Apple announces it will offer App Store subscriptions to all apps, take smaller 15% cut

Posted:
in iPhone edited June 2016
In the near future, Apple will be shifting to a new revenue sharing model for apps -- one that more heavily favors subscription services than one-time or in-app purchases, marketing head Phil Schiller revealed on Wednesday. The company also plans to begin allowing search ads in the App Store this fall.




Although the company's current 30 percent revenue cut will remain in most cases, once a customer maintains a subscription for over a year, that cut fall to 15 percent, giving developers a larger share of revenue for long-term subscribers, Schiller told The Verge. Subscriptions are also opening up to all kinds of apps, including games, instead of just categories like music services and magazines.

The change will be effective as of June 13. After a subscriber's first year of an auto-reneweable subscription, a developer's share of revenue increases to 85 percent.

If a user cancels their subscription, there is a 60-day grace period where they can resubscribe and will remain in the 85 percent revenue tier for developers.

In addition, Apple this fall will allow developers to keep existing subscribers at their current price, while increasing the price for new users. Developers will be able to have an unlimited number of price cohorts preserved at their existing price.

Subscriptions will also be available with various levels of service, such as basic, premium and pro memberships. Developers can also customize durations, such as weekly, monthly or annually. Users will also be able to switch service levels as they see fit.




The company is also planning to roll out other changes to the App Store starting next week, among them search ads for apps in the iOS App Store. Schiller claimed a new ad auction system will be "fair to developers, and fair for indie developers, too."

Dubbed "Search Ads," the new feature is aimed to help developers promote apps directly within U.S. App Store search results, helping customers discover or reengage with their apps. Apple also said the search ads will respect users' privacy.

Search Ads are set to become available in beta form this summer before launching to the general public this fall. Developers are invited to opt in to the Search Ads beta starting now.

In an illustration on Apple's site, Search Ads are shown highlighted in blue, with a small "Ad" icon located below the name of the app, and to the left of the developer's name.
mejsricmattinoz
«1345

Comments

  • Reply 1 of 84
    rogifan_newrogifan_new Posts: 3,922member
    Search ads? Yuck.
    lord amhranlostkiwirepressthisjackansidysamoriajbdragon
  • Reply 2 of 84
    lord amhranlord amhran Posts: 902member
    Oh joy. Ads...
    lostkiwirepressthisjackansidysamoria
  • Reply 3 of 84
    rogifan_newrogifan_new Posts: 3,922member
    If this is App Store 2.0 it's pretty timid.
    jackansidysamoriajbdragon
  • Reply 4 of 84
    thewhitefalconthewhitefalcon Posts: 4,453member
    If this is App Store 2.0 it's pretty timid.
    It's not huge but it is a needed start. Under Eddy I think we weren't going to see any changes.

