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Conspiracy Theory: Why Ad-Blocking is really coming to iOS9

by User Not Found | Aug 12, 2015

Ads suck. That seems to be the general consensus. The remote control (or clicker as it was colloquially known a million years ago) allowed for channel surfing during commercials. DVR technology was initially heralded for its ability to skip ads (R.I.P. Replay TV). AdBlock is one of the most popular browser extensions.

It is clear people want to avoid advertising. With the TV and PC capable of doing this (and Android for that matter) Apple now desires to bring ad blocking to its users with a new feature in iOS 9 which could cost publishers Billions. So, is Apple feeling generous? Paternalistic? No, I suspect Apple's decision is actually about apps.

How does driving publishers to apps help Apple?

  • Apple generates subscription revenue from all apps subscribed to in-app. Usually 30% although there is speculation that number is negotiable for the right content partners. If publishers create great apps that users subscribe to there is a recurring revenue stream for Apple.
  • Apple becomes the analytics conduit for understanding usage. Ever heard of big data? Yeah, it's a thing and Apple recently upped its analytics game for developers which could -if offered as a premium package - offer a new long-term revenue stream for Apple. Forcing publishers to native apps means Apple controls usage data and other important metrics.
  • Apple ensures all content is optimized for its various devices. Because Apple has to approve each App and further controls discoverability with featured content Apple can begin convincing companies to optimize for the entire iOS family (iPad, iPhone, Apple Watch and the rumored Apple TV) to ensure content across its entire portfolio making each device more valuable.
  • Apple can more easily thwart potential competition. After Fitbit publicly stated they wouldn't integrate into Health Kit Apple decided to stop selling its hardware in its stores. Pebble has contended that Apple has held up its app approval for weeks to get an advantage. I'm not saying this is happening but they're motto isn't "Don't be evil" after all.
  • Apple could generate real revenue from in-app advertising. It seems that iAd (remember that?) hasn't lived up to Apple's lofty standards. Could driving publishers to app centric content distribution (perhaps published through Apple's Apps - such as News) come with the requirements or expectation of using iAd? Could Apple make iAd more profitable for content owners so it becomes the default ad network of choice? Just speculating. Or could Apple begin taking a cut of ads shown via iOS apps. Yes, publishers would kick and scream - until they didn't. You don't hear anyone complaining about Apple's 30% cut of subscription revenue anymore, do you?
  • iOS: The only place for ad-supported content? The web will always be a trove for valuable content. But if advertising revenue is truly inhibited content owners will need to find alternative distribution strategies which may include a move to subscription only. If Apple makes the open web unprofitable for ad-supported content but iOS apps profitable then it can tout iOS as the place for free content. If achieved Apple can basically co-opt the entire web! (insert evil maniacal laugh here)

Apple wants to make money. It accomplishes this with apparent ease  but like any business it needs more. By limiting ad revenue potential on the open web, Apple helps drive users and publishers to native apps where advertising won't be blocked. This in turn opens new revenue channels for Apple, gives the company control over content distribution and makes its hardware more valuable to users. In the meantime it diminishes the value of the open web and competing devices.

It always feels like less choice and a monolithic channel overlord seems like a bad thing and I doubt that is any different in this case but it could be a revenue boon for Apple and its app store even if it earns the short term ire of app developers, content owners and publishers.

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