Steve Jobs Email Suggests In-App Subscriptions Don't Apply to SaaS? | Hacker News Reader

Steve Jobs Email Suggests In-App Subscriptions Don't Apply to SaaS?

macrumors.com

78 pointssiglesias62 comments

It's disappointing to me how quickly people lose sight of how the App Store completely changed the game for indie developers.

If you depend on the App Store to market and grow your business then you're not really delivering SaaS, are you? You're delivering iPhone software that is published and marketed by Apple. In that case, you have no problem paying Apple 30% for the business you otherwise wouldn't have. It's a no-brainer.

If you don't depend on the App Store to market and grow your business, then it doesn't matter much either way, does it? Either the cost/benefit of 30% vs potential new business is worth it or it isn't. Nobody owes you anything.

Thats not so.

Lets assume that 5% of the people use your offering because there is an ios option. A lot more may use it, but they would have paid you anyway so you didn't get those as a customer and a lot of them is going to choose your ios sign-up because its a lot more convinient.

Now you have to pay 30% on everybody's signup fees, even if your offering is much larger than just the ios.

You also depend on electricity, computers, safety and security, a server OS, the internet, etc, etc to have a Saas business - do they also deserve 30%?

I thought you only had to pay 30% of the iOS users that subscribed using IAP, and not 30% of everybody. So lets say those 5% all used IAP, you would have to pay 30% of 5% of your total.

Now if your margin is less than 30% you could eat the loss of those 5% of users or increase your prices for the other 95% (and hopefully not lose more customers). Or somewhere in between where you up the price, but not enough to cover the loss of the iOS cut.

This is correct. You only pay 30% on subscriptions purchased through the IAP. Apple have expressly stated that they take nothing from subscriptions taken out through any other means.

So if I take out a magazine subscription through the IAP option in the magazine app, they pay 30%. If I take out the same subscription through the magazine's website they pay nothing, even if I then access it exclusively through the app.

The caveats are that I must have the choice of taking out the subscription through IAP, and must be able to get the same (or better) price through IAP. They're basically assuming that so long as there is no price difference they'll do well from the convenience of IAP for the consumer.

>"You only pay 30% on subscriptions purchased through the IAP."

Because the developer must offer IAP, Apple - with their 30% cut - gets first crack at the developer's customers and furthermore gets to put the best available pricing in front of the developer's customers as well.

To put it simply, Apple now requires the developer to deliver convenience for their customers and not only to forgo charging a premium for convenience but to actually withstand a revenue reduction because they are providing the convenience.

Yes, I don't disagree with any of that but the point I was refuting was the suggestion in the post above the one I replied to that you had to pay 30% on all subscriptions, whether purchased through the IAP model or elsewhere.

I'm not defending Apple (as it goes I think they have the right to make money this way but I do think the model needs some fairly heavy tweaking to address some valid concerns in certain areas) but I do think if we're going to have a discussion about it we should do so on the basis of correct information.

Quoting myself:

>but they would have paid you anyway so you didn't get those as a customer and a lot of them is going to choose your ios sign-up because its a lot more convinient.

In other words: absent a convinient one-click button, they would have gone through with their signup but given the convinient sign-up, they would use that.

In other words, their preference is:

    sign-up using apple convenient button >sign-up manually > not using the app at all

which is going to cost you 30%.

And almost all of them is going to be in this group.

So 95% of them would have purchased it even if there was no iOS version (as per your original post), but as there is an iOS version 100% of them will now make their purchase using the IAP model (as per the post above)?

That seems a pretty unlikely scenario to me. If they're all purchasing in app, then it's an indication that that's where they're using the subscription and that's where a significant value is being added. That provides in some part a justification for Apple's involvement.

You pay an electric bill, an internet bill, pay for your servers, and probably pay people to keep them safe and secure.

And you pay a yearly fee to develop for the iPhone, do you not?

That appreciation ought to be reciprocal though. Apple can't develop all the software users demand on their own.

There hasn't been a lot of push-back on the 30% cut that Apple gets on app sales because that's easy to scope to the App Store.

This same rigid structure doesn't make sense for a lot of subscription based businesses. That's Apple's prerogative, but we (the users) just lost Readability, and you can bet there will be a long line of other great apps that won't make it to the iOS platform because of that stance. I'm having a really hard time being thankful for that.

This point would be great, were it not for the fact that it isn't possible to not depend on the App Store due to how Apple uses their ownership of the hardware to lock out alternative software deployment on their devices: even if you are large enough to market and distribute and do all of the "heavy lifting" of getting your product into the hands of end users without ever talking to Apple, Apple won't actually let you, and treats you like some random indie developer.

