Apple's new subscription model: Pros and cons

Apple's move may force digital publishers and content providers to think about continuing to offer apps for iOS devices.

By Ian Paul, PC World |  Mobile & Wireless, Apple, IOS

Major publishers might be upset over Apple's subscription model, but it could be a huge advantage for smaller publishers that don't have any content royalties to pay. If you wanted to create your own magazine or local newspaper, for example, having an in-app subscription model makes it that much easier to introduce people to your product and encourage them to subscribe.

Highly Unfair To Music and Video Businesses

Sharing profits with Apple isn't so bad if you own what you're selling -- news content, for example. Apple is footing the bill for all that iOS infrastructure to sell your app, so giving Apple a cut is inevitable. But subscription-based companies that have to pay royalties on content such as music (Rhapsody), TV shows (Hulu) or movies (Netflix) could end up getting screwed in the deal. "An Apple-imposed arrangement that requires us to pay 30% of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable," Rhapsody said in its statement.

Marquee names go out?

Apple will apparently require Amazon to remove its "Shop in Kindle Store" link from the bookseller's iOS app, according to Computerworld. Amazon already prices many of its Kindle books below the cost of buying the same content on Apple's iBooks app. Under the new rules, not only would Amazon have to undercut its competitor, but Amazon would also have to turn around and give Apple a 30% cut of its eBook sales.

Companies such as Amazon and Netflix haven't made any public statements about Apple's new subscription model yet. But you have to assume they're thinking long and hard about this new policy and whether they should pull out of iTunes altogether.

DRM is Evil

Amazon Kindle books are locked down with digital rights management technology so you can't read a Kindle book on anything but a Kindle app. You probably thought you were safe doing this since Amazon's Kindle software is available on almost every digital platform you can think of. But what happens if Amazon pulls its iOS Kindle reading app in protest over Apple's new policies? You didn't bank on a spat between Amazon and Apple did you?

If you've got a growing library of Kindle books on your iOS apps, but no physical Kindle device, that means you'll be reduced to reading Kindle books on your PC or Mac if your Kindle app stops working. Amazon's DRM digital locks mean you can't transfer Kindle books to another e-reading app such as Stanza or eReader. Eventually, Amazon's Web app will let you read full Kindle books online, but it's not ready yet.

Originally published on PC World |  Click here to read the original story.
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