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Apple Sticks to Its User-Unfriendly Guns With New Rule

Apple Sticks to Its User-Unfriendly Guns With New Rule

Customers who have grown used to the streamlined "Apple experience" may be surprised to find they'll have to go through a rather clunky process to purchase content for a number of their favorite iPhone and iPad apps. Apple's 30-percent commission requirement has driven many content providers to eliminate in-app purchases -- and that means they can't even provide a link to their own websites to facilitate sales.

By Erika Morphy MacNewsWorld ECT News Network
07/25/11 3:24 PM PT

A number of popular apps available for the iPhone and iPad -- among them The Wall Street Journal, Amazon's Kindle, Barnes & Noble, Kobo and Spotify -- no longer include links that direct consumers to their websites to purchase content.

App makers can offer in-app transactions only if they are willing to pay Apple a 30 percent cut of their revenue for each purchase. On top of its 30 percent fee, Apple restricts the customer information it shares with developers.

In February, Apple announced it was changing the rules with respect to in-app content sales, requiring that content be priced the same, whether the transaction should occur within the app or outside of it -- say at a company's website.

Following an uproar by developers and retailers -- the move essentially hamstrung companies on pricing -- Apple relaxed that rule. In June, it declared that all developers had to do was remove any in-app links directing consumers to websites where they could make purchases. In other words, consumers can play or read content they purchase outside of an app -- they just have to leave the app to buy it.

The deadline for the rule to take effect was June 30, but Apple reportedly viewed that as more of a target than a hard-and-fast deadline. However, it apparently is now pushing developers over the threshold, insisting that apps accommodate its new content policies.

Apple did not respond to MacNewsWorld's request to comment for this story.

Consumer Frustration Likely

The requirement is a particularly bitter pill for content providers to swallow, as the reason for the change is likely to be lost on the vast majority of customers, who will probably wind up blaming them for developing shoddy apps.

Consumers will have to go through multiple steps to buy content for their apps -- not something they ordinarily expect as part of the Apple experience.

There are still some loopholes that allow circumvention of the rule, although how long they will remain effective is unclear. For instance, Amazon's removal of links to the Kindle store takes effect only in its latest version of the Kindle, v 2.8. Earlier versions, such as 2.5.1, still allow consumers to purchase books via the app -- at least, that was the case on Monday.

Amazon did not immediately respond to MacNewsWorld's request for comment.

Netflix is attempting to nudge consumers in the right direction without breaking Apple's policies. The login screen directs users to visit netflix.com to sign up for a paid subscription -- but without a hyperlink to take them there. Presumably consumers will understand that they need to use their browser to access the site.

Change in the Air

This unwieldy means of managing content purchases is likely temporary.

Apple's commission demands are unreasonable and will eventually be rolled back, Patrick Schwerdtfeger, author of Marketing Shortcuts for the Self-Employed, told MacNewsWorld.

"As a result, retailers lose sales, users lose convenience and Apple loses commissions," he said. "Eventually, Apple will create a tiered commission structure that reflects different business models."

In the short term, however, publishers will likely back off, because access to consumer is king, suggested GoldSpot Media CEO Srini Dharmaji.

"Apple has a one-click billing relationship with consumers, which will be hard to replicate for any publisher," he told MacNewsWorld.

A long-term approach might be that as publishers work with Apple, they also focus on developing mobile Web apps that provide a similar experience to their native app counterparts, Dharmaji said. "With this, publishers will need to think about how to creatively market their offerings to reach consumers and motivate them to visit their mobile websites, while phasing out native apps over time."


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