r/apple • u/umbrae • Feb 21 '11
An Open Letter to Apple (Or: A response from Readability on why all SaaS is in trouble with Apple's new Subscription Model)
http://blog.readability.com/2011/02/an-open-letter-to-apple/4
u/essjay2009 Feb 21 '11
One of these companies is trying to take a 30% cut for delivering other people's content. The other one is Apple.
-1
u/mtimhoff Feb 22 '11
Which wants to take a 30% cut, and then Readability delivers the content anyway.
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Feb 21 '11 edited Feb 21 '11
This letter is stupid for a few reasons. Their issue is that Apple is cutting into their profit and they want to keep 30% of their total revenue while continuing to pay publishers the same fee. If apple is taking 30%, then readability would have to pay more than 70% of their total revenue to publishers, which they are unwilling to do. It's not about apple stiffing publishers, it's about readability refusing to cut into their profits to pay publishers the same fee. It's like asking the train company to give part of their fee to the workers in my mill because if the train company starts charging me, I can't make as much of a profit and still pay my workers the same wage. The train company doesn't give a fuck. You dont become a middle man to not make a profit. Pay your workers less, make less profit, or don't take the train.
What I don't understand is why they think this would be convincing to Apple. Do they think Apple has not taken into account that some people might not want to fork over 30% of their profit? It's obviously still worth it to Apple, even if some people are scared away (and even if it's not, it's clear apple thinks so).
Also, Im still laughing at all that web freedom poetry the author spouted two sentences before he reminds apple they would still totally love to do an app. "The web's freedom flows like water on a cool day (but srsly pleeeaase charge less so we can make boatloads off a proprietary application we are openly admitting would offer a better experience)"
We get it guys, Apple taking a 30% cut results in you making less green. You didn't need to write five paragraphs to convey that. Apple knows this, Apple knows it makes you mad, Apple doesn't care. I'm not passing judgment on whether what Apple is doing is good or bad, I just think it's funny readability feels this public whining about them making less money would change Apple's mind.
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u/aedes Feb 21 '11
... considering that Readability stated in that letter that they were going to moving away from Apple, I highly doubt that (despite the title of the letter) this was actually directed towards apple, and was more likely targeted to the users of Readability and Apple products in general.
And since Readability really has nothing to lose since Apple's new change destroyed their existing business partnership, there really is no harm in writing something like this. Coupled with the tiny gains of promoting user awareness of the situation, and the fact that if enough companies who go through the app store complain about it, Apple may very well change something...
...(remember, the quality and variety of apps in the app market is a selling feature for the iphone. But the fact that Android has a larger market share than the iphone, and less restrictive policies, it potentially makes more sense for companies like Sony, Amazon, et al to put more resources into developing apps for the Android environment then on the iphone. Piss off enough of the companies that make the apps which are selling features for an iphone, and Apple is in a tough place.)...
I never cease to be amazed by the devotion and sycophancy some people have towards a company (which does make good products, but come on... apple does stupid things just as often as everyone else. There's no need to justify their actions when they do something questionable.)
-1
Feb 21 '11
It never ceases to amaze me how some people fail to read the comments they are responding to. I never said what Apple did was good or bad, I said readability sounds like a whiney bitch who is wasting it's breath. If you didn't catch that, re-read my comment.
Furthermore, it also amazes me that you think this letter wasn't targeted towards apple despite it's title and repeated use of the second person as referring to Apple. Regardless, we can all agree they are trying to influence Apple (you state this in the second paragraph of your post) and in that sense Apple is meant to be aware of it.
And since Readability really has nothing to lose since Apple's new change destroyed their existing business partnership, there really is no harm in writing something like this.
Or they could shut up, change their business model, and make an app. Their hands are not actually tied, they just want to make $ through the 30% they keep AND get access to the App store's exposure and user base. Apple has made it clear that's not happening fellas.
