Apple Opens App Store Subscriptions to Developers

| News

Apple officially launched its App Store Subscriptions features for all iOS developers on Tuesday. The feature was introduced during News Corp’s The Daily iPad news app launch in early February, but until now hasn’t been available for other digital publications.

The subscription service will be available for any content developers offer such as newspapers and magazines.

Apple opens App Store subscriptions to all developers

“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,” Apple said in a statement. “Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly).”

Customers will be able to manage their subscriptions from a personal account page, and just like other in-app purchases, Apple will take a 30 percent cut.

Despite being out on a medical leave of absence, Apple CEO Steve Jobs offered up a comment on the subscription service, too. “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,” he 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.”

Apple didn’t say when end users can expect to be able to start subscribing to publications in-app.

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Comments

paikinho

Seems like the whole SI discussion from a few days ago was for naught. I thought this might be the case. Amazing how quickly things change….like magic.

SI for Android not iPad

Bosco (Brad Hutchings)

Except RonMacGuy won’t take me up on a bet about when SI is coming to iPad. You’ve got one of the biggest, long-term surviving publishers in the world saying not only is this a bad deal, but the Android playground is more than good enough.

It’s not the 30% portion that is offensive to publishers. They will pay the same to Google when they use Google’s payment processing. It’s the noose they put around their neck with pricing flexibility and Apple circumventing their established billing and information collecting. It’s being required to use Apple’s payment processing if they want to be on the platform.

I hope Apple overplayed its hand this time. They add no value to the subscription equation that deserves a 30% cut and a best price guarantee. While obvious to me, it’s not just my opinion. Time seems to agree.

ilikeimac

This new subscription policy is similar to the new in-app purchase policy that Apple invented when they rejected Sony’s eBook reader: if you sell app content outside Apple’s App Store, you have to offer it inside as well.

Curiously, there was an update to the Kindle app today that didn’t change the status quo with regard to only being able to buy Kindle books through Amazon, yet Apple approved it. So either they’re allowing a “grandfather clause” for these things, or Amazon has arranged for special treatment, or Apple has just decided to give them special treatment rather than deal with the backlash.

paikinho

Someone once told me that to be successful in business one needs to understand what customers want and then to find what they want for them and stand squarely in the middle between the supplier and the customer.

Seems like that is all Apple is doing in this case. As long as any publishers are making a profit by linking up with Apples dominating supply chain, then they will do what they will and offer subscriptions to people thru Apple. In these times when magazines and newspapers are largely struggling for relevance I believe they will do what is necessary to move into the new way of doing things.

Apple has done a good job positioning themselves in the middle to such a degree that most will do what is mutually beneficial to both.

And remember, it costs a lot more to follow the current model. Running printing presses and shipping bulky paper all over the planet is costly compared with having an e subscription.

paikinho

It?s the noose they put around their neck with pricing flexibility and Apple circumventing their established billing and information collecting. It?s being required to use Apple?s payment processing if they want to be on the platform.

—————
I’m not sure there is a noose as you put it. It seems from the snippet that publishers can still offer their magazines out of apples system. The only requirement is that if special pricing is offered outside apples environment then the same offer must be offered inside apples environment.

If a magazine can find someone who will distribute for 10% less then they can do that as well. I’m not really seeing where this setup won’t benefit a publisher really.

I can also understand that the publishers would use Apples payment within Apples environment. They are not required to use it if they are selling subscriptions outside of the environment. It seems obvious that apple would keep their payment structure standardized and easy to manage. Why would they want multiple payment systems with all kinds of complexity entering into their structure?

Bosco (Brad Hutchings)

I can also understand that the publishers would use Apples payment within Apples environment. They are not required to use it if they are selling subscriptions outside of the environment. It seems obvious that apple would keep their payment structure standardized and easy to manage. Why would they want multiple payment systems with all kinds of complexity entering into their structure?

Isn’t that the key question though?!? To answer it the way you’ve phrased it from a publishers POV, the publishers would only offer their content through Apple and not through other electronic channels. Fat chance of that happening. Apple will not dominate tablet sales for long with their proprietary model. The model does not offer revenue or profit opportunities to others in the industry to make compatible devices, so those others will make competing devices and they will be at least good enough, and they will offer all sorts of advantages over the Apple devices because they are “allowed” to experiment and evolve rapidly. And just like phones, in short order there will be Apple’s niche walled garden versus platforms that are more open and flexible for content providers. Look for an end-to-end Adobe solution where Adobe is satisfied selling tools and supporting a plethora of devices, and Adobe does not hijack 30% of revenues from content.

