New Apple App Store Rules Could Hurt Pandora
App Store Changes Get The Attention Of Justice Dept., FTC
February 22, 2011 at 11:45 AM (PT)
ALL ACCESS reported last week (NET NEWS 2/16) that RHAPSODY was complaining about APPLE's newly instituted rules for iPHONE and iPAD app subscriptions. Now, THE NEW YORK POST reports "PANDORA is feeling the sting of APPLE's app slap."
The new rules on the APPLE store change the way the app developer or publisher are paid. When an app user buys a subscription through that app, the developer or publisher is required to give APPLE 30% of the subscription revenue -- just like APPLE takes a 30% cut from all app sales in the App Store.
Reports have the Justice Department and the Federal Trade Commission have begun a preliminary look into APPLE's app policy.
With APPLE's App Store being a large part of PANDORA's subscription sales, the POST notes, "PANDORA is seen as vulnerable to APPLE's policies, and the subscription shock could affect its bid to go public, according to a source close to PANDORA's IPO process."
PANDORA filed a registration statement on Form S-1 with the U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") relating to a proposed initial public offering of shares of its common stock two weeks ago (NET NEWS 2/11)
"I think it could delay the PANDORA IPO," said a POST source, who is connected with one of the underwriters of PANDORA's public launch. "APPLE has crossed the line. They are either going to have to walk this back, or face enforcement action or a lawsuit."
Steve Jobs Responds ... Kinda
WIRED.COM reports that APPLE honcho STEVE Jobs tried to clarify APPLE’s 30% app surcharge when he responded to the concerns of a software-as-a-service (SaaS) developer by asserting, "We created subscriptions for publishing apps, not SaaS apps" -- which may (or may not) exempt PANDORA.
Read his full response here.