Back in January, I mused that Apple’s insistence that publishers must use the in-app subscription functionality when they sell content to users might provide a boost for Android. Then, a patent troll reared its ugly head, demanding that developers cough up 0.575% of their US revenue from in-app purchases, and this week, just hours after the Financial Times released a web app that effectively bypasses Apple’s terms and conditions altogether, news emerged that Apple is backtracking on it’s in-app subscriptions policy.

Apple’s clearly on the back foot. It appears that they failed to anticipate that publishers would sell subscriptions out-of-band and now they look a little bit greedy (for trying to grab 30% of subscription revenue), incompetent (because the platform they sought to force developers to use turned out to be booby-trapped by the Lodsys patent – even if the patent turns out to be invalid or if it’s proven that Apple’s licence also cover app developers, a lot of damage has already been done) and foolish (because it turns out that, despite all Apple’s efforts, you can simply sidestep the App Store – and their 30% commission – by building your app in HTML5 instead of natively on iOS).

Platforms need to be stable (both in terms of the technology and the commercial terms and conditions the platform owner imposes) to attract and retain 3rd party developers and content providers. How can a publisher formulate a strategy for a platform if you don’t know what the rules of engagement are going to be in six months time? On top of that, those who scrambled to update their apps to incorporate Apple’s in-app purchase functionality by the June 30th deadline are likely seething about the wasted effort.

Because platforms rely on network effects, it’s important to get your strategy and your business model right. If you don’t, problems are magnified by the very same network effects you rely on to make your platform successful in the first place.

The more restrictive a platform, the less attractive it becomes. Had Microsoft imposed T&Cs as restrictive as Apple’s on Windows software developers, Windows would not have achieved the dominance it did during the 1990s. (Incidentally, there’s a certain irony in the fact that FT’s use of HTML5 to escape Apple’s restrictions is reminiscent of the threat that Microsoft perceived the Web as posing to Windows’ position as the dominant OS.)

Similarly, if the platform owner tries to impose too high a price on access to their platform, it makes it less attractive. If everyone who sold content in PDF format had to pay commission to Adobe, I doubt we’d all have Acrobat Reader installed on our desktops.

Network effects mean that a significant portion of a platform’s value is derived from its users. If the platform owner seeks to extract significantly more value than they contribute – through, for example, innovative design and functionality, or the creation of a user-base through marketing – it becomes economic rent.

Apple make money on each iPhone and iPad they sell. They make money each time someone signs up to become an app developer. They make a commission on every native iOS app sold. Was it wise to also demand 30% of the revenue from paid-for content accessed through those apps?

Following on from my previous post about the Ubermedia vs. Twitter confrontation, news has emerged that Ubermedia is planning a service that would compete with Twitter. CNN has the scoop, although I prefer the Business Insider article, purely because it has an awesome photo (I’m actually quite jealous of that photo – it makes my ground squirrels seem quite boring by comparison) .

One curious aspect to all of this is that, although rumours first emerged that Ubermedia was in talks to acquire TweetDeck more than two months ago, there’s been no official confirmation. Twitter’s announcement that new client apps are unwelcome suggests that it won’t now be possible to launch a new Twitter client, which means that the existing clients have just become more valuable. TweetDeck may have other suitors. Combine that with the fact that it could be argued that Twitter’s targeting of Ubermedia has made them a less-attractive merger prospect (rumour has it that TweetDeck’s shareholders would have been paid at least partly in Ubermedia stock), and it wouldn’t surprise me if TweetDeck’s holding out for more money.

A month ago, Mashable reported that recent auctions of Twitter shares value the company at $7.7bn. If Ubermedia is the biggest threat to that valuation, I wonder how much it’s worth to Twitter to remove that threat, either by buying Ubermedia or, if that’s not an option, by snapping up the remaining third-party clients (like TweetDeck) to deny Ubermedia the opportunity to add their users to its own.

Meanwhile, Rstat.us and Diaspora are quietly bubbling along in the background and could end up crashing the whole party.

A few weeks ago, Twitter suspended two of Ubermedia’s clients from accessing the Twitter API. I was busy at the time and didn’t pay much attention but Twitter’s recent announcement discouraging the development of new Twitter clients and a tweet from entrepreneur/VC Max Niederhofer (“What if the inventor of SMTP had told people to stop building email clients? Will Twitter go the way of Usenet?“) got me thinking about whole affair again.

There’s an interesting dynamic happening here. In principle, there’s no barrier to building an open version of Twitter (or Facebook, for that matter). In fact, SMTP and Usenet are good examples of open, decentralised platforms for e-mail and discussion boards, respectively. There’s no reason you couldn’t have multiple micro-blogging sites, publishing RSS-style feeds that are aggregated on the client side.  But Twitter don’t want that because, in that scenario, the network effects that currently drive everyone to Twitter would be neutralised. A lot of the eyeballs that Twitter wants to display adverts to would disappear, and Twitter would go the way of Compuserve. In fact, there are indications that Twitter is moving away from open standards like RSS.

So, Twitter needs to own its users’ eyeballs in order to generate revenue from them and justify its multi-billion dollar valuation. But what happens if users are accessing Twitter through a third-party app (like Ubermedia’s apps) that connects via Twitter’s API? Ownership of those users’ eyeballs is a little murkier. Arguably, Ubermedia has more control over them than Twitter. If Ubermedia were to add support for other micro-blogging platforms to their clients, Twitter could very rapidly lose it’s dominant position (and the attendant market valuation).

Twitter’s response was to stomp on Ubermedia by suspending its clients. They’d probably like to withdraw support for third-party clients altogether but there’d be a massive outcry and, potentially, the risk of legal action or some kind of FTC investigation, so they’ve settled for making it clear that new Twitter clients are unwelcome. More interestingly, they’ve also made changes to the T&Cs that are clearly designed to prevent developers from siphoning Twitter content into their own micro-blogging service, including a stipulation that third-party clients “must use the Twitter API as the sole source for features that are substantially similar to functionality offered by Twitter” and “may not use Twitter Content or other data collected from end users of your Client to create or maintain a separate status update or social network database or service.”

Exactly what this means for apps like TweetDeck, which includes support for Facebook, MySpace and LinkedIn status updates, remains to be seen. Coincidentally, Ubermedia is rumoured to have agreed to acquire TweetDeck (as if the plot weren’t thick enough already).

It’ll be interesting to see what happens next.

Here’s what could happen if you’re a paid-for content provider and you invest in publishing your content on a proprietary platform that you don’t control – the platform owner turns around and decides to take 30% commission on every piece of content you sell.

This could really backfire on Apple. This year, we’re likely to start seeing a bunch of Android tablets come on the market and if publishers end up making 30% less revenue on iOS than they do on Android, it could lead them to focus more on the Android platform. Even if Apple backs down, a certain amount of damage has already been done – content providers will be taking a closer look at the terms and conditions they’re signing up to, and thinking about the longer-term implications of committing themselves to a content-delivery platform controlled by a company that’s willing to change the rules without consultation and relatively little warning.

It’s not completely unheard-of for a hardware manufacturer to take commission from content providers – that’s how the console gaming market works. The difference is that console manufacturers like Sony and Nintendo sell the consoles at a loss and rely on the fees they receive from games publishers to generate a profit over the long term. Apple make a profit on each iDevice they sell. Taking a commission on subscriber content seems a little greedy and, in this situation, being overly-greedy could result in Apple throwing away its first-mover advantage in the tablet business.

Photo: A lone Magellanic penguin on the beach at Gypsy Cove, near Stanley on East Falkland island in the South Atlantic.