In what looked like a case of digital good cop, bad cop, Google on Wednesday announced a payment service for digital content that seems more publisher-friendly than Apple's heavy-handed, high-commission terms for its App Store subscriptions.
Google's One Pass service, aimed primarily at web sites, will allow publishers "to customize how and when they charge for content while experimenting with different models to see what works best for them," wrote Lee Shirani, director of business product management at Google Commerce on the company's blog.
Twenty Percent Less
Google will keep only 10 percent of payments made through its Google Checkout system that users access by signing in through Gmail accounts. One Pass was announced by Google CEO Eric Schmidt at Humboldt University in Berlin, where he was joined by several German publishers.
One Pass will cover subscriptions, metered access, free content, or single articles from publishers' web sites or apps.
That's in contrast to Apple's announcement requiring publishers who provide content via its iOS platform on iPhones, iPads or the iPod touch to offer access only through the App Store, rather than diverting to an outside site. Apple will collect a 30 percent fee from each transaction.
That requirement also gives Apple access to subscriber information for its own marketing, an increasingly valuable asset as the mobile advertising industry matures.
Apple's rules don't prevent publishers from offering independent access so long as there is a conduit via Apple at the same price or lower.
Music subscription service Rhapsody, which says it has 750,000 subscribers, cried foul the loudest with President John Irwin calling that requirement "economically untenable." "The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple's 30 percent monthly fee vs a typical 2.5 percent credit-card fee," he said.
Top Sales Rep
Industry analyst Gerry Purdy of Mobiletrax said that while developers and publishers will understandably be irritated by Apple's new policy, they would have to acknowledge that Apple generates more business for them.
"They'll cry all the way down to the bank to make their deposits," Purdy said. "Apple isn't saying every sale you make, you have to pay us; they are saying go ahead and make your own sales, but if you do, you have to have an app because we want to add to the sales volume."
Purdy said the growing ubiquity of iOS on devices like the iPad, 14 million of which were sold last year, essentially makes Apple one of the world's leading sales representatives for publishers.
"A publisher can say 'I've never paid more than a 15 percent commission,' but Apple can say 'I'm the best, you have to pay more,'" Purdy said.