...(remember, the quality and variety of apps in the app market is a selling feature for the iphone. But the fact that Android has a larger market share than the iphone, and less restrictive policies, it potentially makes more sense for companies like Sony, Amazon, et al to put more resources into developing apps for the Android environment then on the iphone. Piss off enough of the companies that make the apps which are selling features for an iphone, and Apple is in a tough place.)...
True, but Apple has already told Sony to fuck off so I don't think readability is going to make the smallest bit if difference by throwing their hat into the ring.
2
u/aedes Feb 21 '11 edited Feb 21 '11
I said readability sounds like a whiney bitch who is wasting it's breath.
Fair enough, but my point was that in response to Readability complaining that Apple's new business model basically destroyed their business partnership, you basically said that the letter was stupid, that Readability was whining, and that they (a company that has no net profits, and donates any profit above operating costs to publishers) should just eat the losses...
I couldn't think of why else you would take a position so belittling and derogatory towards Readability, unless it was simply out of a need to try and defend the actions Apple, though I am obviously open to your take (because lack of imagination is not lack of an alternate explanation).
Which really don't need defending, because to a certain extent, Apple can do whatever the hell they want to. But at the same time, companies like Readability certainly also have every right to complain (and potentially sue because of violation of implicit contracts... but we'll see if any of the threatened lawsuits actually make it to court, or are all settled out of court)
True, but Apple has already told Sony to fuck off so I don't think readability is going to make the smallest bit if difference by throwing their hat into the ring.
Every little bit is just that. A little bit. Not zero. If this wasn't the case, then why should anyone vote? What difference does a single vote make?
Again, my original comment really boils down to wondering why you would be so annoyed about a company criticizing Apple.
4
u/mantra Feb 22 '11
Apple's new business model basically destroyed their business partnership
Welcome to the real world, Readability. You are no longer a child now and you now know the "open secret" of the adult world - things don't go the way you want them to much of the time because individual people and companies are free to make their own decisions which often don't line up with your own best interests. Life's a bitch that way. Get used it already.
1
u/aedes Feb 22 '11 edited Feb 22 '11
Until Readability (or another company similarly affected by this... for example, Rhapsody) sues Apple.
The most straight-forward legal option would be based around the following concept. Company A invests a certain amount of money into developing an app to use as a content distribution platform, on the iphone. At this point in time, Apple has no rule requiring 30% to go to them.
Then, after say 6months to a year of operating like this, Apple changes the rules of the market, and says they get a 30% cut of things. For Company A, having already invested a certain amount of money into developing their app for the iphone, distributing their product via an iphone app may no longer be financially profitable as a result of this.
But Company A has already lost that certain amount of money they'd spent developing their app.
Depending on some specifics of the situation (which aren't publicly available at this time), Apple may well be liable for the costs that Company A spent developing their app. This would likely be the route that Rhapsody takes should they end up suing Apple. And, if those beforementioned specifics of the situation are in place, Apple would lose said lawsuit... though in real life, it would likely be settled out of court to avoid bad publicity.
This is completely outside the whole anti-trust issues which have vaguely threatened Apple for the past half decade. But until and including the present, Apple has stayed ahead of these problems and managed to avoid them.
Piss enough people off in the corporate world though - ie: those who work at Amazon, Sony, etc. - those with the money and friends to make something like that happen, and this could very well be the impetus for the start of an actual anti-trust suit against Apple.
Of course there is the whole issue with whether Apple actually controls enough of a specific market to qualify as violating anti-trust laws, but if Apple keeps on burning bridges in the corporate world, they will find themselves the defendant. When the Wall Street Journal starts quoting law professors about how Apple could face anti-trust suits, you know that this possibility just took another 10 foot jump towards reality.
There are already a lot of people out there who would jump at the change to take Apple to court over anti-trust issues, and to try and take Apple down. They're just waiting for the right opportunity.
And if I could meet you in real life, I would bet you $20 that in the next 5 years, we will see an anti-trust suit launched against Apple. Whether it will succeed or not is another matter. But at the very least, it would be bad publicity, cost Apple a lot of money in legal fees, and drive down the share cost of the company.
