Apple’s (AAPL) new rules about services that require apps to sell their subscriptions through in-app purchases is drawing more fallout among developers.
The rules, rolled out to allow publications like The Daily to offer subscription content through the iTunes App Store, also extend to include any and all subscription sales of any kind -- a fact that is creating new stumbling blocks for some developers who can’t find a workaround for their systems, and causing others to pick up and stop supporting iOS completely.
In an open letter on the blog for Readability, a web app that simplifies content on websites by filtering out ads and images to streamline the experience, co-found Richard Ziade chastised Apple’s new policy as, well, greedy. Readability’s new app was recently rejected by the App Store for “utilizing a system other than the In App Purchase (IAP) API to purchase content, functionality, or services,” a new requirement of the App Store. Ziade’s not the only one who thinks so (just ask Rhapsody), mostly because Apple is making sure that it gets a cut of everything that goes on in the App Store.
The problem for Ziade is Apple’s demanding of a 30 percent cut on anything a developer sells -- “content, functionality or services,” as the App Store’s Developer Licensing Agreement states. The new rules say that anything a user can buy outside the app, like upgrades to premium accounts or monthly subscriptions to be able to use services as well as content like streaming music subscriptions, must be made available by in-app purchase. And Apple gets a 30 percent cut of all purchases.
This makes a fair amount of sense when it comes to content such as magazines and music subscription services, which are directly benefiting from the fact that owners of iOS devices are subscribing to the content in the first place, and they’re using those devices as their primary means of accessing the content. An iPad version of a publication ought to give Apple a piece of the subscriptions that iOS drives to that publication -- that makes sense.
But developers like Ziade are complaining that they’re forced to give a cut of their revenue to Apple for everything else, as well. Readability’s iOS app is more of a bonus for its web service, which is what its premium customers are paying for when they pay a $5 subscription. The app is not its primary means of making money or doing business, and the result of the new restrictions is that Readability will leave the App Store rather than change the way it operates rather than pay off Apple.
For another developer, the new rules actually restrict it from being able to operate an iOS app. TinyGrab, a social networking service in which users share screenshots with one another, announced that it won’t be supporting its iOS app anymore because Apple’s rules actually prevent it from working.
TinyGrab offers users a premium subscription to download its web app by way of a user account. Once you sign up with TinyGrab, you can choose to pay for your subscription account from the service’s website via PayPal, and the account system allows you to access TinyGrab on multiple devices after having paid just once -- a cloud-based system, as it were.
But Apple’s rules prevent the passing of user information to developers, so TinyGrab’s iOS app can’t allow the purchase of a TinyGrab account. It just doesn’t work that way. There are several other issues TinyGrab runs up against with the way it does business and Apple’s rules, but the effect is that, unless TinyGrab wants to totally rework its structure in order to accommodate iOS (like Ziade claimed Readability would have to do), it can’t operate as an iPhone app. So it’s leaving, too.
As Mashable points out, the issues Readability is running up against, and to a lesser extent, TinyGrab’s, are an ominous portent for what could happen on June 1 when Apple starts enforcing the subscription app rules on all apps, not just new ones. Clearly, cloud-based services that create a lot of great functionality for iOS devices -- Dropbox immediately jumps to mind -- are targeted by these rules, too. Dropbox operates in much the same way as TinyGrab by letting users pay for a premium account while utilizing Dropbox on multiple devices.
The end result is that the new rules could cause a major shake-up among developers in the App Store, especially among smaller developers who are unwilling or unable to jump through additional hoops in order to maintain iOS support. It seems that our worst fears about the new subscription rules are, in fact, true, and they could very well send a lot of iOS’s greatest apps heading over to Google’s (GOOG) Android camp.