Apple is now telling media companies to forget about the way they’ve been doing business for decades. There are new rules in its digital newsstand.
Is Apple's demanding a 30% cut fair? Hell no! It's excessive.
If the New York Times, Vogue or your hometown newspaper were delivered to your doorstep, it woud cost a lot for mailing or delivery--a lot more than what Apple's 30% vig.
Instead of paying the postal service or a deliveryman, the media outlets must pay Apple for delivery. Looked at that way, Apple's demand of a 30% cut is not out of line with the cost of traditional delivery.
But unlike the postal service or deliveryman, we're paying Apple to buy its means of delivery. At $500 to $1000 for an iPad and a few hundred for an iPhone, consumers are paying twice for delivery. Once directly to Apple and then again in the subscripton price of the publication.
Moreover, physical delivery of a publication costs a whole lot more than electronic delivery.
For Apple can get away with it, then its competitors will have to charge similar distribution fees.
Google (Android), HP (webOS), and Microsoft (Windows Phone 7)--the companies with the operating systems controlling the phones and tablets--probably won't charge this large a fee for distribution because they want to play catch up to iPad and get users. Hopefully, competition will keep Apple from becoming evil.
Ironically, the announcement of the new payment system was made on the same day that Apple surpassed Microsoft to be the most valuable tech company in the world.
Let me know what you think.