PayPay VP Sam Shrauger: Apple’s new subscription rules will stunt iPad 2 popularity

Fri, Mar 4, 2011


While¬†most of the fallout from Apple’s new in-app subscription guidelines seems to have subsided, it’s not all quiet on the western front just yet. Remember, publishers, critics, and users alike expressed unmitigated anger at Apple seeking to get a 30% cut from all subscriptions that originate from an iOS app. In the wake of that announcement, a number of companies, most notably music services like Rhapsody and, have bluntly stated that they can’t sustain an iOS subscription-based service under Apple’s rules.

Speaking on the issue, PayPay VP of global product and experience Sam Shrauger recently blogged that Apple’s new guidelines may make the iPad 2 more of a dud than another Apple success story.

“We have heard from a number of publishers since last week who are outraged at Apple’s 30 percent cut,” Shrauger wrote.

“Publishers need an easy way to monetize their content while also retaining information about their readers across multiple platforms. With Apple’s subscription service, publishers lose both these controls and have few options. They can charge consumers more, withdraw from the Apple apps store or continue status quo, knowing they’ll make far less money. This simply doesn’t work in the long run.”

In the long run, hell, even in the short run, the iPad is more about consumers than publishers. Indeed, Apple’s new in-app subscriptions will provide consumers with the easiest way fathomable to sign up for and cancel subscriptions. Besides, much of this discussion may really be misplaced. Apple COO Tim Cook noted at Apple’s shareholder meeting last week that publishers are primarily concerned with Apple’s opt-in option for consumers to divulge their personal details. For decades, publishers have made use of subscriber information to sell ads and even as a commodity itself.

And for what it’s worth, Shrauger himself notes that he’ll be in line to get a brand spankin’ new iPad. So if even Shrauger, who understands and has a stake in the aforementioned issue, is iPad 2 bound, why assume the average consumer would operate any differently?


2 Comments For This Post

  1. Jared Says:

    There is another possibility: all of these content providers unwilling to change their business models will stand their ground while independent publishers start to provide new sources of content directly to consumers via the App Store, and get big, and then it’s too late for the big players to do anything about it. cf. Twitter, Facebook, Pandora, etc. who came out of nowhere — the entrenched players would never do something so big and disruptive.

  2. lightsource Says:

    Sounds like a trash-talking head scared out of wits by Apple’s incoming payment service to compete with PayPal.

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