscription Gate' confusion with more confusion
Minimalist App-Store memo debated
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The increasingly convoluted morass of Apple's latest App Store Guidelines – notably whether software-as-a-service (SaaS) apps are now verboten in the sacred store – has prompted what may be a response from Steve Jobs himself.
"We created subscriptions for publishing apps, not SaaS apps. Sent from my iPhone," is how Jobs reportedly responded to an email requesting clarification of Apple's guidelines for iOS apps that offer subscriptions for SaaS apps.
Well, that's what a certain unnamed MacRumors reader claims – you can find that reader's full email to Jobs in MacRumors's report.
As with all of Jobs' purported email message, however – including his famous "Not that big of a deal" missive – there's no way to know whether the message is actually from The Man himself.
One MacRumors commenter, dcranston, is skeptical: "This Steve email strikes me as a fake," he writes. "It just doesn't seem likely Steve would use 'SaaS' in a sentence, particularly with that capitalization, and on an iPhone to boot (that tries to correct 'saas' to 'aaas')."
SaaS or aaas notwithstanding, what Box.net's chief executive and co-founder Aaron Levie dubbed "Subscription-Gate" in a post on his company blog is riling iOS developers.
As The Reg reported on Monday, developer Rich Ziade released an open letter to Apple after Cupertino's App Store police rejected his iOS app, Readability, which cleans web pages of their ads and animations, leaving only more-readable text.
What was particularly galling to Ziade was that Apple had lifted the open source page-cleaning code that Readability's parent, Arc90 Labs had developed, and baked it into the Mac version of Safari last Summer.
If you consider Readability a publisher, Apple's rejection makes sense – Cupertino's guidelines say that apps that offer content subscriptions must include an in-app purchasing (IAP) offer, from which Apple gets a 30 per cent cut. Readability's subscription fee is $5 per month, and their submitted iOS app didn't offer IAP.
But is Readability truly a publisher, or is it a service that simply allows you to choose to clean up a web page – one that you choose, not one that Readability publishes – for easier reading? If it's the latter, it can be argued that it's a SaaS app – and Steve Jobs may or may not have said that SaaS apps are okay.
Another iOS developer, Chris Leydon of social networking screenshot-sharer TinyGrab of the UK, has also weighed in on the controversy. "I'm sad to say that as of today we can no longer provide development support to iOS, officially, through the app store," he writes in a blog post that details how Apple's new restrictions make it impossible for his account-based service app to be included in the App Store. "Until Apple loosen up on their restrictions we're ceasing all active development on TinyGrab for iPhone."
Readability's Ziade had said of Apple's restriction: "We believe that [Apple's] new policy smacks of greed." Leydon also uses the g-word: "Apple’s new greedy model doesn’t just affect the developers of applications, it also has a horrible adverse effect on end users."
The SaaS-or-no-SaaS conundrum has other developers in a bind, as well – think of the companies that create iOS apps such as Dropbox, Evernote, Salesforce, and Box.net, for example. If the purported Jobsian email is real, perhaps they have nothing to worry about. If not, section 11.2 of the App Store Review Guidelines, as quoted by Ziade, may give them pause: "Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected."
"Services" sounds quite a bit like, well, "service" – such as in Software-as-a...
Box.net's Levie talked about some of the aspects of the subscription restrictions in his blog post. After suggesting that IAPs make it comfortably easy for publishers to sell subscriptions, he adds: "That said, Apple rolled this out the wrong way. Apple has been unclear, as far as I can tell, about the who, what, when, and why of this move."
Levie – and the rest of the iOS ecosystem – want some clarity from Apple about what will and will not be kosher in the iOS App Store. "This could have a dramatic effect on our development process, the next rev of our product, and more," he writes.
One possibly real or possibly fake email from Steve Jobs is not sufficient evidence upon which to build a business plan. And Apple, as is their time-honored tradition, did not respond to our request for clarification. ®
COMMENTS
Never ascribe to malice...
...that which is adequately explained by incompetence.
Quick summary
Apple isn't just demanding 30% for new business -- the subscription model is supposed to be an ongoing 30% for renewals.
Consider that an average magazine costs about £5 in a newsagent. The same magazine is often about half price when delivered as part of a subscription. The subscription is advertised in the magazine that you buy in the newsagent.
