SiliconFilter

Is Apple Getting Too Greedy? Demands 30% Cut of In-App Subscriptions

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After a lot of confusion earlier this year, Apple today finally clarified its rules for in-app subscriptions for magazines, newspapers, video and music. The rules are very straightforward: Publishers can continue to sell digital subscriptions on their own websites and give free access to existing subscribers. Apple will not take a cut from these transactions. Publishers who offer out-of-app subscriptions, though, also have to offer in-app subscriptions and the price has to be the same or lower than for subscriptions processed outside of the app. Apple will take a 30% cut from these in-app transactions.

This is a rather hefty fee for processing a transaction given that most credit card processors just charge around 2.5% and a small transaction fee (generally around $0.25). It’s also worth noting that it looks as if Apple will take this same cut whenever a subscriber renews a subscription, though this isn’t 100% clear yet. This new subscription plan will become mandatory starting June 30.

Steve Jobs: “Our Philosophy is Simple”

Just in case developers think they can just provide a link to their regular web-based subscription service in their apps and circumvent Apple’s system, the rules explicitly state that “publishers may no longer provide links in their apps (to a website, for example) which allow the customer to purchase content or subscriptions outside of the app.”

In the words of Apple CEO Steve Jobs: “Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.” That does sound fair, but in reality, chances are that the majority of new customers for subscription services will come from apps and given that developers aren’t allowed to route around the system, this 30% cut become a major issue for some publishers.

Can Publishers Afford This Without Raising Prices?

You can currently buy an annual subscription to Wired on Amazon for $10 and getting National Geographic for a year costs $15 per year. Will these magazines have to offer the same prices for the app-based versions of their products? (Or do these “promotional” prices not count?) If Hulu has to give Apple $2.40 of every $7.99 subscription it sells, can it still make a profit? Or will Apple’s move force them to raise their prices across the board?

It is, of course, a good thing that Apple is making it easier for consumers to buy subscriptions and helps publishers acquire new subscribers. Having to pay a 30% fee for these services does seem quite steep, though, especially given that Apple now owns the customer and not the publishers.



11:37 am


The Daily Gets an Update: It's Still a Disaster, But At Least it Loads

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The Daily, News Corp.’s much hyped and buggy iPad-only newspaper just got a much-needed update. Even though the launch of The Daily was delayed by months, the first version of the app quickly turned out to be extremely buggy (I couldn’t even start it for the last few days) and quite a disaster when it came to usability. Today’s update does little to fix any of the usability problems, but at least the app loads again.

Interestingly, the release notes also point out that current users should delete the app before upgrading. Chances are that few of The Daily’s readers will actually see this note. I am not sure what the repercussions of not deleting the app are (I had actually just uninstalled the app just before the update appeared), but it’s probably best to follow these instructions. Of course, even if you never get the app to run again, you can always use this web-based index to read the main stories.

But at Least it Loads…

There is no point in repeating all the issues with the design and content we and others have found with the app. Suffice to say, today’s update does nothing to alleviate these concerns. On the positive side, though, as the release notes on iTunes note, today’s update brings “improved performance and stability.” Indeed, the app does feel somewhat more responsive – though it still feels very sluggish – and hasn’t crashed yet.

On the negative side, though, the compression artifacts that made the carousel view anything but attractive are even more pronounced now (maybe in an effort to improve its speed without having to actually change any code). Of course, delivering a new edition still takes far too long and the updates the news team sometimes pushes during the day still aren’t highlighted in any shape or form.

So while it’s good to see that the tech team at The Daily quickly fixed some of the problems with the app, today’s update does little to address any of the real concerns most of us had with the original paper. It’s still light on hard news stories and trapped in old-school newspaper thinking. Unless the team fixes the glaring usability issues and actually pushes out real news stories (instead of horoscopes and stories about how guys like cats), it’s hard to see how News Corp. can recoup its investment here once the ad-supported free version expires and readers will be forced to pay a subscription fee.



2:21 pm


The Daily: Old News in a Flawed Package

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News Corp. today launched The Daily, the first new national newspaper in the U.S. that is specifically designed for the iPad. At the launch even in New York today, News Corp. founder Rupert Murdoch argued that The Daily will give his company the ability to innovate in the tablet age and introduce readers to a “fresh and robust new voice.” For the first two weeks, the Daily will be available for free, courtesy of Verizon. After that, a subscription will cost $0.99 per week or $40 per year (there is no monthly subscription option). You can now download the app from Apple’s App Store.

