Apple (s aapl) 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 (s amzn) 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.
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?
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