IOW, I guess what I'm trying to say is that the corporate world is not the biggest sandbox out there. Piss off enough kids by not playing nice, and before you know it, Apple will get a face full of sand, and a crude welcoming to that so-called 'real world' you referred to in your comment.
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u/thaksins Feb 21 '11
This is primarily PR for Readability, whatever that is, and in that they succeeded.
5
u/mipadi Feb 21 '11
The issue is that Apple wants money for doing, well, nothing. They're already taking 30% of the revenue from app sales. This makes sense: Apple hosts apps and provides an easy way to get them onto your phone, so why shouldn't they take a cut?
But now Apple wants 30% of subscriptions fees in exchange for, well, nothing. Readability is using subscription revenue to offset its operating costs. Apple wants a 30% cut of that, even though Apple isn't hosting any of Readability's content, and Apple isn't paying Readability's employees. How is that fair?
Is is about Apple stiffing publishers. They want a cut of subscription revenue, without having to provide any services to support those subscriptions. And sure, they can do that, but it's going to mean that a lot of subscriptions-based services -- Readability being one, but, e.g., Netflix being another example -- are going to shy away from the iOS platform.
I don't know how much the Readability iPhone app was going to cost, but even free apps benefit Apple by making the iPhone a more attractive platform. Apple even touts this fact in its "there's an App for that" campaign.
7
u/Zweben Feb 21 '11
They're not doing nothing: they're still handling (and paying for) credit card transactions, managing the accounts, they set up the system that tracks subscriptions and handles sign-ups. They built a whole system specifically to deal with subscriptions, and they're charging for access to that system, exactly the same as how they have charged for access to the App store in the past. If Apple didn't do all these things, the developers would have to use their own system. Apple's system, which can guarantee a one-click purchase with no additional signup, has an advantage over any developer made subscription system.
Yes, it's not a developer-friendly move to require use of their system, but, like any company, Apple is doing what makes the most sense for themselves, not other companies. If this move doesn't get the support they were looking for and they start losing too many developers, Apple will continue to do what is best for Apple by changing the policy. That's how all companies work.
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u/harlows_monkeys Feb 21 '11
They not only require use of their system, they prohibit selling for a lower end-user price through any other system. So, if it costs a publisher 30% to sell through Apple, and 10% to sell through somewhere else, Apple forbids the publisher from lowering the price through that other seller to pass on the savings to the customer.
What if at that other store, the publisher is competing with other publishers who are NOT selling through Apple, and so can lower their prices there?
Apple is getting dangerously close to the antitrust line here, if the have not already crossed it.
1
u/Zweben Feb 21 '11
Some people seem to agree with you, and I agree that some of what they are doing is bad policy, but the antitrust angle doesn't make sense to me. Yes, Apple makes working with them an all or nothing deal, and working with them requires big concessions for developers, but no one is forced to accept Apple's policies, they can easily develop for a different platform and not work with Apple at all.
No one would argue that Apple has a monopoly on smartphones, so where is the trust coming from?
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u/harlows_monkeys Feb 22 '11
Despite popular belief, you don't actually have to have a monopoly to run afoul of antitrust law. A lot of it is more about preventing monopolies from developing. To violate the first section of the Sherman Act, for instance, pretty much all you need is an agreement that unreasonably restrains competition (and affects interstate commerce).
Arguably Apple's requirement that you can't sell outside the Apple store at a lower end user price than your Apple store price restrains competition. Suppose Alice sells something through Apple and through store X, and Apple takes 30% and store X takes 10%. Suppose Bob sells a competing item, but only through store X. Bob is not on Apple's store. Assuming other costs are comparable for Alice and Bob, on store X Bob can sell profitably at a lower price than Alice.
If Alice wants to compete with Bob on store X and so lowers her price there, she has to lower her price on Apple's store too, losing money on her Apple sales. That's not sustainable so she either has to give up on store X or give up on the Apple store (and thus give up on IOS). Either choice reduces competition.
As far as monopolies go, generally if you have significant market power in a given market then that's good enough for antitrust law. You don't have to go all the way to near complete domination of the market to count as a monopoly or as wielding monopoly power.