Given that, according to Apple, there are already over 9,000 news apps out there and news apps have been downloaded over 2 million times, can the Daily really make a splash in this market? To find out, we took a closer look at the app.

Interesting But Flawed

After spending some time with the app, it seems as if the designers tried to pack the best parts of the traditional newspaper and online world into this product. Sadly, the mix between the two is anything but satisfying and errs on the side of  old-school newspaper thinking.

The app features the serendipity of reading a newspaper (mostly because it doesn’t have a decent table of contents that would make browsing to a specific article easy), glossy design, high-quality editing and great photography. The app can pull in tweets for articles when warrant it, there are outside links to blogs and other traditional papers online, you can leave audio and text comments on articles and you can share links to stories on Twitter and Facebook.

As for the journalism and writing, it’s probably not fair to judge the app by its first edition, but there seems to be a lack of hard news and a strong focus on lifestyle stories (“The Man Snoot”? Really?). The fact that The Daily features a horoscope section is a clear example of its legacy sensibility.

Also, the news part of The Daily isn’t keeping up with recent developments. The story about Egypt, for example, is based on old information and the paper currently makes no mention of the violent clashes that happened in Cairo today.

Somehow, though, none of this feels very satisfying. The app is riddled with little usability issues (see below for details) and even though it is far prettier than most news apps and looks more like a magazine, the app is held back by Murdoch’s insistence to bring the old newspaper paradigm to the iPad.

Hands-On With the App

The first thing that stands out while looking at the app is the production value the team has put into the design and images. The overall design, with a focus on photos and clean typography, makes for a pleasant reading experience that is actually more intuitive than that of the early iPad magazines from Wired and Popular Mechanics.

The central view of the paper – the one you see when you first start the app – is a carousel that shows thumbnails of all the papers’ stories. From every story, you can also navigate to the paper’s different sections (News, Gossip, Opinion, Arts & Life, Apps & Games, Sports). Oddly, the tech section – which includes a profile of Quora in today’s edition – is called “Apps & Games.” You can’t directly browse to a tech news section in the app.

You can share stories on all the major social networks. After you share a link, your friends will be able to see a copy of the article on the Web, but won’t be able to see any other content from The Daily.

Odd Design Problems

Even though the overall design of the app looks nice, this first version features so many annoying little design issues that using the app isn’t quite as much fun as I expected.

One thing that immediately caught my attention was that there doesn’t seem to be a way to just get an overview of all the articles in the app. Even though the carousel is very pretty and you can bring up a list of thumbnails by clicking at the top of the screen, you can’t just press a button somewhere and see a full table of contents.

Another thing that annoys me about the app is that its functionality relies too much on switching between portrait and landscape modes on the iPad. Generally, you will see photos related to a story when you are in landscape mode and the text while you are in portrait mode. I tend to lock the iPad’s rotation, however, as it’s too easy to inadvertently switch back and forth between the two while I’m reading on the couch or in bed. So switching between the two just gets annoying after a while but is essential if you want to get the most out of your The Daily subscription.

Also, the preview images on the carousel are over-compressed and hence very grainy. Also, the 360 degree pictures that the editors highlighted during today’s launch are of surprisingly low quality.

One feature I dearly miss while using the app is a browser-like “back” button. In the first edition, for example, there is a link to a graph with stats about Egypt at the end of the lead article. This link takes you to the middle of the paper – but then you can’t easily get back to the position you jumped off from.

Another annoyance (though I guess I’m nitpicking now): when you share a story on Twitter, the keyboard blocks the “post” button and you can’t actually send your tweet until you dismiss the keyboard.

The web versions of the articles are also rather unsatisfying. Given that News Corp. wants you to subscribe to the tablet app, that makes sense, but a bit more attention to the design there would probably entice more readers to actually download the app.

Worth Subscribing To?

Overall, then, this is an interesting experiment. Will I keep my subscription after the first two weeks? Currently, I don’t think so. The New York Times app (which will soon move to a paid model as well) isn’t as pretty as The Daily, but it is far more usable and gets me to the news I want to read faster while still keeping that sense of news discovery and serendipity that makes browsing a physical newspaper so satisfying.



11:00 am