August 10, 2011 at 11:05 am

Apple’s Brazen Revenue Grab Boosts Open Web Apps

You have to hand it to Apple… or do you?

The company’s demand that companies offering subscriptions to everything from magazines to music services through iOS hand over 30 percent of resulting revenue to the company could be backfiring already.

Apple’s projected revenue from other companies’ sale of iTunes apps is a big reason its stock price is so high. However, its own policies could have ominous implications for its proverbial golden-egg-laying goose.

The potent combination of HTML5′s growing capabilities and Apple’s attempt to draw a king-like tribute from media companies that already operate on razor-thin margins could turn the app revolution into the open web revolution — call it Web 3.0, or perhaps the app-ified web.

In addition to eroding iTunes revenue, this would open the door for hardware competitors such as Google Android affiliates, Blackberry, and Microsoft. Anything that runs HTML5 and streams HTTP would be able to handle media apps designed primarily for the iPhone or iPad.

Music services have largely contended with Apple’s policy by deleting “subscribe” links from their apps, or even raising prices. Today brings news that Walmart’s streaming video service, Vudu, skipped the development of a native iPad app in favor of an iPad-accessible website that streams via HTTP — thereby keeping the 30 percent of revenue it would have otherwise had to hand over to Apple.

Vudu general manager Edward Lichty said that in addition to keeping that 30 percent, he likes the way the open app approach lets Vudu add features without asking Apple to approve the new version of an app.

Then there’s Amazon, the electronic reading powerhouse, which earlier removed the link to its Kindle store from its Kindle iOS app rather than surrendering 30 percent of resulting revenue to Steve Jobs and company. On Wednesday, it launched a web-based “cloud” version of the Kindle, which TechCrunch — admittedly no friend to understatement – says looks “brilliant on a PC, better on iPad.”

As with the app version, the cloud-based Kindle “allows you to read your books from the cloud or to download your books for offline reading thanks to the magic of HTML5″ — also a crucial feature for music subscription apps. As if that weren’t enough, the first Apple TV game was also recently delivered by HTML5.

MOG founder and CEO David Hyman earlier told Evolver.fm that the Chrome App version of his service, which runs on HTML5, became the model for the web-based version. For now, he has reacted to Apple’s rules by deleting the subscription link from his iPhone app.

How long will it be until MOG and other content subscription services switch to HTML5 and encourage current and future users to try that, instead of the native iOS app? Unless Apple relaxes its rules even further, that’s where we are headed.

By building an unparalleled ecosystem of hardware devices, Apple earned the right to make any demand of the companies that want to sell content there. Likewise, media companies and app developers have the right to build their apps in HTML5 and other open web technologies instead, which users can easily access via Apple’s Safari browser and keep that money for themselves.

For apps with ambitious, complex functionality, such as Bjork’s next-level Biophilia app album, HTML5 will never be powerful enough. But for simpler tasks — like delivering media as part of a subscription that can be stored locally on a device for offline reading or listening — HTML5 works just fine, and will likely weaken Apple’s lucrative middleman status to some degree, barring a change in policy.

Will this migration to open apps be enough for Apple analysts to lower their iTunes-derived projections of its stock price? Only time will tell, but those wheels are already in motion.