Apple announced yesterday what might have seemed to many a benign plan to offer billing for content subscriptions through the iTunes App Store, but music service Rhapsody says Apple asking too much.
In a statement yesterday, Apple claimed a “simple” philosophy, mandating that when Apple brings a new subscriber to the app, Apple earns a 30 percent share of that subscription and when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.
The catch is that Apple is requiring content providers to make the same offer available within the app that it makes available outside the app.
“All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app,” wrote Apple’s CEO Steve Jobs, in yesterday’s statement.
“Our philosophy is simple too,” explains Jon Irwin, president of Rhapsody in a statement. “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. The bottom line is 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 currently counts a subscriber base of 750,000 and users can download the Rhapsody app from for the iOS devices from the iTunes App Store. Rhapsody claims that Rhapsody subscriptions are available exclusively through Rhapsody.com.
Rhapsody says it will continue to allow consumers to sign up at www.rhapsody.com from a smartphone or any other Internet access point, including the Safari browser on the iPhone and iPad. “In the meantime, we will be collaborating with our market peers in determining an appropriate legal and business response to this latest development,” Irwin said.
