A lot at stake in Apple Subscription model debate

There has been much discussion and in some quarters outrage at the recent introduction of the Apple Subscription model.

At the heart of the debate is the decision by Apple to require that you must offer in App subscription purchases at a price no more expensive than you offer outside the App.  When coupled with the decision of Apple to continue to take its standard 30% cut of any in App purchase, publishers have been quick to react.

Many publishers claim that at the rate they are charging for the subscriptions there simply is not a margin of 30% to share with Apple.  For them the inability to charge more in App than they charge at their own site is the issue.  If they could increase their prices to reflect the 30% share with Apple for most the issue would be moot.

Of course from the Apple side of things they see themselves as akin to a Shopping Centre landlord.  They have built the App store up and in doing so provide access to millions of potential subscribers.  Coupled with the ease of their one click purchase via your iTunes account, they also can argue that they are actually increasing the amount of people who subsrbibe.

br />There are certainly many people for whome providing their credit card to another online party together with filling in annoying sign up questionnaires simply means though don't take up the subscription.

Since via a in App purchase they don't need to provide any further details for them the choice is clear.

Still even shopping centre landlords need to ensure their rents are set at level that allow their tenants to make a profit.  Whilst in theory they have many tenants in waiting constant turnover in tenants is never a good look.  Also the quality of the tenants is a important part in differentiating the centre from others.

Likewise for Apple they need to pause and asses is the 30% to much?  After all what people are paying for via the subscription is the publishers ongoing content.  Despite what so many think, quality content can not be free nor is it free to produce.

As a result publishers still have overheads even if they were to move to a full online offering.

The other danger for Apple here has quickly been shown with Google announcing a much more open subscription service on the Andrid platform.  Combined with a lower 10% take on subscriptions it is much more appealing to publishers.

At the moment Apple no doubt feels pusblishers can not afford to not be on their platform, however as the Honeycomb OS rolls out in more Andriod tablets and HP get Web Os up to speed that may not stay the case.  Also like a landlord at a premium shopping centre Apple no doubt rightly feels they can charge a premium to be part of the current best App Store.

Still in time publishers may elect to forgoe the iOS world and place their bets on the other playforms.  Like a shopping centre the loss of the top tenants will see the App store lose its allure and shoppers will start to look elsewhere.

The other reason that is a particular danger for Apple is many see their iPad in particular as a consumption device.  Without compelling content the device suffers for such users.  That may well see them switch to a competing device to get their favourite content.

A saving grace here is of recent times Apple has reacted to feedback and made adjustments.  

I know I hope they listen to the concerns raised and review the 30% rule for in App subscriptions.   Such a decision will see the iOS devices stay at the forefront of the emerging tablet eco system and 10% of everything may just be a whole lot more than 30% of something much smaller.