I’m trying not to think of Google as anxiously trying to do everything just like Apple, desperately hoping to earn Apple’s approval, like a little child trying to please a parent. I’m trying not to, but Google is making it hard when they make announcements within a day of Apple making announcements, or when they hold stage events in a poor imitation of Apple’s stage events.
Still, there’s substance today, as Google has their answer to Apple’s new subscription policies. Let’s pretend, as Google has, that this isn’t just a new feature for Google Checkout.
Overall, it seems that Google is taking the same approach with subscriptions that they’ve taken with Android and with Google TV, with mixed results. Namely, they’ve focused on working with the publishers (carriers, networks) rather than users. At first blush, that would seem to be the wise approach, since the publishers (carriers, networks) have the power. In practice, though, the ring of power answers to Sauron only, and he does not easily share his power. So Google TV is blocked by the networks, and the carriers are making money with Android while Google mostly isn’t. And into this we go again.
One big source of revenue for publishers is their mailing lists. Subscribe to most magazines and you’ll find yourself the target of an amazing amount of junk mail. Publishers are very aggressive about subscriber information, and Google is playing ball: your name, zipcode, and email address will be supplied to publishers if you use Google’s OnePass. None of that information is supplied to publishers by Apple. You can opt-out with OnePass, and you can opt-in with iTunes, so it might seem like a small thing, but I think the defaults reveal much.
The other big piece of news is that Google is “only” taking 10% for their share, one-third of Apple’s 30% share.
In many cases, that’s because Google is doing much less work for their 10%, but it does add a new wrinkle. With Apple’s subscription option, there seems to be more value Apple is providing than just the payment and user management. There seems to be the idea that publishers can provide their content to Apple, and Apple will manage delivering that content to subscribers, bearing the storage and bandwidth costs involved in the delivery. Google leaves delivering the content completely up to the publishers, providing only payment options.
Of course, Apple won’t be providing that service for everyone, so perhaps that’s a point of future compromise? Netflix will presumably continue to host their own video content, so maybe Apple will take a smaller percentage in exchange for providing fewer services? Amazon is unlikely to need or want any help from Apple, so perhaps a much lower percentage would work for them?
There’s much more that’s different about OnePass. Perhaps most importantly, Google’s offering applies to much more than just in-app purchasing. They only got in-app purchasing working for Android within the last few weeks, so their focus is still on web transactions. On the one hand, that makes OnePass seem far more complicated, but that’s the nature of Google products: If it makes sense to software engineers in Mountain View, it goes in the product.
Practically speaking, what does this mean for users and for publishers? Publishers will have to choose which product to use, or whether to use both. If they want to release an iPad version of their publication, it’s Apple’s 30%. For something like The Daily, an iPad-only publication, there’s no decision to make. If The Daily decides to expand to future Android tablets, Apple’s solution won’t work for them. But Google’s solution won’t work for them on iPad, either. So to be available on both, a publisher has to sign up for both.
Unless Google’s solution doesn’t specify no weblinks, as Apple’s does. If Android tablet apps are still allowed to use alternate payment methods, why would a publisher choose Google’s? Existing publishers surely have their own payment methods that given them the full customer details they want, and will be forced to use Apple’s method for iPad, but the only reason I can see for using Google’s is if Google forces them to, as Apple does.
It’s tempting to think it’s as simple as “10% beats 30%,” but it isn’t that simple at all, because 3% beats 10%, and Paypal’s subscription option only charges 1.9% to 2.9% plus 30 cents per transaction. This is the problem Google Checkout has faced from the beginning: why would anyone use Google Checkout instead of Paypal? There are a couple of small technical advantages, but are they worth more than triple the cost?
Perhaps Apple is to Google as Google is to Paypal. Apple has simple stated that publishers must use their service, and that’s that. Paypal appeals to the budget-minded. To whom does Google appeal? They have neither the installed base of 160 million devices (all linked to an account with a credit card!) that Apple has, nor the several hundred million accounts that eBay has, and I don’t believe Google Checkout is trusted as much as either Apple or eBay.