Right now there is an entire billions-of-dollars market (mobile applications) that happens to be almost entirely dominated by the whims of a single company (Apple) due to there not being viable competing platforms on which to operate that market (#include all of the articles posted to HN this week despite Android growing 8x faster, it isn't treated as an apps platform by its users): this is starting to look like a clear-cut monopoly situation.

It will be great if someone from Apple officially confirms that the IAP subscription policy will not apply to SaaS. It will also be interesting to see whether they provide clear definitions for what they consider as SaaS.

In general, the mandatory subscription policy was a bad idea - for SaaS it is an even worse idea.

I think that Apple will ultimately back down from this policy (not just for SaaS, but for all apps) - partly because of DOJ concerns (antitrust regulators are looking at the policy as per the NYT) and also because they will lose a lot of apps from companies ranging from Rhapsody to Netflix.

Losing the "there is an app for that" slogan will be a huge loss to Apple and someone at the company is bound to realize that.

It all seems very subjective at this point doesn't it? What's the difference here exactly? If you're selling your content then you pay, if you're moving data around you don't?

On top of that I'd be HUGELY nervous if I was a SAAS provider that Apple might change their mind... they've done it before.

Steve's very short reply is: "We created subscriptions for publishing apps, not SaaS apps."

Does this statement sound stupid only to me?

"We said you can drive a car, not a blue car."

Your interpretation indeed sounds stupid to me.

This isn't the first instance of Apple as the Thought Police -- what will the yarrow sticks show today in the iChing?

You pay tax for driving a road car, not a remote control car.

I think you parsed it as:

We created subscriptions for publishing (the following): apps, not SaaS apps.

Whereas the rest of us see it as:

We created subscriptions for [publishing apps] (apps by content publishers), not [SaaS apps].

Yes, that was the problem. Thanks for the clarification. It indeed sounded very strange to me, since I am not familiar with the topic.

So we should then clarify what the distinction is. I considered Readability to be a typical SaaS app, and now Apple seem to think otherwise.

Isn't Readability an edge case? Yes, they offer a service, but they also offer content. By paying out the content owners, they are positioning themselves as publishers / content providers. They do offer other peoples content, not their own, which would make them different from a publisher.

But they don't act as a "gateway" to the content, so I don't see how they can be considered a publisher. They are effectively an XSLT script run through a remote server. You say to readability "here, make this webpage better", readability doesn't publish a list of formatted webpages.

(Although I appreciate they probably don't use XSLT and I don't mean to demean what they do).

And ironically, they take a 30% cut themselves as well.

Like rain on your wedding day

>"Isn't Readability an edge case?"

Assuming it is an edge case, then Apple clearly pushed the edge further out to include more apps under the policy rather than interpreting the grey area in the developer's favor. Edge cases set precedent and the one set by Readability may raise reasonable concerns among developers.

His reply really only covers half of the relevant changes. The other parts are where they now require in-app purchases for any "premium content" which is accessed by the app and forbid links to a website to purchase content.

Subscriptions have nothing to do with the Kindle app at all and only partially relate to Netflix. The larger conflict with these apps and the new TOS relate to online purchases of content rather than subscriptions.

This response also isn't very useful because it is a lot more important how the TOS are interpreted in practice by the App Store reviewers than what the original philosophy for the rule was.

The rules and interpretations can change anytime too. The more iOS Apps and Objective C developers there are, the more entrenched Apple becomes and the worse their behaviour becomes. It's the MS playbook from two decades ago.

It doesn't help the ecosystem when you're circumventing the normal fees and rules, or using non-Apple technology. Pay your dues, don't cause trouble and you too can benefit from the AppStore.

What about SaaS apps that serve up content as part of their service? It starts to get gray at some point.

Indeed... for example, what if 'premium' published content arrives via a Dropbox folder shared to the publisher?

You know, when you can reliably expect Jon Gruber's opinions on a matter to lean pro-Apple -- when he does all sorts of mental gymnastics to make the logic come out right, no matter how absurd it sounds -- well, how is he not regarded as a shill?

I thought this was common knowledge. He IS regarded as a shill. His analysis is still often pretty good as long as one acknowledges the bias.

This is it. With so few people providing genuinely intelligent, impartial advice, often you end you going to someone like Gruber who provides intelligent, partial advice and then balance it with similar voices on the other side of the argument.

