Oh, Snap! Apple Is Punking the Music Industry, Again

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Want your subscription music service on the App Store?

Fine, then Apple gets a cut of the subscription revenues that they help to generate.  Sounds reasonable enough, right?  Just this week, Steve Jobs laid out some rules for subscription partners.  “Our philosophy is simple: when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Apple CEO Steve Jobs.

And, no funny business: companies can’t offer sweetheart subscription deals that bypass Apple.  The terms have to be equal or better on the App Store.  This will probably extend towards music services.

And the problem with this?  Music subscription services can’t afford it, that’s the problem.  Because they’re already getting doubly bent over on licensing charges.  In fact, Billboard just mentioned that charges actually double for mobile apps.  But without content, these services would have nothing.  And without Apple, they wouldn’t have an iPhone app.  So what gives?

Well, music subs are starting to freak out.  At Midem, one executive told us that a 30 percent chop would simply be unafforable, and kill their plans for ubiquity.  But even without the 30 percent charge, most of these services are struggling to gain traction.  Maybe it’s too early, but players like Rdio, MOG, and others are getting soggy initial traction.  And with hair-raising, $17 million funding blasts, do you think labels want to give companies like Rdio a break?

Meanwhile, Apple’s own cloud-based launch is looming – and of course, Apple keeps its 30 percent subscription fee.  See the evil genius?