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Apple's taking 30 percent of app store subscriptions is an unkind cut

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The Washington Post's Anqoinette Crosby runs down the day's headlines and talks with the Capital Weather Gang's Jason Samenow about the Aurora alert and Tech columnist Rob Pegoraro talks Apple subscription issues.

The picture isn't much brighter for electronic bookstores such as Amazon's Kindle (which, coincidentally enough, competes with Apple's own iBooks). It's even worse for interactive music services, which already face tight business margins thanks to the royalties they must pay to record labels, composers and performers.

Representatives for Netflix, Hulu and The Post declined to comment. Publicists at Amazon and the Ongo news service (as well as Apple itself) have yet to reply to e-mails sent Tuesday morning.

Some publishers seem content to accept Apple's terms, factoring in the high costs of acquiring subscribers. But Time Inc., has already given up on Apple and is instead bringing publications like Sports Illustrated to Google's Android and HP's webOS.

The Rhapsody music service openly objected Wednesday, suggesting that it would yank its application from the App Store rather than submit to Apple's 30 percent tax.

Apple's main public justification for that steep rate consists of a quote from chief executive Steve Jobs in its news release: "Our philosophy is simple - when Apple brings a new subscriber to the app, Apple earns a 30 percent share."

That could be true for a small magazine publisher that few people will necessarily trust with their credit cards. But for the likes of Netflix or Amazon (or even, perhaps, The Post), Jobs's quote evokes a rooster taking credit for the sun rising.

Apple didn't have to take this route. It could have made App Store billing an option or taken a smaller share.

Google provided one example Wednesday, when it launched its own subscription feature called One Pass that takes care of billing and subscriber authentication across multiple devices. In that, Google will keep 10 percent of the proceeds.

It's difficult to regard Apple's extortionate arrangement as a benefit to anybody but Apple.

And yet since I wrote the scathing blog post this column is based on, readers have been jumping to Apple's defense. Why?

Some say that it's a free market and that companies will only charge what the market can bear. But under that logic, how can anybody ever call something overpriced? Would you accept that defense if it came from OPEC? Your cable company? This newspaper?

The other response is to say that Apple deserves to get a cut of the proceeds when somebody makes money off its platform. I know this argument well: I'm used to hearing from people in the entertainment industry who want record labels and movie studios get a cut of any possible reuse of their content.

Apple users, however, should know why it's unhealthy to bill for every last bit if they've ever used iTunes or an iPod to listen to music copied from a CD.

This statement also neglects how the efforts of third-party developers have made Apple's devices more valuable - something I believe Apple has mentioned in more than one ad.

Remember, Apple doesn't come to this debate with a history of upstanding behavior. It has repeatedly abused its oversight over the App Store - the only easy way to add third-party programs to the iPhone and iPad - to reject or evict programs for illogical, inconsistent or unfair reasons.

Apple does a lot of things better than other tech companies. I know-I've repeatedly spent my own money on its computers and software. That doesn't mean it's stopped being a for-profit company that merits reasonable skepticism from the rest of us.


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