Rhapsody says no to Apple Subscription: 30% cut is just ridiculous!

February 16, 2011, By Shawn Wagnon

We knew this was coming when we talked about the Apple Subscription Policy. For those who have not really gone through what it means, all publishers need to provide in-app subscription options that are at the same price as an outside app subscription. But if iOS users subscribe to the content in-app, then Apple keeps 30% of the revenue, you get 70%. Outside the app means you keep 100%.

But since users will barely do that and you cannot provide in-app links for subscription outside, most publishers already established on iOS are pretty much… Let’s say ‘going to lose money’; because we wish to not touch on the expletives. Rhapsody are the first big name to say “we have had enough of this.”. But being a big business firm and all, they said that they will be ‘collaborating with market peers in determining an appropriate legal and business response to this latest development’.

Yup, that is a legal threat to Apple and an actual legal process might also start very soon. This whole ‘subscription’ business becomes simply unviable for most music & entertainment companies with the 30% cut and with rules that fix their subscription rates outside iOS as well. (since you have to give Apple in-apps subscription the cheapest rate available)

So, who will be next to join line? Maybe many of these guys will just quit on the iOS and jump over to make Android better? This could backfire in a huge way for Apple. Or they could continue to make bigger profits than ever before… Next few months will decide whether Apple’s Subscrption Policy is here to stay for sure.

© 2008-2012 DeviceMag.com - All rights reserved | Privacy Policy