Readability App Creator Says Apple's Subscription Policy 'Smacks of Greed'

By Features FOXBusiness

Apple's new policy for subscriptions on its "iDevices" is already creating bad feelings among app developers, as the creator of Readability said it "smacks of greed" in an open letter on the company's blog.

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Upon having the Readability app rejected from the App store, creator Rich Ziade wrote that while the company believes Apple is within its rights to enforce its new policy, it will discourage smaller companies from investing in apps for Apple's iOS devices like the iPad and iPhone.

"We’re obviously disappointed by this decision, and surprised by the broad language. By including 'functionality, or services,' it’s clear that you intend to pursue any subscription-based apps, not merely those of services serving up content," he wrote.  "If we implemented In App purchasing, your 30% cut drastically undermines a key premise of how Readability works."

Apple's new subscription policy restricts how much companies who provide subscription-based apps on Apple devices are allowed to charge for the same services outside of the app.  The companies must provide in-app subscriptions for the same price or lower than outside of the app.  And Apple receives a 30% cut of the revenue from in-app subscriptions.

But Readibility's subscription model is unique because of the service it provides.  Readability strips down content from the Internet to pure text, removing advertisements and other elements, to make stories easier to read.  In turn, the company gives 70% of its subscription revenue to publishers and writers of the content to make up for the lost ad revenue.

If Apple took 30% of Readability's subscription revenue, there wouldn't be much left over for Readability.

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Ziade wrote that before this policy, there was a "mutually beneficial dynamic" between app developers and Apple, where the apps created by companies were given great exposure, while Apple enjoyed the spotlight  on its hardware they all run on.

Readability's response, said Ziade, will be to "go the other way... towards the web" instead of devoting resources to developing apps for Apple's iOS platform and he expects other developers will do the same.

As a compromise, however, Ziade said his company would be willing to go along with the policy so long as Apple took 70% from the 30% fee it charged and shared it with publishers the way Readability does.

Apple's new policy has recently drawn scrutiny from government officials, as the Wall Street Journal reported last week antitrust authorities are looking into whether the company is violating any laws by pushing customers to subscribe through its App Store instead of from outside where Apple would not take a cut of the revenue.

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