I like Gruber but I know that some things are going to come with a certain spin.

John Gruber has been one of the most vocal critics of the App Store, its rules and the inconsistent application thereof.

Gruber says, FTA: "Maybe I'm missing something, but these guys claiming to be surprised and disappointed by Apple's insistence on a 30 percent cut of subscriptions when their own business model is to take a 30 percent cut of subscriptions strikes me as rich. And how can they claim that Readability isn't 'serving up content'? That's exactly what Readability does."

On the one hand you have Apple, who charges 30% for access to a platform. An app developer creates that value by writing something that people want, and then Apple takes 30% to deliver it.

On the other hand you have Readability, who essentially creates a filter for content -- just a little bit beyond applying a stylesheet to the content, as far as the end result goes. The actual mechanics are more involved, but the end-result is the same as if someone were to apply a custom CSS to your article that made it nice and, well, readable. And for this service, they charge $5/mo and spread 70% of your $5 with the producers of the different content which gets made readable.

To say then, that Readability is creating content is ridiculous. They are transforming existing content -- there is no comparison between them and, say, Amazon, who this policy is meant to target. Under Gruber's definition of 'serving up content', the mini Opera browser which delivers pre-rendered images of web pages (on some platforms) is also 'serving up content'.

Hell, VNC clients can easily be construed to be content servers under this rationalization!

I didn't even comment on this specific case. I just wanted to point out that, contrary to what you claimed, John Gruber have in fact criticized Apple quite a bit, and especially on the topic of their App Store regulations. To claim that he always agrees with Apple is simply either uninformed, or a lie.

Yes, Gruber is generally decent (except when it comes to Android, where he seizes every available opportunity to make snide, petty, uninformed remarks).

But everyone else here is talking about this specific case, which, as you suggest, seems startlingly out-of-character for him.

I didn't say he never disagrees with Apple. I said that he frequently does agree with them and that he often goes to absurd extents to justify positions that seem contrary to common sense. I said that he used tortured logic to arrive at these positions, and that he can be counted on reliably to agree with Apple.

Glenn Beck occasionally disagrees with the Republicans too but I bet I know how he'll vote in most elections.

He is sometimes critical, true, when the critical mass goes against Apple, but his sneering pro-Apple stance 99% of the time is insufferable. It seems like 50% of his posts are about iPad competitors.

To say then, that Readability is creating content is ridiculous. They are transforming existing content -- there is no comparison between them and, say, Amazon...

Amazon isn't creating content either. They are reformatting books into the Kindle format. Which is similar to what Readability does.

Amazon owns (or licenses) that content and is therefore 'publishing' it. Readability doesn't own or control the content, they are simply rearranging it like an intelligent RSS reader.

At a fundamental level Amazon take written content, pay the owner of the content money and sell it on at a mark up based on reformatting it in a way which adds value to the consumer.

How is that different to the way that Readability take written content, pay the owner of the content money, and sell it on at a mark up based on reformatting it in a way which adds value to the consumer?

The key difference between Readability and an RSS reader, is the RSS reader hands no money to the content creator.

I don't like this as I like the idea of Readability but I can't dispute that what they do is basically the same as what Amazon do.

One thing I would say is that I think Readability get a lot of credit for the fact that they will distribute payments to small content creators.

While this is obviously great, I'd be really interested to know how much of what they pay out goes to bloggers and how much goes to the usual suspects. I'm guessing that in reality it doesn't end up supporting the small guys as much as we'd like simply because most of what is read comes from the big providers - that's why they're big in the first place.

If you allow Readability to be 'different' because it's just a gateway, then everyone from Murdoch on down will create a similar gateway to their subscription content, no-one will pay Apple anything and users will continue to have to run through hassle of buying content outside the store and become disillusioned with the store.

Apple's core, recurring problem is that they're writing rules intended for well-defined software and services, but they simply can not account for all the software that doesn't neatly fit into those buckets.

There is almost nothing they can do with the store without running afoul of some well-meaning edge case.

There is a difference between criticizing the implementation of a policy (e.g. the AppStore review process is too slow, the AppStore review process sometimes makes embarrassing mistakes) and criticizing the policy itself (e.g. Apple's control over the AppStore is a bad thing). Gruber (and Marco et al) might criticize specific tactics by Apple but the Mac pundits largely agree with the strategy and the goals—whatever the strategy or goals may be.

That's simply not true either. John Gruber and other Apple pundits often disagree vehemently with Apple's strategy and their offers.