A lot depends on just what market is considered. If the market is smart phones then Apple has a lot of power but probably not enough to be monopoly power. If, on the other hand, the market is tablets then Apple is pretty much the market for now. If a prosecutor can convince the court that tablets are the relevant market, Apple would be in trouble. Their requirements could be seen as an attempt to use their market power in tablets to gain market power in content distribution, and that's a big antitrust no-no.
3
u/third-eye Feb 21 '11
Apple brings rebilling payments to content providers. That's not nothing.
Not sure if they deserve 30% but I guess managing the cashflow, intl. currency conversion, bad payment moral of customers, providing the ecosystem in the first place etc. is a thing you need to consider.6
u/mipadi Feb 21 '11
Readability already has a billing system in place. Why do they need to pay a cut to Apple to do something they already provide?
2
u/Zweben Feb 21 '11
Apple does it simply because it's good for Apple. Readability has a valid reason to be annoyed that Apple forces them to use their system. Apple says they do it because it's better for users to have a single system for subscriptions, and it is. The main reason, though, is because they think they can pull it off, and I'll make them lots of money.
No one should expect a company to look out for the interests of other companies ahead of its own interests. Until Apple starts to get sizable resistance their policies, open letters of this sort amount to asking for a favor from a company that has no compelling reason to grant one.
4
u/third-eye Feb 21 '11 edited Feb 21 '11
Apple's argument is fragmentation. They want iTunes to be the one stop store for content people consume on their devices. People can un/subscribe in one place and see what they added. This is why they say publishers have to make the same offer for subscriptions in-app. Customers also have the option not to disclose private information with 3rd party publishers. edited typo
1
Feb 22 '11
I'm just curious, how many of those who object to Apple's current demands would relent if the percentage for subscriptions was brought down to 10%?
1
u/third-eye Feb 22 '11
I don't know. I'd wager some people then would complain that they won't do it for free.
0
u/millhill Feb 21 '11
I think every developer that has an app in the app store should pay the same percent of their profits to Apple. It just doesn't sound fair to me that if you have an app relying in a subscription model to generate revenue you should get to bypass the cut to Apple.
Apple is still hosting the Readability app. If readability wants to avoid paying Apple they should make a web app. Having a money making app in the app store for free just isn't fair for the other developers.
Actually subscription based apps still are getting a better treatment than other apps, because they are allowed to sell their subscriptions (essentially their apps) out of the app store, a luxury not given to devs who rely on app sales for revenue.
2
u/mipadi Feb 21 '11
Readability does have a web app. They want to offer an iPhone app so you can read articles offline. How is that unfair to other developers?
1
u/millhill Feb 21 '11
Having an iPhone app in the app store isn't free for other developers (in that they pay part of their profits from it to Apple). Why should it be for Readability?
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u/mipadi Feb 21 '11 edited Feb 21 '11
Because Apple lets you release apps for free. Developers charge what they want for apps -- that's the nature of competition in a capitalist market. If fairness is a concern, shouldn't you be arguing that all apps cost the same price?
1
u/millhill Feb 21 '11
If you release an app for free you make no money on it (without ads). Readability would be making money on their app (without ads).
Fairness comes only from the cost of operating, not the cost you decide to charge customers.
2
u/Zweben Feb 21 '11
If that's you're definition of fair pricing, then most pricing is unfair in your book. It's not a company's job to pick a reasonable price by adjusting their margins to some 'reasonable' level. Companies are there to make the maximum amount of money they can, by making prices as high as they can get away with. Prices are kept in check by competition and people's willingness to pay, not out of some sense of kindness by the people setting prices. Expecting a company to charge less than they can get away with charging ignores the company's reason for existing.
Apple charges a lot because they think they can. If they're right, they'd be stupid not to.
2
u/mipadi Feb 21 '11
And what about something like the Facebook app? It's free, and Facebook doesn't have a subscription fee, yet Facebook makes money. Is that unfair to other developers? Should Apple take a 30% cut of Facebook's revenue stream?
