Despotic dictators, your days are numbered. Tempers have hit the boiling point. The people have had enough and are taking to the streets. Revolution is in the air.
I'm not talking about Tunisia, Egypt, Yemen, Bahrain, or Libya (though I certainly could be). I'm talking about Apple and its app developers -- the army of thousands who, perhaps more than anyone else besides Steve Jobs, have made the iPhone and iPad the "magical, life-changing" devices Apple purports them to be.
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Apple's recent app store diktat --- it will exact a 30 percent tax on every subscription made via the iTunes Store, developers can't offer a better deal elsewhere, and Cupertino will retain control over customer data --- has inspired a number of major mainstream app developers to go public with their discontent in a way we haven't seen before.
Rhapsody was the first to cry foul, saying the 30-point vig will cripple low-margin businesses like its streaming music service. Its official statement:
An Apple-imposed arrangement that requires us to pay 30 per cent 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 per cent monthly fee vs a typical 2.5 per cent credit card fee.
Richard Jones, co-founder of the popular Last.fm music sharing service, says Apple has performed an act on them usually only witnessed in prison shower stalls, per the Register.
It's not just the tunesmiths singing the blues. Richard Ziade, CEO of Readability, whose app lets people enjoy online content without those annoying ads or ubiquitous social media sharing buttons (like the ones you see to the left), complains that his company's latest app was rejected because it offered users a way to subscribe that was outside Apple's parameters.
In an open letter to Apple he writes:
We believe that your new policy smacks of greed. Subscription apps like ours represent a tiny sliver of app sales that represent a tiny sliver of your revenue. You've achieved much of your success in hardware sales by cultivating an incredibly impressive app ecosystem. Every iPad or iPhone TV ad puts the apps developed by companies like ours front and center. It was a healthy and mutually beneficial dynamic: apps like ours get exposure and you get to show the world how these apps make your hardware shine. That's why we're a bit baffled here.
Ziade says Readability is turning away from the app store and toward "the free-form nature of the Web," but offers to return if Apple promises to donate 70 percent of its revenues from Readability subs to writers and editors, as Readability does.
In a characteristically terse email missive, Steve Jobs responded to one app developer by saying, "We created subscriptions for publishing apps, not SaaS apps." But with apps like Readability --- or, for that matter, media streaming -- the line between content and service is a tad blurry.
Given a choice between equally priced alternatives, users will invariably go for the option with the least amount of friction, which is where the Apple in-apps purchase plan stands to win. Would you rather tap once to make a purchase or fire up your browser and hunt down the subscription link on the publisher's website? Yep, that's what I thought.
Thus, we return yet again to that old chestnut, the battle between open and closed systems. Open systems tend to be messy, chaotic, and unpredictable, but usually spread the wealth more evenly. Closed systems can be brutally efficient and reliable, but tend to concentrate wealth and power in the hands of a select few. That's the same in technology or politics.
History tends to favor open systems in the long run. And if Apple doesn't provide one, Google surely will. My prediction: Apple will eventually back down, slightly -- certainly after more viable competitors to the iPad arrive, beginning with the Motorola Xoom some time next month -- except it won't be characterized as backing down so much as "clarifying" the rules.
Because when the mob is at the palace gates demanding entry, your options shrink in a hurry. Even Emperor Jobs realizes that.
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