Apple held secret meeting with developers in 2017 to push app subscriptions

Posted:
in General Discussion edited August 2018
In a meeting in a New York loft last year, Apple told around 30 developers that they ought to embrace subscription models.

App Store subscriptions


According to a report this week by Business Insider, Apple convened an invitation-only meeting in New York in April of 2017, aimed at letting developers know that the model for apps was changing.

The developers, Apple told them, needed to be concerned with recurring revenue from subscriptions rather than one-time sales. This has resulted in more apps switching to a subscription model, leading to Apple's announcement in its last quarterly earnings report that paid subscriptions from Apple and third parties had passed $300 million.

The report does not make clear which developers were at the meeting, who was there representing Apple, or who owns the Tribeca loft where it took place. What we do know is that what Apple introduced to the developers at that 2017 meeting is reportedly internally referred to as "Subscription 2.0," an initiative that has been in the works since 2016.

Software as a service

At the meeting, the developers were told that they needed to shift their focus away from upfront cost and towards long-term engagement and recurring revenue.

This was at the heart of Subscriptions 2.0, which Business Insider describes as "a way for developers that made utilities and other kinds of apps to bill their customers on a regular, recurring basis." The meeting included talk of "launching, customer acquisition, testing and marketing, engagement, retention, monetization, and paid search ads."

Under Apple's revised subscription model, announced in 2016, the company continues to receive 30 percent of the subscription cost, but after a year, that figure is cut to 15 percent. The remainder goes to developers and app publishers, an incentive to adopt subscription pricing.

There are now about 30,000 subscription-based apps in the App Store. While only a small percentage of available apps in the App Store use the model -- and many of those are non-indie giants like Netflix, HBO Now and Tinder -- Apple is reportedly happy with how the effort is going.

Success stories

Examples of successful subscription apps, according to the story, include FaceTune 2, a sequel to FaceTune, which was the top downloaded paid app own the U.S. as of last week. FaceTune 2 has notched 500,000 active subscribers.

In January, Apple launched an app store section featuring free trials for certain subscription apps.
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Comments

  • Reply 1 of 62
    cashxxcashxx Posts: 113member
    Sorry....will never give in to a subscription model and neither should anyone else!
    macseekerinlupinewayscornchiplibertyforallmejsricdewmederekcurriemwhitejbdragonevilution
  • Reply 2 of 62
    I agree, this is nothing more than taking the  ownership away from the customer. Rent everything, own nothing. I’m surely not trying to get all Alex Jones on my first post, but there is more than what is on this surface. The scary part is these devices and apps have become so much a part of everyday life that no one cares, and most will begrudgingly pony up the subscription costs and never own a damn thing. 
    cornchiplibertyforalljbdragonGeorgeBMacdysamoriakestral
  • Reply 3 of 62
    cornchipcornchip Posts: 1,857member
    I agree, this is nothing more than taking the  ownership away from the customer. Rent everything, own nothing. I’m surely not trying to get all Alex Jones on my first post, but there is more than what is on this surface. The scary part is these devices and apps have become so much a part of everyday life that no one cares, and most will begrudgingly pony up the subscription costs and never own a damn thing. 
    Sadly majority will win. Which way do you think it will land? ... 
    derekcurrie
  • Reply 4 of 62
    I wish Apple would just allow bloody upgrade pricing! I’m more than happy to pay for a new version of an app if a new version is out. But The whole subscription model thing assumes that I use all my apps every month, which I don’t!

    subscriptions work for music services because there’s always new content available. Subscriptions work for video because we rarely want to watch things over and over. 

    I dont need my word word processor or graphics app to be a subscription service because I might go months without using either one, then I might use it every day for a few months. I would rather just buy it and use it until it isn’t compatible with my device/OS. 
    libertyforallderekcurriejbdragonbonobobCarnagemike54entropysrogifan_newdewmedysamoria
  • Reply 5 of 62
    Super tired of the subscription model trend, just a scheme to suck more money out of people!
    derekcurriejbdragonbonobobentropysdysamoriakestral
  • Reply 6 of 62
    cashxx said:
    Sorry....will never give in to a subscription model and neither should anyone else!

    Subscriptions make a lot of sense for certain applications.

    Microsoft Office 365 is an OUTSTANDING deal on a subscription. Instead of buying Office every few years for several hundred dollars (upgrade fee) you pay $99 a year (I have the Home subscription for 5 users). So you end up paying the same, but get regular updates and features, instead of one big update every few years. To top it off, MS throws in 5TB storage (1 per user).

    I doubt Apple is trying to get ALL developers to go to subscriptions, as many Apps simply don’t fit that model. More likely they met with developers with Apps that made sense to use a subscription model - those that provide an on-going service as opposed to a “fixed function” App (like a calculator).

