Apple’s Big Subscription Bet: Brilliant, Brazen, Or Batsh*t Crazy?

Imagine if the PC revolution had unfolded this way. It's pretty crazy to think about.<p>Essentially, Apple is acting as the big box retailer, but without any other big box retailers, they set their margins and the software vendor just has to live with them. No real competition.<p>Not sure how I actually feel about this. On one hand, Apple is creating an ecosystem, and all they're asking for is $99 to distribute apps. Much better terms than $x / seat for MS Studio and the like. But, they're going to insert themselves at every aspect of the chain when they don't necessarily have to. It gives me an uneasy feeling, but I think the company is optimizing for business instead of goodwill.

I don't know if they will be successful in their endeavors but if Apple follows through, there will be a backlash.<p>Take Netflix, for example. Does it make sense to provide in-app subscriptions for 30% discounted distributor rate ($8 * 70% = $5.60) when that same account can be used for Roku, etc?<p>No. What will happen is that all these service providers will make an Apple subscription (which has separate features) that won't work with other devices.<p>Balkanization of content channels... this is not consumer friendly.

There is an elephant in the room here, and it's why so many content providers seem just so annoyed.<p>Regardless of whether this is 'fair' for Apple to do or not, many content providers simply /can't/ give Apple (or any third party) 30% of their revenue - even just for for subscriptions sold through iOS apps - and still make a profit. There's just not enough margin in what they're selling. Since Apple is demanding that the prices in-app be the same as outside the app, these providers have two choices: raise prices for everyone to subsidise the iOS-purchased subscriptions, or don't offer an iOS app at all.<p>This is a big change to the status quo.

With $60 billion in cash, changing the terms of service for developers is the most market disruptive idea they had for the iOS ecosystem? In the year of uninspired Apple announcements since the iPad, this may be the most uninspired of all.

And Jobs has just stepped over the line of brilliance to madness. It is this same God-complex that ultimately led to his original ouster from Apple. Jobs really thinks that 30% of the revenue in the mobile world belongs to Apple??? I see a HUGE opportunity for Android here (and I'm an Apple fan)!

This is a huge game of chicken with Amazon.<p>I could see a scenario where Amazon decides to let the kindle app be pulled, and throws their weight around with the publishers in order to damage iBooks.

The question here for the publishers is whether or not this will increase their sales, or just move them about.<p>If they have all the subscribers they were going to get anyway, AND some new ones thank to Apple, they've made more money and they fact that Apple is taking a cut won't bother them; 70% of more money is a lot better than no more money. It costs them effectively nothing to have more subscribers, so as long as their Apple-based subscribers aren't cannibalising their existing subscriber base, their profits go up.

I've asked this before, but what is there to keep Netflix from creating an iPhone version of their site and directing users there? This would let them cut Apple out of the equation completely, and still provide the same functionality, unless there's issues with playing videos on the iPhone that I am not aware of.

I was wondering when there were going to roll this out ...

don't even post articles from MG here. Too bias and too useless.

Why the critical backlash? The App Store is the exclusive way to sell apps for iOS, and Apple takes a 30% cut. Now the subscription model is similar, except you can sign up outside the app as well, not paying anything.<p>I guess people don't like that Apple has full control of their platform, and they sometimes do things which benefit them. If you don't like it, don't buy an Apple product! Get something open or whatever.