Debating Apple’s New Rules

In Episode 25 of the excellent Build and Analyze Podcast, Marco Arment discussed what he called “the new rules” of Apple’s App Stores. In essence, he argues that the rules and restrictions that Apple imposes on developers are the price we pay in exchange for getting access to great platforms like the Mac and iOS. Moreover, he notes that Apple may not always enforce the rules consistently or in a way that is to developers’ liking. Regarding developers, he says “any of our existing products or business models are not guaranteed to be permitted in the future. That’s it. At any given time, [Apple] could pull them away.” And he’s right. Short of violating the law or its contracts, Apple may do whatever it likes.

However, simple noting that Apple is free to do as it pleases misses an opportunity to have a productive discussion about what’s best for users, the platform, and Apple itself. Observing that Apple has many choices about how to behave should be the starting point of the conversation, not the end. Acknowledging the present situation isn’t enough — we need to make suggestions for the future.

In the past, I’ve argued that Apple’s rules regarding in-app purchase for items like magazine subscriptions and e-books were unwise. Of course Apple has the right to set those rules, but my point was that some of their choices were misguided. We’ve now seen Apple revise those rules to be somewhat less draconian. It’s a welcome change, and one that is likely to benefit Apple’s users in the long run. Of course, some people might disagree with me there, and that is the really interesting conversation I want to have: Not about whether Apple could, but whether it should.

Physical Media for Lion

A number of news outlets reported yesterday that Apple will distribute Mac OS X 10.7 Lion via the Mac app store. It’s a logical conclusion, given that they’ve distributed the Lion developer previews through the Mac App Store. However, it makes me wonder whether they’ll provide some kind of physical media as well. There are a number of scenarios where you want to be able to do a fresh reinstall of the OS, like a hard drive failure, or need to boot off another medium, perhaps to run Disk Utility on your startup drive.

Apple ships the MacBook Air with a Software Reinstall USB drive, which allows users to restore the machine to its original configuration without using an optical disc. The USB drive itself is quite small, and is a little flimsier than the kind of drive you might want to carry around with you. It probably costs Apple very little to make, and I’d say it’s a good candidate to be the physical media for Lion.

The big question in my mind is whether Apple will charge an additional fee to get Lion on a USB drive. It seems that the Mac App Store will be the preferred distribution method for Lion, although I imagine it will also be available stand-alone on USB or DVD. (After all, not everyone has the bandwidth to download a 3-4GB operating system.) There are three possible scenarios for App Store buyers:

  1. Apple provides Lion on USB for no extra charge. Upon installing and registering your copy of Lion, the OS asks for an address where you’d like the USB reinstall drive sent.
  2. App Store buyers pay small fee for Lion on USB. At some point in the process (in the App Store itself? upon registering?), you’re given a chance to buy a USB reinstall drive for a small fee, maybe $10 or $15.
  3. No physical media option. In this scenario, App Store buyers are out of luck when it comes to getting a physical copy. In order to get a USB install drive, you have to buy a boxed copy of Lion. This doesn’t seem particularly plausible to me, but it’s not outside the realm of possibility. One interesting permutation is that it may be possible to put the Lion installer onto your own USB drive manually.

If I had to place a bet, I’d go with option 1, but only by a hair. I certainly wouldn’t be surprised to see Apple pick option number 2.

Re-Styling the Washington Post

I’ve been reading the Washington Post via their web site for almost as long as I’ve lived in DC. While the Post’s site has never been known for its beautiful design, the recent updates are nothing short of awful. In particular, the home page now consists almost entirely of bold-face text. To my eyes, all the bold just makes the whole thing look like a giant advertisement.
So, I finally broke down and decided to see what I could do about it. I wrote some CSS modifications that cleaned the front page up nicely. Observe:

WaPo - Before

Before

WaPo - After

After

It’s not a huge change, but I find it much more readable. If you like the way it looks, please feel free to use the CSS yourself.  I’m using a Safari extension called User CSS to apply the CSS to all pages on washingtonpost.com. I’m sure there are similar extensions available for Firefox and Chrome. I set the domain to: http://*.washingtonpost.com/*

Here’s the CSS:

body {background-color: #eee !important;}
h1, h2, a {font-weight: normal !important;}
#content a {color: #057EC2 !important;}
#content a:hover {color: #66aad1 !important;}
ul.normal li {margin-bottom: 4px !important;}
p.heading1, p.heading2 {font-family: Helvetica, Arial, sans-serif !important;}

What if there were no Coke at Disney World? Or, Problems with Apple’s in-app purchase rules

