Apple rejects Readability due to subscription policy -- where will it end?

Readability simplifies websites for easier reading. It's a service which strips online articles of annoying jiggly-belly ads and other distractions, puts that content into a very readable format, and delivers it to you in Safari or on mobile browsers. Readability was so loved by someone at Apple that it was even put into Safari. Unfortunately, you won't see a Readability app in the App Store. Why? Readability requires a $5-a-month subscription. Your $5 a month doesn't just go to the developers -- they take 70 percent ($3.50) of your monthly fee and give it back to the writers and publishers of said content. Seems like a simple, elegant solution to the clutter on the web, doesn't it? Content is delivered, but a software service declutters that content for a price. According to Apple, this constitutes a content app with a subscription fee, and under section 11.2 in the app guidlines:

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected.

Thus, Readability will not appear in the App Store -- it was rejected by Apple, citing the above clause. In a rather scathing open letter to Apple, the developers behind Readability point out that tiny shops like theirs charge tiny subscription fees, a "tiny sliver of app sales that represent a tiny sliver of your revenue." Now the big question: Where will this end? Content is one thing -- Amazon and others charge publishers various fees to publish their content on their stores. Functionality is an understandable use of in-app purchases, like buying more guns or Smurfberries, enabling you to do more things within an app. But services? One huge problem, and a recurring one for the normally tight-lipped Apple, is what constitutes a "content-based" app.

Charging for services, especially when we start discussing "software as a service," and as pointed out in this article on TechCrunch, can get out of hand quite fast. Off the top of my head there's Citrix, Dropbox, Flickr, Pinboard and Instapaper, which all charge subscription fees to support their services -- and all of which could be defined as "delivering content" under Apple's smooshy definitions. You mean Apple is going to start rejecting apps like Instagram because Flickr charges a fee? Probably not, because there's no mechanism to pay for Flickr within the app, nor is the subscription fee necessary for Instagram to work (you can use the free version of Flickr and Instagram's service is free outright). Ditto for Dropbox, which has many free users. Things could get tense for Citrix, as you will need to subscribe to a GoToMeeting plan in order to use their apps. The same would go for anything using Campfire and other SaaS-based apps where the service portions are inextricably tied to a subscription model. But again, it depends on what the definition of "content" is, doesn't it?

One could argue Citrix could be used to deliver content -- or just functionality, or it's simply a go-between. Where is Apple drawing the line? This could be the straw that breaks the camel's back. Even shops like Citrix, owned by powerhouse of software as a service SAP, could be hit hard by this decision. Imagine Citrix pulling their apps from the store, just after SAP made a splash by acquiring several hundred iPads.

Apple is free to do what it wants in its own store, of course. Apple built it, so it sets the terms. But in an open market, and one where tablet-makers are rushing into the space with a ferocity we didn't see during the rise of the personal computing age, I think Apple will be surprised to see that draconian changes to its terms will simply lead to a big drain on its ecosystem. It could even be inviting yet more regulatory scrutiny with these moves. A lack of clarity isn't helping matters, either. And what about the Mac App Store? The developer of TinyGrab already tweeted that you won't see TinyGrab in the Mac App Store because of these subscription rules, and he elaborates on the iOS side in this blog post.

No one wants the App Store to fail, least of all me. Why Apple feels compelled to apply a "one size fits all" methodology to every corner of its policies, however, is difficult to understand. In the end, developers will find a way, with or without Apple's blessing (Readability is sticking with the Web until Apple clears things up). Consumers are left making the tough choices, which will ultimately affect Apple's bottom line.