Last week Apple announced it would be beefing up its In-App Purchases system (the catchily named IAP API), introducing new rules that mandate all apps that sell additional content, services or subscriptions MUST use Apple’s system, and pay it a 30% cut for the privilege. The controversial move was aimed at simplification, and, Steve Jobs claimed, to reward Apple for bringing in a new subscriber through iOS – obviously the 30% purchase price cut and $99 per year iOS Developer Program membership just aren’t raking in enough cash.
On the very day of the announcement Rhapsody came forward to say they wouldn’t be adhering to the new rules, quite simply because their slender profit margins cannot absorb a 30% fee –
“The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30% monthly fee vs. a typical 2.5 per cent credit card fee.”
It was thought music services would feel the sting more profoundly than others due to the already-hefty charges they must pay to the music owners in order to be allowed to stream it. This has now seemingly been confirmed with Last.fm co-founder Richard Jones saying Apple has “fucked over” music subscription services (read the chatlogs here), in preparation for the launch of their own competing service which, of course, will not be subject to the 30% levy.
However it isn’t just music services being affected – Readability, an article bookmarking and reading service has announced that it will be abandoning the App Store subsequent to Apple rejecting their app on the grounds of it not correctly paying the ferryman. Readability say they will now be focusing on the web, as their business model – where 70% of their revenues go to the content’s creators – can also not survive a 30% bite being taken from it.
It’s also become apparent that Apple’s In-App Purchasing system will only support around 3,000 items in a store – this could prove mightily troublesome for vendors such as Amazon, whose Kindle book store boasts several million items.
Meanwhile regulators in the USA and Europe are allegedly looking into Apple’s new rules with many a beady eye, prompting many to speculate they could be ruled anticompetitive.
Apple has long been known for its bold and controversial ideas about how services can operate within the iTunes ecosystem, could this latest set of regulations be one step too far?
UPDATE: Screenshot sharing tool TinyGrab have now said they too will no longer appear on the iOS or Mac App Stores.
