While Apple's new subscription service and its subsequent 30 percent cut hasn't exactly been most popular announcement the company has made, not everyone is against it.
Earlier this week, Apple introduced a service where content publishers will have a subscription option available in the App Store. Apple said customers will be able to set their own price and length of subscription and have the entire thing hosted on the App Store. In return, Apple CEO Steve Jobs said the company would get a 30 percent share of new subscriber revenues.
For the most part, it has garnered negative responses. There have been official ones from Rhapsody and other content providers, an unofficial alternative from Google and it's even warranted a reported antitrust inquiry from the Department of Justice and Federal Trade Commission.
Last.fm co-founder Richard Jones, an Internet relay chat went as far as to say it f---s over online music subscription providers with the 30 percent cut. He said many services won't be able to survive a 30 percent loss of revenue. Other content providers, such as magazine publishers, are upset because Apple is not requiring subscribers to share their personal data, which could harm their efforts to target demographics.
Angered content providers could be the least of Apple's problems. A report in The Wall St. Journal said the DOJ and FTC are in the preliminary stages of an investigation to see if Apple is violating U.S. antitrust laws by transferring media companies' payment systems into its iTunes store.
A representative from Apple declined to comment. Representatives from the DOJ and FTC did not respond to an inquiry for comment.
But not everyone is reacted so negatively. Some content providers are eager to sign up. One such company is PixelMags, a digital magazine publishing house.
There are two very distinct advantages for publishers with the new Apple subscription service, including its ability to reach more subscribers and that it offers another route for subscription revenue, said PixelMags founder and COO Ryan Marquis. We support Apple's goal of offering publishers new opportunities to expand their digital offerings and believe it benefits our clients and the consumer.
Other magazine publishers are on board as well. Maxim, Elle and Popular Science have all jumped on board with the new subscription service. The publisher of Elle told Advertising Age it's simply not viable to try and develop their own e-commerce platform without the help of Apple. They also say there are other ways, within the app itself, to find out subscriber information.
Meanwhile, while some analysts expect publishers to favor Google's One Pass, which is essentially the same service with a 10 percent cut, Gleacher and Company's Brian Marshall isn't one of them.
While Google's 10 percent is less than Apple's 30 percent, it isn't necessarily a better deal for publishers and/or subscribers, Marshall said in an email. Apple has created a large, growing installed base of iOS running devices (iPhone, iPad, iPod touch, Mac) which will grow to around 275 million units this summer. Google hasn't done that. Apple deserves what it charges as it has powerful distribution pipelines with its installed base, the App Store and iTunes.
Marshall said Apple doesn't need to respond to Google's lower price point. He expects both companies to okay from these new services.
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