Apple goes too far with subscription money grab 4

You have to give Apple credit for chutzpah. Last week they announced a new subscription system for content available on iOS devices and they are trying to grab revenues that they have no legitimate claim too.  I love Apple design and I prefer to use Apple computers and iPods over any competing brands. However, I have avoided being drawn into the iOS ecosystem which includes iPhone and iPad. Apple simply exerts far too much control over these devices for my liking.

When Apple introduced the App Store for the iPhone and iPod Touch several years ago they set up a system that allowed both paid and free apps. Aside from a one-time $99 to join the developer program, developers could create and distribute apps through the store at no additional cost such as hosting fees. Developers that opted to charge for their apps would split the revenues 70/30 with Apple. This wasn’t an entirely unreasonable split since Apple provided the distribution servers and credit card processing. It’s generally been acknowledged that Apple makes little or no profit on this deal since its costs were roughly comparable to its 30% of the take. A fair deal all around.

The new subscription system allows publishers to distribute apps such as News Corp’s “The Daily” and charge a recurring subscription fee for content, just like a newspaper or magazine sub. Apple insists on take a 30% cut of this revenue which is OK if it is handling data distribution and credit card processing. However at the same time that the subscription payment system was announced, it declared that any and all purchases through apps must be handled through its in-app payment system and the subsequent 70/30 split.

This is actually very problematic for many companies. For example, Amazon offers a free Kindle e-reader app for iOS devices (and Android and Blackberry as well). Kindle users can buy books directly on their devices but on other machines, the app sends users to a mobile browser to search for books and make purchases on the Amazon web site. The books can then be downloaded through the app from their library.  Nowhere in this process is Apple facilitating anything. They are not serving data or handling financial transactions, Amazon is bearing all the costs of distribution. So why does Apple deserve any payment.

This actually started when Sony submitted a reader app similar to the Kindle App that also tried to bypass the in-app purchase system and Apple rejected it. Apple subsequently told Amazon, Barnes and Noble and other distributors that they could no longer get away without paying Cupertino its due. The situation gets even worse for streaming media providers like Pandora, Rhapsody, Netlfix and Hulu.

Those companies spend a lot of money on licenses and a distribution backbone independent of Apple.  Apple provides no service to them other than then customers that bought its products and want to use a variety of services. However, Apple already profited handsomely when it sold the devices. If Apple wants an ongoing revenue stream from media streaming it needs to get off the pot and open its own service.

Being forced to pay Apple 30% of gross revenue for the privilege of access to its huge customer base is just outright extortion on Apple’s part. Most of these companies are money losers already losing such a large chunk for no reason would make then totally unviable. If they raise prices to pay off Apple they will also have to raise the price charged to users on other platforms like Android and Blackberry because Apple also mandates that media distributors cannot charge its users more than any other platform.

The Federal Trade Commission and Department of Justice have apparently opened a preliminary anti-trust investigation into the new Apple practices.  Unfortunately it seems unlikely that the feds will end up doing anything of significance to Apple. Given that, people should stop buying iOS devices until Apple backs down on this issue. The money grab needs to stop.  Apple should not be paid for doing nothing.

Bum Rush the Charts!

For far too long now the big record labels that comprise the Recording Industry Association of America (RIAA) have abused their customers and their suppliers, the musicians. They charge too much money for product, and provide a lot of crap in return. And not nearly enough of that money gets back to the poeple who created the content that makes the business possible. Now a group of podcasters are trying to organize an effort to show that the RIAA is obsolete and unnecessary. Mark Yoshimoto Nemkoff of Pacific Coast Hellway created Bum Rush the Charts. The idea is to pick one band that has made their music podsafe (available to podcasters to use on their shows free of charge), and get as many people as possible to buy one particular song on one day to try and drive the song to the top of the iTunes chart, ahead of all the stuff that the RIAA is putting out.

The band that was chosen is Black Lab and their song Mine Again. Chrisopher Penn of the Financial Aid Podcast has set up a special iTunes affiliate account and all the commissions from purchases through that link will go to the Student Loan Network iTunes account. Black Lab has also committed half of any money they make to the fund as well. So for $.99 you tell the RIAA that they can take a hike, get a great song and contribute to help some kids education. All of this is going to happen on Thursday March 22, 2007.  I’ll add the appropriate link here on Thursday morning so make sure you come back to this post then and buy the song.  thanks

Free music from SXSW

sxsw 2007For the third straight year, the organizers of the South by Southwest Festival are offering up a collection of free music by some of the hundreds of bands that are playing in Austin, TX next week. The first release for this up now, and contains 739 mp3 files of all kinds of music. The files are in one huge zip file and they can be downloaded by via bittorrent. If you haven’t already used bittorrent, head over to Azureus and grab their torrent program. Azureus runs on Windows, Linux, and Mac OSX. Once you install Azureus, download the torrent file from here and drop it onto the Azureus window, and start downloading. It’s a big 3.1 GB file (the zip file with all the mp3s, not the torrent file, that one is small) so it will take a few hours to download if you have a fast net connection. Fortunately the nature of bittorrent is such that the more people share the faster the downloads go. After it’s done please leave Azureus open, and keep sharing with everyone else. After all, we learned in kindergarten that it’s good to share. This is all perfectly legal and the songs are released under a creative commons license so you can pass it along. Go sample the new music, you won’t be sorry!

MewzikCast 2 is up

The second edition of Max’s MewzikCast was posted last night. Go check it out if you want to hear some great new rock that corporate radio seems to have no interest since they cant afford the payola. If you like the show make sure you subscribe to the feed so that you get the new shows automatically when they are published.

Max’s First Podcast

My son Max recorded his first podcast night and I just finished posting it. It’s called the MewzikCast and as you might have guessed it’s a music show. Go check it out and subscribe to the feed if you like it. He picked out all the music himself, came up with the name and did all the talking. I just helped with the technical side. This was just his first attempt and I’m sure they will get better as he goes along. Mewzik is Music

Gerry’s music

My friend Gerry has recorded some his songs and put them up on his Myspace page. He has some great songs and is a really good guitar player. Gerry always brings his guitar along to parties and it’s to L. Ron, Ron. His music has kind of Steve Earle feel to it and I really like it. I particularly like Good of the Country. Head on over and give it a listen.