If you've picked read the news in the last 24-hours - from Billboard.biz to tech and national press - you may have noticed that Apple has set off a wave of fear and trepidation. Wednesday's news of Apple's decision to take a 30% cut from in-app subscriptions created an uproar that has continued into Thursday.
Last.fm co-founder Richard Jones summed up feelings of many people when he told MocoNews, "Apple just f****d over online music subs for the iPhone."
But there have been a few calmer reactions. Steve Purdham, president of U.K. music service We7, is taking a wait-and-see approach. "Thirty percent share makes music subscriptions economically unviable in their current form," he told MocoNews. "But, if we take some time, let the dust settle, I think we will start to see new and novel approaches to this new 'Apple Tax.' "
Note that Purdham uses the term "current form." It's an acknowledgement that music subscription services are in an embryonic phase of a very long journey. After all, who is to say that the current form of music subscriptions represents the end game? And was Apple really going to be a main driver of subscription revenue? Many digital music executives have said - many times - the key to subscription success is billing through mobile carriers and broadband providers. Only one company can bill a customer for a subscription service. If that company will be a telecom, it won't be Apple and that dreaded 30% "Apple tax" won't matter.
Forrester analyst Mark Mulligan also struck a calm tone as he looked for a strategic motivation to Apple's move. Mulligan believes the finder's fee will reduce "internal" competition for Apple's music offerings. "But perhaps most importantly this could be an effective pre-emptive strike against an Android music service beachhead on iTunes?" he wrote at his blog. "So the 30% levy won't kill off music subscriptions but it will be a major speed bump with the added benefit for Apple of moving some pesky competitor tenants of its front lawn."
Maybe so. If Apple is planning on launching video, magazine and newspaper subscription services, too, then Mulligan may have a point. But music services won't be the only ones to pay for finder's fee.
Mulligan did say "the levy hits subscriptions where it will hurt them most" because it mobile devices are a key driver to consumer adoption. So it's not like a 30% Apple tax won't hurt in the short term. But like Purdham, Mulligan was smart to think beyond the short-term pain and ponder what benefits could come from Apple's unpopular decision.