Now, the in-app purchasing guideline say that:
a) You're not allowed to offer the same service cheaper elsewhere (so that 30% comes out of your bottom line)
b) You're not allowed to encourage users to shift to using alternative subscription methods.
If Apple is a retailer, it's like telling magazines that subscriptions have to be the same as the cover price, and don't publish ads for your own subscriptions in the mag.
But in the world of IAP, Apple is *not* a retailer. The purchaser doesn't go to Apple real-estate, but simply connects to an Apple payment system. Visa, Paypal, Western Union, whoever... no other legitimate company demands such a high cut on what is essentially a cash transfer. *That's* the 1-2% comparitor: transaction handling fees.
Apple's problem is that they're not demanding cash when they deliver the app. If they made a distinction between truly-free apps (hobbyist produced vanity publishing) and free-with-strings-attached apps (including both commercially-sponsored advertising apps and free clients for subscription-based services), then they could charge a delivery cost for the latter, and that would be all fair and good.
But right now, Apple are happily giving away free ring binders and demanding a 30% cut of all paper that goes into it at a later date.
did Steve consult the legal department?
Maybe there is confusion because Steve consulted with the Apple lawyers and they told Steve the new pollicy is illegal.
Why would the new policy be illegal?
I can explain just as the Apple lawyers explained to Steve.
Why is Apple's Subscription policy illegal?
All you have to do is understand why Apple adopted the policy.
It was designed to preclude competition.
1.alternative music services can not possibly afford to pay the 30% cut demanded by Apple. That precludes them from servicing Apple customers. They may not even know alternative services exist. Monopoly to iTunes.
2.all alternative sources for media must charge the same high price as by Apple. That means that Apple is assured of always having the lowest or best price for all media on Apple products. In other words, the only way to compete with Apple on price is to not make such media available to Apple users. Again, monopoly to Apple.
Apple consumers remain ignorant to the both the high prices they are being charged and the availability of alternative services provided by Apple.
Nothing is more antitrust than that. Preclude the competition completely or prevent them from offering any better price or terms, etc. Every company in the industry would love to pull that off if they could.
And only those companies having substantial monopoly power can do it. Some of that power comes from iTunes and its dominance in the marketplace. Dominance insured by making sure alternative services do not appear on Apple. And some of that power comes from iPhones and iPads. Currently iPhones have alternatives in the marketplace. But, no iPads. At least not yet. So Apple thinks it is essential to get media companies signed up now before those Android tablets get established in the marketplace. Once in place, some media companies will stay (as opposed to drop services to Apple customers).
The policy is designed to preclude alternatives and to keep prices high for media services.
And, worse yet, the high Apple prices will affect even those customers who do not have Apple products. If media suppliers can not sell for less through their own means or through other means, even Amazon, Google or others would have to charge the higher prices caused by the 30% tap by Apple. Trying to force media companies to charge high prices keep Apple competitive even though it insists upon higher prices or a big fat percentage for what amounts to a simple processing service. Apple does nothing but transact the business for its cut of the media pie. No advertising. No promotion. No kind of guarantee. No stocking of merchandise. No even serving up the media. Media companies have to do everything they do know on their own services regardless how customers are signed up. Apple just wants to force media suppliers to pay them 30% for essentially nothing. Okay, they host the small app that allows the customer to subscribe. And they process the payment. Nothing else.
And due to the restrictions they want to impose upon everyone else, Apple customers remain blind to the high prices they are being charged for media. Lower prices can not be offered anywhere or anyhow or Apple customers can not sign up for the media via Apple. So Apple customers are kept blind and ignorant.
Google has said they will only charge 10% and they will not restrict media suppliers outside of the Google system. 10% may still be too high but at least it not an attempt by Google to preclude competition among Apple customers and causing higher prices for everyone from any vendor who chooses to be placed on Apple.
Consumers have a right to alternative sources of information, media or what have you. And they have a right to be free of costs levied by a monopolist. Or, any company that refuses to give their own customers a competitive price. A high price everywhere is not competitive. Competition has been eliminated. Or, at least that is what Apple wants to impose upon Apple customers.
Nothing is more harmful to your own customers. Keep the prices high and restrict availability of alternatives sources. And take a 30% cut for doing almost nothing at all.
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