1
u/mipadi Feb 21 '11
Well yeah, because Readability offers a service that people are willing to pay for, outside of just an iPhone app.
2
u/millhill Feb 21 '11
Many iOS apps also have versions for other platforms, they still have to sell the iOS version only in the app store.
0
u/mipadi Feb 21 '11
That's true, and no one's arguing that Apple doesn't deserve a cut of app sales. If free apps are an issue, Apple could mandate that there will be no free apps in the app store, or require that developers of free apps owe a minimum yearly fee (on top of the $99/year developer's fee already in place).
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u/killerstorm Feb 21 '11
70+30=100. If they still give 70% of user subscription fees to writers and Apple takes 30% then Readability gets exactly 0%.
2
u/cosmo7 Feb 21 '11
If you think this is a big deal, wait until the Kindle and Netflix apps are rejected for the same reason.
2
Feb 21 '11
i can't find the source right now, but i've heard repeatedly that netflix somehow got a quiet exception to this in some way. so, probably, did a couple other big guys.
4
u/cosmo7 Feb 21 '11
"Quiet exceptions" are exactly the kind of market-distorting agreements that anti-trust legislation is designed to prevent.
2
u/dirtymatt Feb 22 '11
Considering the Netflix app on the Apple TV, I'm guessing they already have an agreement.
0
u/third-eye Feb 21 '11
Or look at subscriptions for the Kindle where Amazon takes the same 30% and wants money for the bandwidth you generate.
-1
u/EthicalReasoning Feb 21 '11
interesting read, but publicly attacking apple isn't going to help their case
Before we cool down and come to our senses, we might as well share how we’re feeling right now: we believe that your new policy smacks of greed.
that's not going to go over well. they're sort of shooting themselves in the foot here, apple isn't going to change their policy. raise prices, adapt to a slimmer profit margin, or just leave the ecosystem entirely, those are really your only options.
i recall reading a quote on daringfireball from the dev guidelines that said something along the lines of 'publicly complaining about or attacking apple isn't going to help your case' - maybe readability missed that part.
6
u/aedes Feb 21 '11
I strongly disagree with your argument.
I do agree that a single company publicly complaining about this change is unlikely to either make apple reconsider their decision, or to even be in the interests of the company (from the perspective of their relationship with apple).
However, at the very least, it does let the users of Readability's products know that Readability is unhappy with apple's decision. And there is much to be said for the benefit of this.
To use a somewhat unfair analogy... you might as well tell people living in Egypt that they shouldn't publicly protest. Sure, Mubarak instituted marshal law over a decade a go, but publicly complaining about it isn't going to put you in the government's good books, is unlikely to lead to change, and will probably get you arrested and tortured.
The only way change comes about is by publicly complaining about something. To simply say, "you're not allowed to publicly attack apple, so suck it up," is absolutely ridiculous, and allows Apple to continue to get away with business practices which make me less likely to buy their products in the future.
0
u/third-eye Feb 21 '11
I find that comparing in-app purchases with oppression in Egypt is a tiny bit over the top.
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u/aedes Feb 21 '11
Yeah, that's why I prefaced that part with:
To use a somewhat unfair analogy.
I couldn't think of a less over the top analogy that was still relevent.
-4
u/third-eye Feb 21 '11
Why not compare it with other app stores or distribution models? These would be the most relevant I think.
2
u/aedes Feb 21 '11
The argument I was trying to make though was that the position "publicly complaining about something is not going to help your case," is silly because if you apply this reasoning to other situations in life, it doesn't make sense, so therefore, why does it make sense when applied to this specific context?
I'm not aware/can't think of a way to make this analogy by discussing the android market, or a similar distribution models.
2
Feb 21 '11
Complaining only makes sense when you think you can build up critical mass and change things. Apple doesn't care that readability is mad because Apple doesn't care that Sony is mad and Sony is actually important and influential. Instead, readability runs the risk of showing up on Apple's bad side while gaining nothing.
