Apple unveils subscriptions for iOS App Store, bans links to out-of-app purchases
Apple on Tuesday unveiled its new App Store subscription service, allowing publishers of content-based applications for iOS devices -- like newspapers, magazines, video and music -- to offer recurring billing, but preventing them from including links to external websites to purchase content or subscriptions.
The digital billing service is the same one Apple recently launched with News Corp.'s The Daily earlier this month. At the time, Apple's iTunes chief Eddy Cue said that Apple would offer more details on its subscription service in the near future -- a promise delivered on Tuesday.
Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly).
With one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription.
Apple processes all payments through the new recurring billing option, keeping the same 30 percent share that it has for other In-App Purchases.
"Our philosophy is simple ? when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," Apple Chief Executive Steve Jobs said. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app.
"We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers."
Jobs' comments included in Tuesday's announcement are likely intended to calm some publishers who have indicated they feel "betrayed" by Apple's iOS application subscription service. Apple recently began enforcing a rule that applications offer the ability to purchase additional content from within that app, rather than solely through an external Web-based storefront.
Apple also revealed that publishers who use its 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 websites, or can choose to provide free access to existing subscribers.
Since Apple is not involved in those 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 website, for example) which allow the customer to purchase content or subscriptions outside of the app.
Protecting customer privacy is a key feature of all App Store transactions, the company said. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe.
The use of personal information will be governed by the publisher?s privacy policy rather than Apple's. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher?s privacy policy rather than Apple's.
The digital billing service is the same one Apple recently launched with News Corp.'s The Daily earlier this month. At the time, Apple's iTunes chief Eddy Cue said that Apple would offer more details on its subscription service in the near future -- a promise delivered on Tuesday.
Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly).
With one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription.
Apple processes all payments through the new recurring billing option, keeping the same 30 percent share that it has for other In-App Purchases.
"Our philosophy is simple ? when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," Apple Chief Executive Steve Jobs said. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app.
"We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers."
Jobs' comments included in Tuesday's announcement are likely intended to calm some publishers who have indicated they feel "betrayed" by Apple's iOS application subscription service. Apple recently began enforcing a rule that applications offer the ability to purchase additional content from within that app, rather than solely through an external Web-based storefront.
Apple also revealed that publishers who use its 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 websites, or can choose to provide free access to existing subscribers.
Since Apple is not involved in those 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 website, for example) which allow the customer to purchase content or subscriptions outside of the app.
Protecting customer privacy is a key feature of all App Store transactions, the company said. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe.
The use of personal information will be governed by the publisher?s privacy policy rather than Apple's. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher?s privacy policy rather than Apple's.
Comments
"Vader, release him!"
I just want to know what this means for the Kindle App.
I think it means either A) They resist the change, pull their app, and lose out on the hundreds of millions of iOS customers out there, or
It seems very fair.
Not. It would be fair if the cost to producer was the same (eg, prices 30% higher for in-app purchases).
Right now, a customer renewing his bill must go on the site or use Apple's system, in which case the producer loses 30%. Since this essentially means the producer is either selling at a loss on the in app sales OR increasing his overall prices, what do you think happens? Yes, right: price increase for the consumer.
Unfair.
Well, this proves he's not ailing too much if he's able to contribute to the press release?!
Let's hope so!
It seems very fair.
I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.
I was hoping an iPad could replace the stack of magazines on my table, but I don't think that is going to happen anytime soon. Since Apple won't let the publisher charge less on their own web site, all subscription prices are going to be pushed higher due to Apple's policies. Online subscriptions, if available at all, will probably cost more than the print copy mailed to my door.
I like the fact the customer is giving a choice to share is info with the subscriber.
Regarding Kindle, imo users will have to buy books on the Amazon website to avoid paying 30% to Apple, but the Kindle app will have to provide a way to buy books "in-app" too at the same price and then a 30% cut will go to Apple.
Yes, very fair, a 30% cut for prividing only the payment method.
Ups, I forgot this:
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.
You can't click on Kindle app to go to Amazon and purchase the book, the only way is through in app.
I just want to know what this means for the Kindle App.
My take is that since Amazon is not a publisher nor do they sell subscriptions it shouldn't affect them at all.
But I could be wrong.
This is great, if the publisher can sell a subscription directly on is site he doesn?t have to pay Apple the 30%, but if a customer finds it on Apple App store, Apple gets his 30%.
I like the fact the customer is giving a choice to share is info with the subscriber.
Regarding Kindle, imo users will have to buy books on the Amazon website to avoid paying 30% to Apple, but the Kindle app will have to provide a way to buy books "in-app" too at the same price and then a 30% cut will go to Apple.
There should be a big disclaimer "be warned that every time you buy using the in app system, the global price increases"
There should be a big disclaimer "be warned that every time you buy using the in app system, the global price increases"
How about a 30% rebate for people who use the out-app sub?
Increase price 30%, then have a 30% cut for Apple in app and a 30% rebate out-app XD
Okay. For a change Apple is giving choices. Having an option not reveal personal info to publishers is good.
this is pretty much what the entire "fight" has been about.
Many magazine publishers are really more in the business of buying and selling your personal information than they are the business of magazines. Most of the larger concerns have a different magazine offering for each demographic and see their business as keeping a sort of coral of consumers of various types for the purposes of marketing to them with each magazine defining the "type" of consumer. Since most magazines also contain more advertising than they do content, the true customer of the Magazine distributors is actually the advertisers who advertise in one type of magazine or another based on the demographic of that audience.
Magazines may be popular, but like Microsoft, the magazine distributors really work for the advertisers and not the people who buy them.
If Steve Jobs and Apple hadn't done this, what would have happened is a digital version of the same thing. Apple is actually on the side of the consumer, instead of being in bed with the middle man as most companies are.
Of course this is entirely fair and reasonable and could have some downsides for consumers
Fair a 30% cut only for processing payment? Fair making it almost the only way of purchasing on an iPhone or iPad? Really?
I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.
I was hoping an iPad could replace the stack of magazines on my table, but I don't think that is going to happen anytime soon. Since Apple won't let the publisher charge less on their own web site, all subscription prices are going to be pushed higher due to Apple's policies. Online subscriptions, if available at all, will probably cost more than the print copy mailed to my door.
The problem with this argument is the premise that the only value-added provided by apple is the payment processing. The value-added provided by apple is their 100 million+ users. Through the App store, you get access to a vast market that in most cases you didn't have access to before.
If you're like Amazon and already do have access to that market, then you can continue to sell to your users through your own store, so long as you don't undercut the price in the Apple store. I suspect that Amazon might go along with this, because it probably is more convenient for many of their customers to purchase Kindle books through Amazon rather than through in-app purchases (since Kindle books can be used across a variety of devices that someone might own). But for companies that do not already have access to this market, Apple is providing them with that access, and that's valuable.
I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.
I was hoping an iPad could replace the stack of magazines on my table, but I don't think that is going to happen anytime soon. Since Apple won't let the publisher charge less on their own web site, all subscription prices are going to be pushed higher due to Apple's policies. Online subscriptions, if available at all, will probably cost more than the print copy mailed to my door.
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.