Business

Will Apple Charge Music Sub Services 30 Percent or Won’t They?

The oracle of Cupertino has spoken once again, revealing more about Apple’s plan to charge certain developers of subscription apps 30 percent of revenue for selling subscription apps within the iTunes App Store in (yet again) a single line to an e-mail. However, the future for music subscription services like MOG, Rhapsody, Napster, Rdio, and […]
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The oracle of Cupertino has spoken once again, revealing more about Apple’s plan to charge certain developers of subscription apps 30 percent of revenue for selling subscription apps within the iTunes App Store in (yet again) a single line to an e-mail. However, the future for music subscription services like MOG, Rhapsody, Napster, Rdio, and Spotify remains hazy.

Here’s what Jobs wrote in an apparent attempt to clarify Apple’s earlier announcement that it would charge developers 30 percent when people bought new subscriptions to app-delivered content within iTunes. He apparently wrote this in response to a question from a developer of software-as-a-service (SaaS) apps, who worried that apps which allow the user to log-in to a paid service — as opposed to buying some form of media — would be subject to the fee (via MacRumors):

We created subscriptions for publishing apps, not SaaS apps.

This response is fairly vague even in response to the SaaS issue, because who cares what Apple created this subscription plan for? What matters is how it intends to apply the new rule going forward.

But even assuming that Jobs meant that software-as-a-service apps will be exempt from tithing 30 percent of each subscription to Apple, this is a non-answer when it comes to music subscription apps.

Running a music service involves both publishing (as in publishing a song) and SaaS (as in allowing users access to software with which they can access their cloud-based music collections), so they still might or might not be subject to paying this percentage.

Evolver.fm has asked Apple for clarification on this point, but for now, Jobs’ attempt to illuminate the situation has left it as murky as it was yesterday.

One thing is clear, however: If Apple does charge music subscription services 30 percent for selling their subs in iTunes, they will almost certainly lose money on each subscriber.

That is not Apple’s problem. In fact, it could pave the way for a profitable Apple music subscription — relatively speaking.

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