Apple held secret meeting with developers in 2017 to push app subscriptions
In a meeting in a New York loft last year, Apple told around 30 developers that they ought to embrace subscription models.
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.
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.
In January, Apple launched an app store section featuring free trials for certain subscription apps.
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.
Comments
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.
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...).
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.
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.
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.
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.
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.