Yesterday Apple officially announced their new App Store subscription service, and we already new that some publishers were less than happy with this new service.
Now Rhapsody has released an official statement, and they are less than pleased with the new subscription service offered by Apple, and it looks like they intend to take legal action against Apple.
The new App Store subscription service means that publishers can still sell their own subscriptions direct, but they must offer these subscriptions through the app store as well at the same price or a lower price.
What this means is that Apple will take 30 percent of any subscriptions which are sold through the App store, and for many publishers, who already have tight margins this means that they wont be able to offer these services through the App Store any longer.
Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.
As you can see from the Quote from Rhapsody above, it looks like their service will probably be removed from the App Store, and we suspect many more publishers will also follow suit.
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