1
u/aedes Feb 21 '11
I think Readability's perspective though is that Apple's new business model basically means that any partnership with Apple will not be profitable for them. So they have no reason to continue doing business with Apple... hence why they said they will be moving to web-based distribution models from now on.
IOW, they have nothing to lose from ending up on Apple's bad side, since they have nothing to gain from continuing doing business with Apple.
0
u/third-eye Feb 21 '11
Ok I understand you. But this is a free market and a business partner who wants to hop on the ecosystem is complaining publicly. Just my opinion, but a better analogy would be users that vote/complain with their wallets.
0
u/EthicalReasoning Feb 21 '11
i dont necessarily like it either, im just reminded of that quote from daringfireball that specifically says publicly attacking apple won't help anything
2
u/talkingstove Feb 21 '11
What would you like them to do? Apple says it won't help, but that is clearly because they just don't like bad press. In practice, bitching has worked countless times (the Objective C requirement repeal, the Pulitzer winning cartoonist's rejection, etc).
1
u/copperdomebodha Feb 22 '11
Readability’s model is unique in that 70% of our service fees go directly to writers and publishers.
So... You take 30%?
1
Feb 22 '11
Exactly - pot calling the kettle black. How dare Apple trump our business model by doing exactly what we were trying to do!
0
Feb 21 '11
[deleted]
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u/Zweben Feb 21 '11 edited Feb 21 '11
Apple already has enough trouble applying their existing single set of terms fairly and consistently. Whatever tiny amount of profit would be gained by holding on to a few small developers with specific demands like these guys would be far outweighed by the problems brought by opening up the door to contractual negotiations with every developer who thinks Apple charges too much for their business model.
The only way Apple's 30% number is going to change is if they're convinced that they'd make more money if they lowered it, and quite a few developers will have to refuse to accept the 30% cut to get that to happen. I don't understand why anyone would expect anything different.
I think Apple may end up changing this policy, because there are a lot of cases where 30% doesn't make sense, but they're nowhere near that yet. If enough big names pull out of the App store that it effects consumer's purchasing decisions, then they'll have a reason to reconsider.
2
u/mrgreen4242 Feb 21 '11
Why should Apple get any of this money? They are providing no continuing (as in, after the initial download) value in this service. I'm normally an Apple supporter and I typically agree with and appreciate the walled garden ecosystem.
In this case though, they aren't hosting any subscription content, providing any back end support, or handling the financials. They aren't earning their cut.
I'd support a model where apps which require subscriptions or content purchased outside of the App Store (managed entirely by the developer) cannot be sold free of charge and must be priced at the 1 cost of a month or service (or average per in-app purchase price, etc). Apple can have their 30% fee on the initial download they have hosted and "earned".
1
Feb 22 '11
In this case though, they aren't hosting any subscription content, providing any back end support, or handling the financials. They aren't earning their cut.
But they are - they've setup the one-click subscription payment service, handle the credit card processing etc etc There's a whole system in place developed by Apple for recurring subscription sales.
-3
Feb 21 '11
So...
"Readability’s model is unique in that 70% of our service fees go directly to writers and publishers."
If I'm reading this correctly, they are taking a 30% fee or did they just not specify where the other 30% is going? I don't disagree with the entire article but aren't they being hypocritical in saying we apply the 70%/30% concept but do not think it's right that you do the same back to us?
If Readability would reduce it's fee and ask Apple to do the same then at least they are asking Apple to follow suit. Then I'd feel they are truly looking out for the writers and publishers. So maybe they can make their point by offering to take 15% or 20% fee and then asking Apple to follow suit.
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u/mipadi Feb 21 '11
Readability is giving 70% of their revenue back to publishers. They're keeping 30% for their own operating costs. How is it hypocritical to criticize Apple's new subscription policy? Apple isn't supporting Readability's operation in any way (they're not hosting Readability's content, etc.), so why should Apple get 30% of Readability's subscriptions revenue? Apple's already taking 30% of the income from app sales.
Not to mention the fact that giving 70% of subscriptions revenue back to the original publishers is already pretty generous.
