Sidestepping Apple: From Amazon to Conde Nast, Companies Rethink App Strategies
We all knew that once Apple starting enforcing new rules for in-app purchases, it would change how media companies do business on the iPhone and iPad. Now, we're beginning to see just what that looks …
Context & Ripple Effects
The enforcement of Apple's in-app purchase rules lands a year after Conde Nast publicly insisted new guidelines would not stop its Wired magazine iPad app, and months after regulators began eyeing Apple again over its App Store conduct in February 2011. With rules now being enforced rather than merely announced, media companies that had assumed a grace period are choosing between Apple's commission and workarounds.
First-order effects
- Publishers such as Conde Nast lose the ability to run their own subscription checkout inside iPhone and iPad apps, forcing each title to pick between handing Apple a share of revenue or steering buyers off-device.
- Amazon faces the same fork for content sold through its iOS apps, making Apple's storefront terms a live pricing input for every digital-goods business on the platform.
Second-order effects
- Apple's enforcement raises the strategic value of rival devices: Amazon's reportedly upcoming tablet — said to use a two-finger touchscreen, though unconfirmed — doubles as an escape hatch for content owners unhappy with iOS economics.
- Sustained pushback from major publishers gives the regulators who were already examining Apple fresh evidence that App Store terms function as a tax on digital commerce.
Third-order effects
- If sidesteps scale, iOS apps drift toward free content-and-marketing shells while transactions migrate to the web and non-Apple platforms, eroding the App Store's role as the default billing rail for media.
- Platform gatekeeper leverage becomes the defining negotiation between app stores and large content owners, setting the template for how every subsequent hardware-software gatekeeper prices access to its users.
The trend: Mobile platforms are asserting control over in-app payments, pushing major media and retail companies toward multi-platform distribution strategies that route around gatekeeper commissions.