An Apple subscription model: Tuesday's announcement was an announcement that had been long anticipated. But companies, publishers, and developers aren't exactly scrambling to jump on board with the plan. In fact, it's already prompted a negative response from music subscription service Rhapsody.
Apple said this subscription plan for would apply to "content-based apps" in the App Store: magazines, newspapers, video, music, and more. The model extends the same plan that Apple offers to other developers that awards Apple 30 percent of the sales, giving the app creator the remaining 70 percent.
"Our philosophy is simple – when Apple brings a new subscriber to the app, Apple earns a 30 percent share;" Apple CEO Steve Jobs stated in the announcement. "When the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing."
But Rhapsody president Jon Irwin said that arrangement is not favorable for his company.
"An Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers, and artists, is economically untenable," Irwin said in a statement. "We would not be able to offer our service through the iTunes store if subjected to Apple's 30 percent monthly fee vs. a typical 2.5 percent credit card fee."
Rhapsody's statement isn't surprising. It had been widely rumored that the reason for the delay in subscription offerings stemmed from disagreements between Apple and publishers, who felt that 30 percent was too big of a cut for Apple to take. But earlier this month at the launch of The Daily, News Corp.'s iPad-only publication, Apple's head of Internet Services Eddie Cue hinted that subscriptions were coming soon. The Daily was the first app to be available on a subscription basis, for $0.99 a week.
Apple would bill customers in the same manner it charges them for other individual apps on iOS devices, including The Daily. Bloomberg said that Apple won't release information about people who sign up for subscriptions directly through the App Store, another sticking point with publishers.
Apple declined to comment on the matter. Other parties have been silent, too. Neither Time Inc. nor Conde Nast has made a peep about the subscription announcement. Considering both of these publishing giants offer a multitude of their magazines in app-form, the absence of any kind of statement could point to their displeasure with the arrangement, CNN Money pointed out.