Apple’s new subscription policy opposed

Apples’ new subscription scheme demands that now all content providers must pay hefty cuts to the company. Content providers for Apple’s iPhone and iPad have strongly opposed the company’s move to charge them 30 percent of the revenues earned.

The move would mean that whenever a customer subscribes to music, movie, newspaper or an ebook publisher via iPhone or iPad that particular publisher which gains the customer has to pay 30 percent of what it will earn from the customer. The move is seen as an untenable one by subscription providers.

Rhapsody, a music service provider is the first one to call foul. The music service that can be accessed from Apple’s iPhones and i Pads prefers the old system of charging 2.5 credit card fees preferable to a monthly charge of 30 percent of revenue earnings. They are planning business as well as legal action against Apple’s decision.

Though Steve Jobs clearly states that they want 30 percent cut only when Apple brings a customer to the subscription and that Apple does not want anything in the case where the publishers of the content subscription bring in a customer. Yet 30 percent is perceived as very high in comparison to others, such as Wal Mart that charges only four percent. The margin is razor thin in digital content and the content providers have objected to Apple’s move.