Apple made a lot of waves last week with it’s announcement regarding In-App Purchases (IAP). They introduced two major changes. First, developers can now sell auto-renewing subscriptions on a weekly, monthly, or yearly basis. Second, Apple has revised the App Store Review Guidelines to require the use of in-app purchase in a number of situations.
I’m going to leave subscriptions aside for now and concentrate on the new App Store rules governing the use of in-app purchases. Subscriptions are important, but I think they’re just a part of the larger problem developing around IAP. Apple’s new requirements are as follows. Apps that allow you to use content purchased elsewhere, such as through a web store, must allow you to purchase the same content using IAP. Moreover, apps must offer that content via IAP at an equal or lesser price, even though Apple takes a 30% cut of all in-app purchases. Finally, apps may not include links to web sites or other “external mechanisms” though which the content can be bought without giving Apple it’s 30% commission. The relevant sections of the App Store Review Guidelines are below:

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 Apps that link to external mechanisms for purchasing content to be used in the app, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected.

Leaving aside any possible anti-competitive behaviors going, the biggest problem with Apple’s new rules is that they’re bad for customers, and thus they’re bad for Apple. Why? It’s all about customer choice.

Amazon’s Kindle app is a fantastic example. Until now, it hasn’t been possible to buy books through the Kindle app. Instead, the app includes a “Kindle Store” button that launches Mobile Safari with an iPhone-optimized version of the Amazon.com Kindle website. Users can then  search and browse for books. Upon purchasing a book, a button can direct the user back to the Kindle app, where the book will be downloaded and made available for reading.

Now, imagine the same app under Apple’s new rules. The Kindle Store link will be gone. Without it, most users will have no idea they can buy Kindle books through the Amazon website. Instead, the app will have a searchable list of books that can be purchased directly within the app. From a user experience point of view, it’s great.

So what’s the problem? It’s hard to imagine Amazon making any money this way. I’m no book publisher, but I’ve read that margins in the industry are quite low. Remember, Amazon must pay a substantial portion of the sale price to the book’s publisher. What’s left after the publisher’s cut and Apple’s 30% cut? Very little – perhaps not enough to make the Kindle app worth Amazon’s while. Ordinarily, we might expect the added costs from Apple’s 30% commission to get passed on to consumers via higher prices for books purchased within the app. But Apple has specifically banned that practice.

Instead, Amazon might choose to pull the Kindle app from the iPhone and iPad. That’s neither good for consumers nor good for Apple. Sure, consumers could still buy books through Apple’s own iBooks store, but generally speaking, the selection is worse and the prices are higher. Furthermore, you can’t read iBooks on anything but iOS devices. There’s no reader for Mac, Windows, web, anything. (I expect an iBooks reader for Mac one of these days, but that’s another matter.)

John Gruber tweeted this analogy:

App Store : Apple :: Disney World : Disney They make money on everything you buy in the park.

It might be a fair analogy, but it doesn’t mean it’s good for customers. Suppose that Disney charged a fee on every Coke sold at Disney World, but also required that the price of a Coke in the park be the same as the price of a Coke at your local gas station. If the fee were high enough that Coke couldn’t make money, they’d just stop selling soda at Disney World. Coke and Disney don’t care; they’re raking in so much money elsewhere that they probably wouldn’t even notice the lost sales. It’s the visitors to Disney World who suffer – they can’t buy a Coke when they want one.

Likewise, these new IAP rules are bad for Apple. Neither Apple nor companies like Amazon will notice much in the way of lost sales. The people who get screwed are the customers, who suddenly aren’t able to buy the products they want. Sure, they get a better user experience from those developers willing to play Apple’s game, but they’ll be missing out on critical content. If I can’t buy the book I want on my iPad, what good does it do me that the user experience would be better, if only they carried my book?

Certainly nobody, not even Amazon, is going to abandon iOS overnight. But clearly, Apple is in the iOS business for the long haul, and it’s still early enough that they could falter with serious consequences. Thankfully, there’s an easy fix – charge less. Apple’s original justification for the 30% commission for apps is that it pays for the (substantial) overhead involved in payment processing, storage, and bandwidth to send apps to customers. For in-app purchases, however, only payment processing is relevant. (For example, Amazon’s library of Kindle titles isn’t stored on Apple’s servers or downloaded through their network.) To solve the problem, Apple needs only to reduce their commission on in-app purchases to something more in line with a credit card processor — maybe 5%.

Apple’s policies for the App Store have a way of starting out sounding draconian and relaxing over time. Hopefully we’re in the first stage of that process, and Apple will come to their senses sooner rather than later.