    I find it funny when people complain about subscriptions for software when they already pay “subscription fees” for everyday services (cable, internet, cell phone...).
    racerhomie3lamboaudi4dewmeradarthekaturaharachasmwatto_cobraicoco3jony0
  • Reply 7 of 62
    netroxnetrox Posts: 1,054member
    Context needs to be given in this article. Originally, when apps were created, Apple does not allow developers to charge for major upgrades of the same apps. That meant that developers could not charge again ever. Now, we have subscription model and it seems to be the best way to keep them existing if you want to support their businesses. Don't like it? Tough. Developers need to make a living. Pay up or use free apps.
    racerhomie3radarthekatRayz2016uraharawatto_cobra
  • Reply 8 of 62
    netroxnetrox Posts: 1,054member
    I wish Apple would just allow bloody upgrade pricing! I’m more than happy to pay for a new version of an app if a new version is out. But The whole subscription model thing assumes that I use all my apps every month, which I don’t!

    subscriptions work for music services because there’s always new content available. Subscriptions work for video because we rarely want to watch things over and over. 

    I dont need my word word processor or graphics app to be a subscription service because I might go months without using either one, then I might use it every day for a few months. I would rather just buy it and use it until it isn’t compatible with my device/OS. 
    You don't have to have recurring model with those apps. you can cancel it anytime. And if you rarely use word processors then what's the point of even buying it when there are free software out there that you can use?
    racerhomie32770 Lorcauraharawatto_cobra
  • Reply 9 of 62
    If a service/app offers ongoing provision of new information/data/research etc., then subscription makes sense. If the service/app is simply static, occasionally updated software, then never does subscription make sense. For example, I'd never see any sense in subscribing to Microsoft Office 365 or Adobe Creative Suite/Cloud. They're dead to me. Instead, I am far happier with buying permanent licenses for equivalent software. That makes sense. I pay subscription fees for rolling media streaming services and news sources.

    Whether currently Apple gets this or not isn't clear. What is clear is that Apple is to blame for their own ridiculous concept that a user pays for an app once, then never again. If Apple bothered to take the time, there is NO reason an update fee system for significantly updated apps can't be instituted. They only have to DO it. Their reluctance is irrelevant. Apple is acting as a service and conscientious protector. They have no role to play as authoritarian dictators to the developers and customers they serve. If Apple is going the way of Fearless Leader overlord of all it surveys, they've driven their future off a cliff like so many corporatocracy clowns in our current era of parasitic biznizziz. Historically, Apple has striven to be the opposite of parasites.
    edited August 2018 command_fwatto_cobra
  • Reply 10 of 62
    If a service/app offers ongoing provision of new information/data/research etc., then subscription makes sense. If the service/app is simply static, occasionally updated software, then never does subscription make sense. For example, I'd never see any sense in subscribing to Microsoft Office 365 or Adobe Creative Suite/Cloud. They're dead to me. Instead, I am far happier with buying permanent licenses for equivalent software. That makes sense. I pay subscription fees for rolling media streaming services and news sources.

    Whether currently Apple gets this or not isn't clear. What is clear is that Apple is to blame for their own ridiculous concept that a user pays for an app once, then never again. If Apple bothered to take the time, there is NO reason an update fee system for significantly updated apps can't be instituted. They only have to DO it. Their reluctance is irrelevant. Apple is acting as a service and conscientious protector. They have no role to play as authoritarian dictators to the developers and customers they serve. If Apple is going the way of Fearless Leader overlord of all it surveys, they've driven their future off a cliff like so many corporatocracy clowns in our current era of parasitic biznizziz. Historically, Apple has striven to be the opposite of parasites.

    If you don’t see the value in Office 365 then you’ve never done a cost analysis comparison with Office 365 and regular Office. Or you live in Bizzaro World and have a very specific use-case where paying almost the same price and getting less makes sense.
    edited August 2018 radarthekatwatto_cobra
  • Reply 11 of 62
    evilutionevilution Posts: 1,397member

    If you don’t see the value in Office 365 then you’ve never done a cost analysis comparison with Office 365 and regular Office. Or you live in Bizzaro World and have a very specific use-case where paying almost the same price and getting less makes sense.
    I suspect that most people could do the same stuff in Office 95 as what they do in Office 365. Apart from being a bit more polished and a money grab, I don’t see the difference. Office software doesn’t change enough that it needs regular updates. I bet a company could easily run in excess of 5 years with the same office software.
    muthuk_vanalingamentropysgatorguydysamoriakestralrandominternetpersonwatto_cobra
  • Reply 12 of 62
    evilutionevilution Posts: 1,397member
    Well, the good thing is, for every money grabbing subscription model there is, there will be a “buy outright” alternative and an ok free alternative too. I will never subscribe to software.
    dysamoriakestralwatto_cobrainequals
  • Reply 13 of 62
    netroxnetrox Posts: 1,054member
    If you need a word processor, there's a free word processor with every known OS. 

    99% of the time, you don't even need the features in Word. I've been working as a professional and I use Word because it's "free" for work but everything I do in Word, I can do the same in Pages. 


     
    mike54mac_dogGeorgeBMacdysamoriaradarthekatwatto_cobra
  • Reply 14 of 62
    This is Apple trying to find another revenue stream. 

