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Readability maker Arc90 isn't happy with Apple's App Store subscription plan

February 21, 2011 |  1:12 pm

Arc90, the maker of the Web app Readability, is not pleased with Apple's new App Store subscription plan.

The problems? Apple rejected the Readability iOS app. And the 30% cut of revenue for subscriptions sold through its App Store is the same cut that Readability takes when it charges its users for its service.

Richard Ziade, a co-founder of Arc90 and the creator of Readability, posted a letter on both Arc90's and Readability's blogs, titled "An Open Letter to Apple" venting the frustrations of the app company.

The publicly issued complaint from Ziade is a bold one. The two companies have been on good terms, with Apple using Readability to power a feature in the latest release of its Safari Web browser called Safari Reader.

Ziade, in the letter, addressed the relationship:

Dear Apple:

It's your friends from Readability. Remember us? You put our technology into your Safari browser last year. We're writing this open letter because – well – we're a little upset right now.

Last Friday, you notified us that our Readability iOS application was rejected.

Readability's iOS app was rejected due to a policy in Apple's iOS guidelines, which says, "Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected," Ziade wrote.

Apple said last week, when it announced its App Store subscription service, that subscriptions sold in-app were all handled by Apple. Publishers and developers are allowed to offer subscriptions outside of any iOS apps, but any rate in-app must be the same or better than what's available outside of the app.

If an app doesn't offer a subscription in-app and through Apple, it will be rejected.

Ziade wrote in his letter that Apple's explanation of what will or won't be rejected isn't clear, stating:

We're obviously disappointed by this decision, and surprised by the broad language. By including "functionality, or services," it's clear that you intend to pursue any subscription-based apps, not merely those of services serving up content. Readability's model is unique in that 70% of our service fees go directly to writers and publishers. If we implemented In App purchasing, your 30% cut drastically undermines a key premise of how Readability works.

Apple touted its subscription service as an opportunity for publishers of music, videos and written content (such as news agencies). But Arc90 isn't technically a publisher.

Readability enables users to, with the click of a button, pull the words found on Websites into a text-only format, free of ads, photos and embedded videos, for what Arc90 calls "distraction-free reading."

To use the Readability app in browsers such as Apple's Safari, Google's Chrome or Mozilla's Firefox, Arc90 charges a subscriber fee of at least $5 a month. Of that monthly fee, Arc90 retains 30% for itself, passing on the other 70% to content publishers that are registered with the company.

If Readability sells subscriptions in its iOS app and through Apple, under the current App Store subscription terms, Apple would get its 30% cut before either Arc90 and any Readability-registered publishers get their respective shares of revenue.

Ziade called Apple's policy greedy:

Before we cool down and come to our senses, we might as well share how we're feeling right now: we believe that your new policy smacks of greed. Subscription apps like ours represent a tiny sliver of app sales that represent a tiny sliver of your revenue. You've achieved much of your success in hardware sales by cultivating an incredibly impressive app ecosystem. Every iPad or iPhone TV ad puts the apps developed by companies like ours front and center. It was a healthy and mutually beneficial dynamic: apps like ours get exposure and you get to show the world how these apps make your hardware shine. That's why we're a bit baffled here.

To be clear, we believe you have every right to push forward such a policy. In our view, it's your hardware and your channel and you can put forth any policy you like. But to impose this course on any web service or web application that delivers any value outside of iOS will only discourage smaller ventures like ours to invest in iOS apps for our services. As far as Readability is concerned, our response is fairly straight-forward: go the other way… towards the web.

In the letter, Ziade did offer Apple a bit of a compromise, writing:

P.S. We'd we be glad to deliver Readability for iOS – with in-app purchasing – if you'd carve out 70% from your 30% fee and share it with writers and publishers, just as we do.

Officials at Apple and Arc90 were unavailable for comment.

RELATED:

Federal regulators looking into legality of Apple's App Store subscription service

Apple users unlikely to share their personal data with publishers, observers say

-- Nathan Olivarez-Giles

twitter.com/nateog

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