99¢ TV Rentals from NBC

AppleInsider reported yesterday that NBC strongly opposes Apple’s 99¢ price point for TV show rentals. Though NBC offers shows for purchase on iTunes for $1.99 ($2.99 for an HD version), NBC Universal CEO Jeff Zucker was quoted as saying 99¢ rentals “would devalue our content.” Putting aside the reasonableness of this position, NBC’s credibility on the issue is pretty weak. Why? They’ve caved on iTunes pricing before.
Think back to late summer 2007, when NBC pulled all of its content from iTunes after Apple refused to increase the per-episode price to $4.99. At the time, NBC shows accounted for 30% of TV show sales on iTunes. A year later, NBC was back on iTunes at the same price point, along with HD versions for $2.99. Apple held their ground on pricing, and NBC backed down. Apple doesn’t need NBC shows. People will still buy iPods and iPhones, and even Apple TVs, without 99¢ TV rentals from NBC. Might Apple sell more devices if they had NBC on board? Sure. But something tells me they aren’t wetting their pants about waiting NBC out on this one.

Boxee Box vs. Apple TV

I’ve been thinking about buying some kind of Internet-connected TV set-top box, for movies and TV shows, for quite a while now, but I recently took the plunge and pre-ordered the new Apple TV. I’ve avoided buying a Blu-ray player, because I don’t want to buy a whole new set of (more expensive) discs when it seems like a fully disc-less future is right around the corner. Both Apple TV, shipping in the next 2-4 weeks, and the Boxee Box, which entered pre-orders today, seem to fit into the new no-disc world I’m looking for.
Conceptually, the two share a basic idea: stream content from the Internet or, in the case of Apple TV, other devices, to your TV. They’re both pretty small boxes that sit unobtrusively on a shelf. Originally, I thought I might go for the Boxee Box, which just entered pre-orders, but in the end, I thought Apple TV was a better fit. Here’s why:

Content I Want
Apple TV gets most of its content from iTunes. You can rent and stream movies and TV shows from the iTunes store, and they’ve got a decent selection to choose from. My guess (and Apple’s) is that the catalog of TV shows available to rent at $0.99 per episode will expand over time. That’s certainly been the case with the library of music and movies. You can also stream movies and TV shows from other Macs and iOS devices in your home. (More on that in a minute.) Finally, Apple TV can play movies available for instant watching from Netflix. I can already do that with my TiVo, but it’s a nice perk to have it integrated with the Apple TV as well.

Boxee, on the other hand, streams content from online video sources. It sports and impressive library of TV shows available to stream instantly. However, most of those shows come directly from ad-supported sites run by the networks that produced the show – NBC, TBS, etc. I don’t mind ads all the time, but I want the option of paying for content without them. Moreover, Boxee doesn’t seem to offer a movie library at all, although like Apple TV, it does integrate with Netflix and allows you to play videos from your computer.

Sadly though, those movies and TV shows from iTunes won’t play on the Boxee Box – they’re protected by Apple’s copyright protection. Nobody loves DRM, but it seems it’s a necessary evil for now, and if I have to buy copyright protected-content from somewhere, it’ll probably be from iTunes. I also keep my music and movies in iTunes, and I want a box that connects seamlessly to iTunes running on my computer. That means Apple TV.

Other Devices
Both Apple TV and Boxee Box can play music and videos stored on your computer. However, Apple as taken things one step further. Starting with the release of iOS 4.2 for iPhone, iPad, and iPod touch, you’ll be able to stream video from your mobile devices to your Apple TV. That means I can download or rent a movie on my phone and play it on the big screen with my Apple TV. More enticingly, anecdotal reports suggest that streaming from iOS to Apple TV isn’t limited to iTunes content, suggesting the possibility of streaming all sorts of video content, from YouTube to live MLB games from the MLB app.

Price
The new Apple TV is $99, while the Boxee Box is $199. I could buy or rent a lot of movies and TV shows on iTunes with the $100 difference — and none of them would have ads.

Open Standards

I’ve seen quite a few blog and Twitter posts complaining that the live video stream of today’s Apple media event is available on Mac OS and iOS only. Moreover, some people seem to be upset because Apple claims to be using “open standards.” Most of these complains are something along the lines of “What good are open standards if you can only access them from Apple products?”
Apple is the first to admit that the live stream is only available on Apple devices, and only a subset of them at that:

Viewing requires either a Mac® running Safari® on Mac OS® X version 10.6 Snow Leopard®, an iPhone® or iPod touch® running iOS 3.0 or higher, or an iPad™.

But that’s not the end of the argument. I think what people are complaining about is the use of the word “standard.” Surely, anyone can comply with the open HTTP Live Streaming specification, though it is probably not 100% finalized. It is not, however, standard. The word “standard” implies wide use and acceptance, and although HTTP Live Streaming will probably become a true standard eventually, it’s not yet a standard today.