    It like indicates they have made a decision to double down and this and that they have solidified a structure for it that they will push hard.

    With Apple Music, Netflix, etc., subscription is a fit.

    With most apps... NOPE.

    It's bad enough some subscription apps like Netflix, etc. are now being factored in terms of content with Disney, etc. trying to make users pay for their content separately. 

    But to take other app categories and try to force the user to pay again and again for yet another thing - only to lose that thing entirely when the budget doesn't work out... just plain sucks.
    mike54dysamoriakestral
  • Reply 15 of 62
    This is Apple trying to find another revenue stream. 

    It like indicates they have made a decision to double down and this and that they have solidified a structure for it that they will push hard.

    With Apple Music, Netflix, etc., subscription is a fit.

    With most apps... NOPE.

    It's bad enough some subscription apps like Netflix, etc. are now being factored in terms of content with Disney, etc. trying to make users pay for their content separately. 

    But to take other app categories and try to force the user to pay again and again for yet another thing - only to lose that thing entirely when the budget doesn't work out... just plain sucks.
    I don’t think anyone are forced to buy app with subscription. In iOS there are enough alternative that thing like this wouldn’t be a problem. I have never subscribed to non-video app & it has never had any effect on my use of iPhone. 
    watto_cobra
  • Reply 16 of 62
    sflocalsflocal Posts: 5,737member
    evilution said:

    If you don’t see the value in Office 365 then you’ve never done a cost analysis comparison with Office 365 and regular Office. Or you live in Bizzaro World and have a very specific use-case where paying almost the same price and getting less makes sense.
    I suspect that most people could do the same stuff in Office 95 as what they do in Office 365. Apart from being a bit more polished and a money grab, I don’t see the difference. Office software doesn’t change enough that it needs regular updates. I bet a company could easily run in excess of 5 years with the same office software.
    Our office had, and resulted in major headaches and painful incompatibilities with the rest of the world.

    Office 365 and adobe’s creative suite ARE perfect examples of subscriptions that work.  If your shop depends on being at the same level as everyone else, it makes great sense and is FAR cheaper than the perpetual license and the headaches of falling behind.

    im referring to professionals and business cases.  Individuals that use it casually, maybe not so.
    watto_cobra
  • Reply 17 of 62
    mike54mike54 Posts: 469member
    Subscriptions are easy money and a gold mine to companies. Microsoft and many others have known this for a long time.
    I will not support the subscription model. A very high percentage of people fail to cancel their subscriptions if they no longer use the service, and these companies know this very well.
    Sadly, this is where Apple is putting its effort, not the products or quality control. Its what Tim Cook is all about.
    edited August 2018 dysamoriakestral
  • Reply 18 of 62
    avon b7avon b7 Posts: 5,904member
    This is Apple trying to find another revenue stream. 

    It like indicates they have made a decision to double down and this and that they have solidified a structure for it that they will push hard.

    With Apple Music, Netflix, etc., subscription is a fit.

    With most apps... NOPE.

    It's bad enough some subscription apps like Netflix, etc. are now being factored in terms of content with Disney, etc. trying to make users pay for their content separately. 

    But to take other app categories and try to force the user to pay again and again for yet another thing - only to lose that thing entirely when the budget doesn't work out... just plain sucks.
    If someone files a complaint with the EU, it could lead to an investigation to clarify the content and purpose of the meeting.

    I'm not sure this was a good idea if it involves grouping top players together to push a business model as collective proposal.

    This could be seen as an effort to manipulate/influence free market operations.

    The devil will be in the details.
  • Reply 19 of 62
    joogabahjoogabah Posts: 131member
    avon b7 said:
    This is Apple trying to find another revenue stream. 

    It like indicates they have made a decision to double down and this and that they have solidified a structure for it that they will push hard.

    With Apple Music, Netflix, etc., subscription is a fit.

    With most apps... NOPE.

    It's bad enough some subscription apps like Netflix, etc. are now being factored in terms of content with Disney, etc. trying to make users pay for their content separately. 

    But to take other app categories and try to force the user to pay again and again for yet another thing - only to lose that thing entirely when the budget doesn't work out... just plain sucks.
    If someone files a complaint with the EU, it could lead to an investigation to clarify the content and purpose of the meeting.

    I'm not sure this was a good idea if it involves grouping top players together to push a business model as collective proposal.

    This could be seen as an effort to manipulate/influence free market operations.

    The devil will be in the details.
    In this case, I hope they really sock it to Apple.  Subscriptions to software are predatory.  Let the developers starve.  Who gives a whit?  Capitalism lets most people wallow in poverty.  Better to give the majority with very little a break from this usury. 
  • Reply 20 of 62
    2stepbay2stepbay Posts: 115member
    I’m OK with the subscription model when it comes to streaming services for viewing/listening content. Otherwise an emphatic NO! Apple used to be a positive trend leader for the consumer. Wonder where that consumer loyaltiy has gone?
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