US, 16 February 2011 – App developers are outraged by Apple’s new iTunes in-app subscription service policies. While streaming music service Rhapsody is openly voicing its disagreement with the new policy, other publishers are looking into legal action.
Yesterday, Apple launched a new subscription service that allows iOS application developers the possibility of having recurring monthly subscriptions with their apps. And, for Apple’s graciousness, they will command a 30% monthly revenue share on subscriptions and sign-ups.
Apple is putting handcuffs on publishers by conditioning publishers to offer the same price or less as digital subscriptions outside its iOS app. Developers can no longer have clients buy content outside the app.
Publishers and developers are not accepting this without a fight. Apple may very well face antitrust scrutiny for their anticompetitive imposition on price.
John Irwin, Rhapsody’s President, is much more vociferous in his opposition as he made a direct statement today and hinted at a lawsuit.
Mr. Irvin declared, “our philosophy is simple — an Apple-imposed arrangement that requires us to pay 30% of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee versus a typical 2.5% credit card fee.
“We will be collaborating with our market peers in determining an appropriate legal and business response to this latest development.”
Expect legal retaliation from publisher and developer groups unless Apple reconsiders its new policies.