I think Apple is using the term the way most people understand it, however. “Open standard” has come to mean something more along the lines of “not closed and proprietary.” The point is not how commonly it is used, but whether it could be used by anyone who wished to develop software using the proposed specification. The more widely it’s used, the more “standard” it becomes. Applying the word “standard” only to software already in wide use does little more than make “standard” synonymous with “old” or “outdated.”

One last note about Apple’s choice of HTTP Live Streaming for the media event today: streaming live video is a tricky business. Back in the day, Apple had all kinds of trouble with video streams of keynote addresses – they’d break down from high traffic, and were often of fairly terrible quality. Especially since this is the first live stream they’ve done in a while, I’d expect Apple to pick the technology they were most confident would work well. In fact, that’s always Apple’s MO: use the best technology available to deliver the best user experience. If there are side effects of those choices that people don’t like, tough. That’s just how Apple works.

Say it ain’t so, HBO!

Bloomberg reported yesterday that HBO has rejected Netflix’s offers to stream content through the Netflix video on demand service. Instead, HBO plans to concentrate on their HBO Go service, for which they plan an iPad app in addition to offering video on demand through some cable systems. Responding to questions about HBO’s desire to go it alone, president Eric Kessler responded, “There is value in exclusivity.”
Perhaps there is, but sadly, HBO is leaving some of that value on the table, because HBO Go is only available to current subscribers to their cable channel. I watch a couple of HBO shows, but not enough that I’m willing to subscribe to their premium cable channel. In fact, I’d really like to get rid of my cable subscription altogether, a goal that’s getting more realistic by the day with services like Netflix, Hulu Plus, and iTunes. But HBO apparently isn’t interested in customers like me. If  don’t have cable TV service, HBO won’t allow me to buy a subscription to HBO Go, even if I were willing to pay the full price of their premium cable channel.

Now, in my ideal world, HBO would offer episodes for sale a la carte through iTunes, the way most other TV shows (and some of HBO’s back catalog) are sold. But I can imagine how their subscription model, in which you have to buy the whole package, makes sense for them and provides some guaranteed income. The problem is, the subscription model doesn’t need to rely on cable TV. Just saying “we have an iPad app” isn’t going to help very much when those iPad users start deciding that they no longer want to pay Comcast $50/month for shoddy service. iPad owners likely to be the first ones to ditch their cable subscriptions. Why not let them pay for the content, even if it’s on a subscription basis, regardless of whether they have cable?

Web apps vs. iOS apps

Craig Hockenberry, in a post on A List Apart, on web apps vs. iOS apps:

iTunes offers you a simple way to charge users for content. It can be a one-time payment via app purchase, or a recurring payment (such as a subscription) with in-app purchases. In either case, a customer only has to tap on a buy button and enter their password. Apple handles all the payment processing and accounting. You just wait for bank deposits from around the world at the end of each month.

My guess is this has a lot to do with it. As Hockenberry also points out, it’s easy to pay for things on the App Store. There’s no typing of credit card numbers and billing zip codes. Just enter your iTunes password, and you’re done. Easy as pie.

Google App Inventor

NYT’s David Pogue recently got a chance to try out Google’s still-in-beta App Inventor. He finds that it includes a fair number of bugs and also very much overhypes the claim that it “requires NO programming knowledge.” Neither of these surprises me a whole lot. Bugs are to be expected, and forgiven, in beta software – that’s what the “beta” means. So, too, is the fact that some level of programmer-savvy is required. You may not need to know the ins and outs of a language’s syntax, but familiarity with basic programming ideas seems like a reasonable requirement. I can’t think of any product that has successfully gotten around the need to understand basic software development concepts. (Hypercard is the closest approximation I can think of.)
No, to me the most interesting point is Pogue’s experience with devices:

Above all, a would-be App Inventor app inventor must contend with the differences in every Android phone model. The Droid X phone I was using, for example, refused to communicate with my computer until, at the suggestion of a Google technician, I changed the U.S.B. connection mode to exactly the opposite of what the tutorial recommended. Eventually, Google plans to provide pointers to the quirks and eccentricities of each phone.

This is exactly why I’m not interested in becoming an Android developer, and it’s something that doesn’t seem to get much attention. Even if Google could work out the bugs associated with odd USB settings and other hardware quirks, you’re still fundamentally dealing with a ton of different configurations. Does the device have a hardware keyboard, or not? What size and resolution is the screen? Does it support multi-touch? Does it have a scroll wheel/scroll ball? How fast is the processor and how much memory is available? What version of Android is it running? That’s just the beginning of a long list of problems for Android that Google doesn’t seem to have any plan for addressing.