It was with excitement that I read that the Financial Times had pulled its iOS app from the Apple App Store. I would actively advise more subscription based content publishers to follow the FT’s lead. TMV would go even further to state that content owners should insist Apple take no, or a greatly reduced sales commission from content sold via the iTunes and/or app store. Why? Quite simply because Apple can easily afford to run the iTunes stores as a complete loss leader to ensure consumers continue to purchase its hardware devices.
Reinforcing this is the FACT that without content Apple loses a key competitive advantage in terms of content sales margins and its closed ecosystem, which is the most anti-consumer digital retail proposition in the marketplace. Content owners should also leverage the fact that without their content Apple has no market within which to sell its hardware devices which rely on content consumption including the iPhone and iPad(and that’s just for starters).
Drilling down further, as previously reported in TMV Vic Gundotra, VP of Engineering at Google has stated that “what they clearly see happening is a move to incredibly powerful browsers …Many, many applications can be delivered through the browser and what that does for our cost’s is stunning…We believe the Web has won and over the next several years, the browser, for economic reasons almost, will become the platform that matters and certainly that’s where Google is investing”. Building expensive ‘thick client’ apps is quite simple bordering on absolute stupidity in my view.
It would be simple and rather inexpensive for content publishers to build ‘thin client’ HTML5 apps, which consumers could download and install from content owner or affiliated websites. The consumer would hardly notice, as the UX would be extremely similar to ‘thick client’ apps. The content owner would receive 100% of revenues instead of needlessly paying a 30% fee into Apple’s greedy hands. All Apple provides is a gateway with an OS in the mobile space that will continue to lose market share in the next three years. So why be locked into such a niche business model?
If one of the most successful financial newspaper publishers can do it, receiving $550.65 USD per premium annual subscription in the process. Why should apple receive 30% of that annual subscription? More importantly why should content owners willingly give Apple such a high cut, when they do not contribute one cent to producing the content in the first place? What is there to stop major content owners? The same old story – reactionary gutless leaders essentially…
Regardless, all other newspaper and magazine publishers should be following the FT’s lead. Developing a sufficiently robust HTML5 browser based client would cost no more that roughly a maximum of two months of the 30% in-app subscription fee Apple currently receives per publication from all content publishers. As per the FT’s own words such a strategy enables them to “bypass Apple’s iTunes Store, Google’s Android Market and other distributors to secure a direct relationship with readers”. After all folks data is the oil that ensures longetivity in the digital realm. So why allow middlemen like Apple to deny your business the opportunity of dealing with your customers on a one-to-one basis?
TMV have heard from numerous music industry sources both peak body and label wise, that the data Apple provides through to content owners is in one sources words “abysmal”. Furthermore, building HTML5 browser based clients brings providing an app like experience for consumers to an affordable level (even for independent content publishers).
All of the above does not necessitate preventing content owners apps from iTunes if the relevant consumer so decides. It just means providing a more dynamic array of choices that help in enabling content owners to develop a personalized one-to-one relationship with their customers. TMV asks what is wrong with expecting content owners to have such an aspiration? Furthermore, TMV would also advocate the same strategy across all app stores including Android, Windows Mobile 7, Blackberry, iOS and the rest.
My core problem with Apple is its demand for a 30% cut of all subscription revenues. It is just plain unabated greed that is driving their position and their global monopoly position in the app store space is ensuring they get away with this highway robbery. What is wrong with suggesting a more open and level playing field for digital content retail? A fee of 5% is palatable and fair, whilst also ensuring reasonable revenues for Apple after transaction fees – and the same goes for all other app stores as well.
