Apple recently made an extremely bold change to the rules of the app store, regarding paid subscriptions. The change was this: If a service charged a subscription fee outside of the app store, the service also had to offer the same subscription service inside the app store for the same (or better) price. The issue is that if a user subscribes to the service through the app or through iTunes, then Apple keeps 30%.
For major publications like the Wall Street Journal, Sports Illustrated, and other subscription magazines, demanding in-app subscriptions and taking 30% of the sale is fairly major. Also, Apple refuses to give any information about those subscribers, which is usually combined into generic demographics and used to attract advertisers.
Other subsequent changes to the rule seem to indicate that this will also apply to all in-app payments as well (such as the Kindle app), although Steve Jobs said in another pseudo-statement that this will not apply to SaaS apps, and will only apply to publishers. However, the line between “publisher” and SaaS is definitely blurry, as in the Netflix app which could easily be considered either.
The point is developers are confused. And frustrated. Apple’s app store already suffers from a severely ambiguous approval process (though it was getting better). Honestly, the latest subscription changes impact only a very small number of apps, but they aggravate past frustrations and create future uncertainty for the entire market. This reduces the confidence of small-time publishers the app market and reduces the incentive to invest in future apps.
There is nothing wrong with rules and guidelines in general, but they should at least be based on some objective principle and universally applied. According the press release, Apple’s reasoning is that this creates a better user experience, and will make Apple more money (that’s what it says). However, if that is the goal that Apple is trying to accomplish, why are these rules only selectively applied and seemingly designed to target the apps that could hurt Apple the most if they pull out?
If Apple wants to create a good user experience and increase its developer community, it needs to create clearly defined rules so that developers can work within those bounds. Apple’s vague rules have frequently forced developers to remove key features of apps just to be accepted into the store, which clearly is not good for users or the long-term health of the market.
This already has many apps giving heavy consideration to other options, and wishing there were more viable alternatives to Apple’s large market of people willing to buy apps and digitals services. Nobody is abandoning Apple of course, as it is usually still the best market for an initial app launch before it expanding to other platforms, but that divide is quickly diminishing, and changes like these have many reputable apps hoping for an alternative.
Both Android and Windows Phone 7 are promising in the near future, and Windows Phone seems they have the best balance of freedom and regulation, but both have weaker markets in terms of being able to make a profit and reach a target audience. That is slowly changing as people seem to always trend towards a free market. For better or worse, there is simply more consistency and reliability in freedom, and that is attractive from both a consumer and developer standpoint.
Apple is certainly no dictator, and its attempt to control the market may be a sincere and effective effort to maintain quality and provide a great user experience. But the ever-changing rules, comparatively long approval time, and uncertainty of the approval process can be very frustrating from a developer point of view.
Moreover, as Apple creates additional rules for specific businesses, governments may reciprocate by applying increased regulation to Apple’s app business. It will be fascinating to watch Apple argue against regulation while simultaneously imposing regulations on others, but that remains to be seen.
Todd McMurtrey is a blogger and marketer for Amadeus Consulting, a software company that develops, among many other things, iPhone apps for a wide range of companies and clients.