Remember when Steve Jobs presented the first third-party developer solution for iPhone: web apps?

"If all you have to offer is a shit sandwich, just say it. Don’t tell us how lucky we are and that it’s going to taste delicious." - John Gruber

http://daringfireball.net/2007/06/wwdc_2007_keynote

You're confusing a strategy (i.e. provide a way for developers to make apps within Apple's rules) to a tactic (i.e. only make web apps, not native apps). It's worth noting that Gruber would later defend Apple's decision to initially offer only web app development because, according to Gruber, obviously the tools for native apps were just not ready and the AppStore was still in development.

By Gruber's own admission, he wants Apple to succeed. Everything else is secondary.

You're splitting hairs. Or rather, drawing arbitrary lines in the sand. And how could anyone in their right mind not defend Apple's choice to at the time not offer tools that didn't exist then? That doesn't make you biased, it makes you reasonable.

He has also admitted that he wants Google and Android to succeed. That doesn't mean he agrees with all their strategies, no matter how selectively you want to define "strategy".

If you agree with Apple's strategy (i.e. create apps only within Apple's rules) then it of course makes sense to later defend Apple for only allowing web apps while the AppStore and Apple's development tools were not ready. But if one doesn't stick only to Apple's strategy, then other options present themselves like allowing developers to release their own native apps until Apple got its act together. Developers were ingenious enough to develop, and even sell, native iPhone apps before the AppStore came along.

Gruber wants Google and Android (and Palm and webOS) to succeed so they can keep Apple sharp and on top of the game; Gruber doesn't want Apple's competitors to succeed in and of themselves, his desire is predicated on more success for Apple.

Gruber's views are sufficiently nuanced to allow some disagreements with Apple on minor issues while still remaining in agreement of their overall goals. I'm not the one 'splitting hairs' by pointing that out, indeed it's actually Gruber's arguments that appear so (his dismissal of the Readability blog post because they seem like a content publisher—even though Readability isn't—is an example of him drawing arbitrary lines in the sand)

Sent from my iPhone

How does someone like Steve Jobs - someone who presumably has an inbox that is under a constant barrage of spam - productively check mail on an iPhone?

I don't get a lot of mail and still, the lack of junk control filters makes managing mail on the phone almost impossible.

I expect his mail is heavily triaged / filtered by a secretary or assistant, so it'd be quite manageable on a phone or whatnot.

It's also easier to manage if you don't bother with politeness or try to be clear. One line vague replies seem to be the go.

Realistically a CEO isn't going to have time for more so you have to ask yourself would you rather have this or nothing. How many other CEOs even engage at this level?

The man has a company to run and some personal stuff to deal with. Yes I wish we got more detail but I'd rather this than nothing.

What you say makes sense, except when this substitutes for official communication from the company, as often is the case with Apple. If the CEO is aware of this issue, and the company prefers to keep mum on this topic, then it is obviously a considered silence.

Apple haven't replied yet. That doesn't mean that they're not going to reply.

Generally companies are ill advised to make knee jerk reactions to these situations. More customers and potential customers are joining the debate each day and if Apple made a statement today, it could be wrong tomorrow. This whole thing is less than a week old.

If Apple haven't responded in a month then I'd agree, however right now I think this is a sensible pause for reflection.

I think it's worse than nothing. Before there was one Apple position (the app store agreement), now there are two Apple positions (with the email). But can you really point to this email as justification for anything if your app gets rejected?

Plus you don't even know that it's real.

Man, reading this stuff is like trying to figure out the US tax code. Every time I get more information on the new app store rules I just get more confused. At first I was really liking the fact that I could purchase apps and have them available on any Mac I use. Now I'm not so sure that the App Store is a good thing at all, for developers or consumers.

My personal feeling is that any contract that has this many rules and exceptions is probably going to screw me over.

Don't apply to SaaS today. What about tomorrow?

If there's only one copy of an article stored on Readability's servers, then I'd say they're a publisher. If they store everyone's articles separately, then they're a service.

Well, that’s a meaningless distinction. Those technical details don’t change a thing for the user or the business. (Did you know that Dropbox will upload identical files only once?) They are interesting to engineers and developers but no one else.

You can define “publisher” and “service” like that but it would be meaningless and arbitrary.

At what level would that apply?

If they're using EMC for storage, then even if their database says they have 1,000 copies they would only physically have 1 (although not quite true as then you have backup, replication, etc).

It's a meaningless distinction and certainly not one that should be dreamt up by a tech company.

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