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Summary:

Apple today finally released official details regarding App Store subscriptions. The system is the same one that launched alongside News Corp.’s “The Daily” on Feb. 2. Subscriptions in the App Store will be sold using the existing in-app purchasing system found in iOS.

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Apple finally released official details regarding App Store subscriptions Tuesday, and it’s the same system that launched alongside News Corp.’s “The Daily” on Feb. 2. Under this system, subscriptions in the App Store must be sold using the existing in-app purchasing system found in iOS. Publishers now must offer subscriptions for purchase within their apps if they intend to have a subscription option at all, cutting Apple in on their revenue and possibly threatening the external store model employed by Amazon and others.

Publishers choose a weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly subscription period, and customers can then decide how long they wish to subscribe for, and are charged the appropriate amount depending on their choice. Subscriptions are managed through their personal iTunes account page, and customers are free to cancel any auto-renewals at any time. As expected, Apple takes a 30-percent cut of any subscriptions purchased through the App Store.

Apple is quick to point out that publishers can still offer subscriptions outside of their apps, too — so long as they also offer the in-app subscription method:

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Apple seems to have relented regarding the ability for publishers to provide free access to existing subscribers, something the company was originally reported to have opposed. That Apple is preventing publishers from including in-app links to subscription or store websites may result in even more bad blood between them, however. It almost ensures most customers will just use in-app purchases to subscribe, since the cost to them is the same and it’s far more convenient. The wording of the release makes it seem as though apps such as Amazon’s Kindle could also eventually be affected, though a new recent update to that app was approved overnight and the link to the Kindle Store website remains in place.

Publishers will also get names, email addresses and zip codes of subscribers (although customers will be able to opt out). That’s a bit of a compromise, since Apple had originally been reluctant to provide any data at all to publishers, according to reports. Under the new system, publishers can even seek additional information about customers, providing they make clear that it’s a choice, and that that data will fall under the publisher’s privacy policy, not Apple’s.

This press release definitely strikes a more starkly informative tone than the short, jubilant ones Apple is generally known to release. The company’s outlining of very specific details regarding the new in-app purchasing mechanism suggests that it wants to tread very carefully, with publishers and end users alike. What do you think? Is this fair, or is Apple asking too much from its publishing partners?

Related content from GigaOM Pro (sub req’d):

  1. Firstly, I’m sure the Amazon Kindle app will be ok – well, for books at least since they are one-off purchases rather than a subscription. Not sure on newspaper and magazine subscriptions though, perhaps they could get around this with some very clever legal wording.

    I don’t know if I’m surprised with this move by Apple or not. On the one hand it’s an obvious thing to do as an extra revenue stream and gives developers and easier method of having a subscription servers.

    On the other hand though, Apple are loosing market share to Android based devices which has a much more open market place. So these subscription rules could see developers pull their apps from the store.

    I guess only time will tell if developers are willing to go along with the new rules or not.

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    1. If I was a subscription based developer, I would have no problem with this method. I’d push users to my own subscription model over the in-app version. Maybe with bonus rewards for using my website’s subscription vs. the Apple way.

      Or I’d suck it up and use the easy way out.

      But for the user, it’s great that they have an easy method to subscribe to whatever services will be coming out hassle free.

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    2. Get a clue. Apple isn’t losing market share to Android. Androids growth has been at the expense of Microsoft, Nokia, and RIM.

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    3. Apple is doing just fine. Just released they are making the most than anyone on handsets. Android has only caught up to Apple because they were on only one carrier in US and every handset maker has Android running on it. I have many friends and colleagues that have no idea that they have Andrioid, but they bought them because they said it “looks like the iPhone”, they just do not have ATT. But of course that has all changed recently. This year will be interesting!

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  2. [...] This post was mentioned on Twitter by TheAppleBlog, iPhoneDeck, Paul M. Watson, Markus Pettersson, Tim and others. Tim said: RT @MacTrast: Apple Blog: Apple Officially Launches App Store Subscriptions http://bit.ly/e54N3u [...]

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  3. This looks like familiar territory for Apple. Create the better user experience and then act all controlling about it.
    Android has had stupendous growth and I am assuming this action by Apple will only drive content providers and publishers more towards it (or maybe WP7, but that’s a pretty big maybe).
    I like the UX that Apple has given me, but sometimes I feel Apple asks a little bit too much of people who’ve contributed pretty substantially toward making its ecosystem so great.

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  4. [...] Etherington of GigaOm notes that the Apple-publisher partnership may not be as simple as Jobs describes. Publishers who use [...]

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  5. This method of subscription is acceptable. You’re not obligated to use in app purchases, but the option must be made available.

    So news companies can still offer cross platform subscriptions if they want to and still keep 100% revenue.

    It’s only fair to at least have the in-app purchases mandatory even if it’s not the only option. Since cutting Apple out completely would be underhanded as they are offering a distribution method(and that’s not free)

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  6. Another good news for small and big content publishers. Computers and laptops made content cheap, valueless to a great extent and resistant to payment but devices like the iPads and other tablets are quickly re-establishing the value of good content. It will not only open new revenue sources for publishers from all over the world, this will also improve the overall quality of the available content, as when people pay for it, they expect better content.

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  7. [...] Amazon’s Kindle iOS application received an update overnight, bringing some useful new features. But what might be more noteworthy is what it didn’t bring, in light of the recent rejection of Sony’s Reader application by Apple, and the introduction just this morning of a new in-app subscription system for iOS. [...]

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  8. I’m a bit worried about services like spotify, as they now seem obliged to offer their subscriptions through the app storen, thereby losing 30 percent to Apple(!)

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  9. [...] much rumor and speculation, Apple ( s aapl) has finally launched its subscription service for publishers, and like many of the things the company does, it has caused equal amounts of [...]

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  10. [...] today introduced in-app subscriptions in the iOS App Store, and while the announcement seems aimed at publishers of periodicals like magazines and digital [...]

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