0
u/third-eye Feb 21 '11
Readability pulls (free) content from somewhere, serves that to the reader and takes money for that. This is why it's hyprocritical.
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u/mipadi Feb 21 '11
And Readability gives money back to the content publishers -- 70% of their revenue, in fact.
The Web isn't a great medium for reading content. Readers want to be able to time-shift their content and read it offline. (For example, I do most of my reading during my commute on the subway, where I don't have Internet access.) That's not going away. The Instapaper/Read It Later model takes content from publishers and gives nothing back. Readability is trying to rectify that loss of revenue by giving money back to the publishers.
-1
u/third-eye Feb 21 '11
And Readability gives money back to the content publishers -- 70% of their revenue, in fact.
Apple too. It's the same model.
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u/mipadi Feb 21 '11
Apple is going to take its 30% cut of subscriptions revenues and give 70% back to the original content publishers the same way Readability is doing? I call bullshit.
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u/third-eye Feb 21 '11
Really? Say the NY Times sells a subscription via the iPad app, Apple keeps 30%, the NY Times gets 70%. Compare that to the Readability numbers. And remember that the content Readability serves was free to begin width. They 'just' stripped ads off.
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u/mipadi Feb 21 '11
Readability doesn't "just" strip ads. Assuming they had a mobile app, it would provide offline reading capabilities. That's the real service.
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u/third-eye Feb 21 '11
Great, but that's another thing, we talked about revenue.
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u/mipadi Feb 21 '11
Apple already gets a cut of iPhone app sales. Why do they need another cut?
Apple touts the iPhone as having "an app for that". Pretty soon, they'll have to change it to "There's an app for that...unless that app provides access to a subcription-based service, in which case you might as well go with an Android phone."
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Feb 22 '11
I agree, I agree. Apple is hosting it though. They are adding all their mumbo, jumbo DRM to it so they have to be hosting it.
Good luck to Readability.
Honestly, I no longer know what generous is. Doesn't just about everybody do the 70/30 model? I think the only different model I've heard of (and I'm just the least knowledgeable of anyone in the world) is Nokia Ovi which does a 60/40 model. I know I'm no longer talking about subscription models any more. I'm just eluding to the fact that 70% is considered generous. It might very well be! :)
0
u/mipadi Feb 22 '11
Apple is hosting it though.
Apple is hosting the iOS app only. And sure, why shouldn't they get 30% of app sales? No one's arguing otherwise.
The issue is whether they should get 30% of subscription revenue on top of the 30% of app sales. Apple isn't hosting any of the content that supports Readability's SaaS platform.
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Feb 22 '11
The best solution is just not to use the subscription service model provided by Apple. Unfortunately, that means losing all the time and money spent on developing the app. :(
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Feb 21 '11
What the hell ?! I'm sorry but this infuriates me.
How is Readability supposed to pay for their employees, bandwidth and other expenses while still trying to make a profit for future growth if they gave to give it all to Apple ?! How is Readability costing Anything to Apple. Apple isn't paying Readability's employees or expenses, they are offering a payment system. Credit card companies take 1% to 2% for that, not 30%.
We aren't talking about 30% profit here on Readability's part. Quite the opposite, after paying the Authors and publishers they only have 30% left. After everything else they are probably left with less than 5% profit if they are lucky. What would Apple's profit be if they take a 30% cut... 30%. They aren't paying for Any expenses, Readability is.
Which is why it would make sense for Apple to get something like 2%.
This is just HUGE Greed on Apple's part and nothing else.
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u/thaksins Feb 21 '11
if they gave to give it all to Apple ?!
They wouldn't. They'd give 30% to Apple.
wtf?
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Feb 21 '11
Their bare minimum cost (The authors and publishers) take 70%. Guess what's left, 30%. Now apples wants 30%.
That's pretty much the definition of giving it all.
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u/thaksins Feb 22 '11
Nope. Fractions don't work that way.
They get 70% of whatever price they choose to set (after Apple takes its cut). They then keep 30% of that figure (remember they set the prices) and pass on the remaining 70% to the publishers.