    A lot of pro-app devs have been hesitant to get serious about iOS because it's not economical to sell an app once and constantly be rebuilding it for free when Apple launches something new. Having it tied to a subscription model should help with that, though a full paid upgrade system may still be needed for some of them.
    lord amhranbrucemcTurboPGTrepressthisirelandjbdragonlatifbp
  • Reply 5 of 84
    lord amhranlord amhran Posts: 902member
    This begs the question: if Schiller has been able to do all this in the few months that he's been at the helm of the App Store then wtf was Eddie Cue doing in HIS time overseeing the App Store?
    repressthisjackansiirelandjbdragonlatifbp
  • Reply 6 of 84
    tzeshantzeshan Posts: 1,943member
    This plan may not be very successful.  The developer may charge much higher subscription fee for fearing the subscriber will drop it sooner.  
  • Reply 7 of 84
    thewhitefalconthewhitefalcon Posts: 4,453member
    This begs the question: if Schiller has been able to do all this in the few months that he's been at the helm of the App Store then wtf was Eddie Cue doing in HIS time overseeing the App Store?
    Attending basketball games and failing to secure TV deals.
    tzeshan said:
    This plan may not be very successful.  The developer may charge much higher subscription fee for fearing the subscriber will drop it sooner.  
    It'll work itself out in short order. Even Microsoft pivoted on Office for iOS pricing pretty quickly.
    repressthislolliver
  • Reply 8 of 84
    tzeshantzeshan Posts: 1,943member
    If App Store offers an option to buy or subscribe the new plan will be very successful.  
  • Reply 9 of 84
    lord amhranlord amhran Posts: 902member
    This begs the question: if Schiller has been able to do all this in the few months that he's been at the helm of the App Store then wtf was Eddie Cue doing in HIS time overseeing the App Store?
    Attending basketball games and failing to secure TV deals.
    It'll work itself out in short order. Even Microsoft pivoted on Office for iOS pricing pretty quickly.
    This serves as futher evidence that Eddie Cue's time at Apple has long since come & gone. He needs to be shown the door.
    edited June 2016 repressthisjackansijbdragon1983
  • Reply 10 of 84
    rogifan_newrogifan_new Posts: 3,922member
    Attending basketball games and failing to secure TV deals.
    It'll work itself out in short order. Even Microsoft pivoted on Office for iOS pricing pretty quickly.
    This serves as futher evidence that Eddie Cue's time at Apple has long since come & gone. He needs to be shown the door.
    Interesting that in this interview Schiller made a point to say Eddy was still very much involved. But I agree with you and wouldn't cry any tears if Eddy took an early retirement.
    repressthis
  • Reply 11 of 84
    rogifan_newrogifan_new Posts: 3,922member
    What's the point of search ads other than Apple looking for another "services" revenue stream to offset declining hardware sales?
    jackansidysamoria
  • Reply 12 of 84
    thewhitefalconthewhitefalcon Posts: 4,453member
    What's the point of search ads other than Apple looking for another "services" revenue stream to offset declining hardware sales?
    I believe developers have requested this. Notably, they're emphasizing that even tiny guys can buy these spots. App Store discovery is still a real issue, this may not be terrible.
    TurboPGTlostkiwipatchythepiratelolliver
  • Reply 13 of 84
    Please no. Subscription based apps would be unaffordable for people like me, who save up for a week to be able to afford an app like Minecraft. 
    repressthisdysamoria
  • Reply 14 of 84
    brucemcbrucemc Posts: 1,527member
    If this is App Store 2.0 it's pretty timid.
    If this is App Store 2.0 it's pretty timid.
    As usual, you look for the cloud inside the silver lining.  
    lolliver
  • Reply 15 of 84
    tshapitshapi Posts: 291member
    I smell a tv subscription service coming. I also suspect this new revenue framework is what apple had to agree to in order to get apps like Amazon prime television to agree to be in the tv App Store. And cable networks to agree to there skin bundle for a tv subscription 
    repressthispalominegoodbyeranch
  • Reply 16 of 84
    This is brilliant move by Apple. The app will be very popular for a year where Apple takes 30% cut. After a year, the purchases will show down where Apple only takes 15% cut. Apple is not losing much but comes out stating that they are only taking 15% cut *.

    * after first year

    fine print folks.
    jackansi
  • Reply 17 of 84
    brucemcbrucemc Posts: 1,527member

    If this is App Store 2.0 it's pretty timid.
    It's not huge but it is a needed start. Under Eddy I think we weren't going to see any changes.

    A lot of pro-app devs have been hesitant to get serious about iOS because it's not economical to sell an app once and constantly be rebuilding it for free when Apple launches something new. Having it tied to a subscription model should help with that, though a full paid upgrade system may still be needed for some of them.
    Indeed, a step in the right direction.  Not everything that is needed to make the App Store (for all platforms, but especially iPad and Mac) as good as it can be for sure, but definitely an improvement to allow devs to be able to better monetize and hence an incentive to keep investing and make great apps.  Now need to add some "try before buy" functionality, ability for devs to charge for major upgrades (for those that want to purchase), and allow devs to interact with their end users to get feedback (anonymously).

    Ability to advertise is not in itself a bad thing.  Something I am sure all developers want.  Outside of the App Store, application sellers have many options to get their product known, and I am sure all of them do some advertising.
    tokyojimu
  • Reply 18 of 84
    tshapitshapi Posts: 291member
    Skinny bundle
  • Reply 19 of 84
    Could this affect an Amazon Prime app coming to the Apple TV?
    TurboPGT
  • Reply 20 of 84
    tshapi said:
    Skinny bundle
    Could this affect an Amazon Prime app coming to the Apple TV?
    I hope so! :)
Sign In or Register to comment.