Wednesday, February 16, 2011

Rhapsody: Apple has gone too far

We've been following the latest Apple, Inc. story, regarding content sold through apps on the various iOS devices (iPhone, iPad, etc.) If you haven't heard, Apple just changed their standard agreements to say that any vendor that delivers paid content (subscriptions, books, music, videos, etc.) through an app, now must remove any link to an outside purchase site for the content (usually their own website) inside the app, and instead put in a link to subscribe or purchase that content through the new Apple Subscription Store. They can still sell the content through their own site, but can no longer have anything but a link to Apple's store for that purchase inside the app.

Sounds fairly innocuous. So what's the kicker? Thirty percent of the gross sell-price goes directly to Apple if something is sold through their store. And the other kicker? Vendors must charge the same price for the content, whether it's sold through Apple or through their own site. No marking up the content in the Apple store to make up for Apple's 'take'. Keep in mind, most of these vendors make less than 30% margin on content sales in the first place. And if the only link in the app to buy content is to Apple's store, where do you think the bulk of purchases will be made? This is an untenable business model for most, regardless of the popularity of the iOS devices.

You can imagine that vendors such as the New York Times,, and others have a bit of a problem with this. One of them, Rhapsody, has finally had enough. They're pulling their content from the iOS devices unless Apple changes the policy. Presumably others will follow in short order. With Android breathing down Apple's throat in both smartphone and tablet form, I can't see how this policy can stand. Apple is banking on their incredible market penetration to strong-arm content providers into knuckling under to this - I'm going to say it - highway robbery. I think the marketing wizards at Apple are about to get a lesson in hubris.

Here's a link to an article on the Rhapsody challenge to Apple:

Rhapsody: Apple has gone too far


  1. I love it. I own an HTC Incredible Droid phone and I love their platform thoroughly. I think that all these "Look at how cool I am, I have am iphone" people are in for a surprise.

    I am also happier because I have a better phone than an iphone.

    To top it all off, AT&T is going to lose more customers over the loss of their exclusivity with the iphone. That rocks, and AT&T sucks!

    I know. My dialectic is intelligent and profound.

  2. Heh. Well, 'a friend', I'm glad you're happy with your purchase. I don't have any problem with the iPhone itself, personally. People I know who have had them give mixed reviews, but generally seem positive about them. Apple, however, seems to have morphed into the 'big brother' on the screen, instead of the lithe athlete who frees "the rest of us".