Apple has rejected the latest update of the Instacast podcatching app, taking issue with their Flattr integration. Instacast has offered a nice integration with Flattr since February of this year. Users can flattr their favorite podcasts, and even automatically flattr the podcasts to which users listen, providing real money for content creators. Instacast has now updated their app without Flattr integration, but both Flattr and Instacast say they are taking steps to appeal the decision. 

We’ve covered the company many times in the past, and even interviewed CEO and co-founder Linus Olsson on our Unfair Advantage podcast. But if you haven’t heard of them, Flattr is a Malmö-based company that allows people to donate to content they normally get for free by clicking a Flattr button, similarly to a Facebook Like button, but with real money being transferred behind it.

Apple has recommended to Vemedio (the maker of Instacast) that they change the user flow and force the actual flattr to take place in Safari. This would not be hard to implement, but Flattr and Vemedio point out that it both kills the user experience and the auto-flattr feature that really increases the amount of Flattrs that take place.

While at first it may seem that Apple has rejected Flattr due to its policy on in-app payments, the real answer is more complicated due to Flattr’s model.

To reduce the psychological friction of how much you’ll pay for one donation, the service runs on a subscription model where users pay however much they want a month, and at the end of the month their money is divided evenly to all the content they Flattr.

In a sense, Instacast doesn’t have users paying money through their service, all the app does is just allocate money already paid from a subscription plan. Flattr gives the analogy of Spotify. Users pay a subscription price each month, and later their money is allocated to artists based on the tracks they listen to.

This is not the first criticism of Apple for their walled garden. While users are happy to see high-quality apps in the app store, there are still many examples like this that make you question Apple’s motives, or make you wonder if they know what they are doing. With any luck, the companies will find some way to logically resolve this issue.

More information can be found on the Flattr blog.