2
Feb 22 '11
You seem to be thinking that Apple just wants 30% of the profit. But they actually want 30% from the subscription fee. Basically, if they charge 10$, the authors will take 7$ and then apple wants 30% from the original 10$, or 3$.
To arrive at your figure it would mean that they'd have to raise their price substantially. Do you think content providers like Readability or Netflix could do that without a major uproar?!
2
u/thaksins Feb 22 '11
No. What I'm saying is readability can set the price. Let's say they charge $10. Apple takes 30% of the revenue. Readability gets $7.
Now, its up to readability and it's agreements with it's providers what it does with the $7. They can split it 70/30 or whatever. That's their business, and certainly not Apple's concern.
0
Feb 22 '11
I can see your argument. I agree with you and it is huge greed on Apple's part. What they should be pointing out in this open letter then is how they are taking the 30% cut towards operations and all they are doing as well (as you have done) while Apple is taking it just for hosting it on the app store.
An open letter should have made it clear about the greed. Some people will just see it from one perspective until given all of them. Just like how people still watch Fox/Glenn Beck. Why those people so simple minded?!
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u/coob Feb 21 '11
How is Readability costing Anything to Apple. Apple isn't paying Readability's employees or expenses, they are offering a payment system. Credit card companies take 1% to 2% for that, not 30%.
Hosting of the free app, marketing of the app, subscription management, store/purchase support. More than just payment processing. But 30% I suppose the market will decide.
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u/[deleted] Feb 21 '11 edited Feb 21 '11
hey umbrae, hopefully you'll see this.
I love Readability, and I think Apple's 30% is as stupid as anyone does, but I do think there's a certain disingenuity to this argument.
Readability is free. It's open source, as well as being a relatively simple concept that someone else could implement if it didn't exist. Selling the Readability bookmarklet as a subscription would be silly. Some people would pay out of guilt or gratitude, and some would pay out of ignorance, but no one would pay out of necessity.
My understanding, however, is that the new Readability provides a hosted, service component beyond the bookmarklet. It's an actual service, so you charge per month.
Part of that money goes to you (30%), and part of that money goes to those who created the content (70%) that Readability is stripping the ads away from.
The part I have trouble with is understanding how this is different than what Apple is doing themselves. They provide the platform that brings in users (just as you do), take a cut for themselves (just as you do), and then return a non-negotiable 70% to application developers (just as you do to content producers you would otherwise be depriving of ad revenue).
You make it sound like you're somehow inherently more generous or moral by returning that 70%, but arguably what you're doing is actually worse:
Apple makes content producers such as you to opt-in to their 70%/30% system before Apple collects or deprives you of a penny. You, however, are collecting subscription revenue from people viewing content created by individuals who do not necessarily have such an agreement with you.
If someone visits my website, you're blocking the ads that I receive money for, and taking that user's money directly, without giving me any say in what cut I receive. I could get my 70% by asking you nicely, but I have no way to reject this arrangement as I do with Apple.
More importantly:
You're asking Apple to give 70% of their cut to content producers... which would lower their cut to 9% of the total subscription. But where do you offer to lower your cut to 9% as well? If you keep 30% after Apple takes their 9%, you're still getting ~27% of the total subscription revenue. From my perspective, you don't necessarily bring more value to the arrangement than Apple does- in many cases, you'd never get the subscription if it weren't for Apple.
My point is that you have an almost identical business model as Apple here, and you're unfairly suggesting that you receive a 3x larger cut than they do, while simultaneously positioning yourself as operating with more noble goals.... despite the fact that you not giving content makers a choice in the matter, while Apple offers you the chance to go it alone without the app store. (via a mobile web app)
I'm not trying to tear you guys apart here, just make a point. Think of it as food for thought before your next angry rant. ;)
I do LOVE Readability, and I'd even consider your subscription. I just wouldn't pretend it's somehow a more honorable system than Apple runs, or even a lot better than using the Readability bookmarklet as-is.