Apple’s strategy is a “king maker” strategy. Apple defines what it finds interesting, and offers that up. It also defines what it doesn’t find interesting, and erects barriers to its entry. The way it defines interesting and uninteresting is on willingness to pay a de facto 30% to Apple. In-app purchases are always going to be easier than offline purchases. Since Apple controls the activation game, it will go even further to make in-app easier than external. There are no competing in-app systems on the platform, and Apple demands offer parity in-app with external.

I can see why Time balked right now. They can always join later if Apple’s 30% is the best route to profits. In the meantime, they retain pricing flexibility and can use their influence to help the good guys win, or at least marginalize Apple to a point where they might play for completeness but don’t take much of a hit on the mandated 30%.

paikinho

retain pricing flexibility and can use their influence to help the good guys win
———
So the good guys win? Is apple the bad guy?

paikinho

Bosco,
“To answer it the way you?ve phrased it from a publishers POV, the publishers would only offer their content through Apple and not through other electronic channels.”
————
I think you are not accurate. Publishers will offer their products via multiple sources. Apples offerings don’t cover Android or Windows environments. Or even other future potential markets.

According to you, Android will make up the vast bulk of the smartphone/tablet market to which I agree.
So I think publishers will publish with Apple to get apples contingent.
Publishers will publish with google or other alternative sites like Amazon perhaps to get at the other 75% of everybody.

I don’t think you can say that publishers who go with apple will only publish in apples environment when apple isn’t explicitly demanding that. And publishers will not just use apples payment method for any reason other than to publish in apples environment.
For every other store publishers go with, I would think that they would negotiate deals separately with each and accept a payment method which is ammenable to both. Don’t you?

paikinho

Apple defines what it finds interesting, and offers that up. It also defines what it doesn?t find interesting, and erects barriers to its entry.
———
You make it sound as if users and developers are just cannon fodder and drones. This is also not entirely accurate.
Users and what their needs are always play a big role. Developers and their needs play a role in apples decisions as well.

Bosco (Brad Hutchings)

According to you, Android will make up the vast bulk of the smartphone/tablet market to which I agree.
So I think publishers will publish with Apple to get apples contingent.
Publishers will publish with google or other alternative sites like Amazon perhaps to get at the other 75% of everybody.

So explain why Time (a very healthy, established publisher with multiple high-profile brands) is targeting everything but Apple. The outcome is that iOS users are without apps for Time properties, which contradicts what you wrote in the next post about users’ needs playing an important role in Apple’s decisions.

I don’t think that Apple can stick up arbitrary toll booths and work in the interests of users and developers. That’s not to say that Apple won’t be wildly profitable in the short term with that approach. In the long term, when other vendors more closely align their interests with developers’ and users’, such profit opportunities just won’t be there. They aren’t natural and take a lot of work to prop up.

Bosco (Brad Hutchings)

So the good guys win? Is apple the bad guy?

Apple was the bad guy the day they rejected the South Park app more than two years ago. They profit wildly without all the silly platform control games. They don’t have to do this crap, as will be demonstrated yet again when the iPad slips to niche market share. Tight platform control (mainly to allow Apple to erect unnatural toll booths) is a cost borne by users and developers, not a feature.

paikinho

So explain why Time (a very healthy, established publisher with multiple high-profile brands) is targeting everything but Apple.
=======
They are looking out for their own business interests. Apple doesn’t float their boat currently perhaps? They are not sure how profitable it will be and are pursuing other avenues.

If other publishers are making great profits by teaming up with Apple, then eventually Time will succumb to the evil empire.

Apple and any other company can stick up toll booths. In fact that is really the norm of business. You stick up your toll booth and see if you can make money at it. Such decisions are rarely arbitrary except by the delusional.

Most businesses do this sort of thing based upon past experience and statistical modelling. And if their profitability lags then a company will seek to make some changes.

Business is a fluid thing, especially when you are dealing with mega-corporations. There usually isn’t one decision, as in “this is how things will be, we’re not changing a thing and everyone can lump it if they don’t like it.” Companies in general are much shrewder in their assessing of markets and what a market will bear. Apple has seemed to be especially gifted at it. That is why they are the darling of the bilked and the darling of those who would bilk.

You seem to think that Apple always is acting without metrics and calculation and it is simply not accurate. They have been better at it and even seemingly in a counter-intuitive way.

I guess since you view the company as evil, that this is why you are galled so much. I fear you have a rugged decade ahead of you as you spend inordinate amounts of your productive day debating minutia about the day to day notices with people who have no more clue about all of this than do you. And as you wage the commentary war, I can’t help but think you would make more money if you just spent time developing more apps.

It reminds me of building sand castles at the beach. Eventually it is all a wash and natural forces prevail. Apple seems to be doing fine even without your expertise on how they should run a mega company and they will for quite some time. If they are to fall into irrelevance it won’t be during this coming decade since they seem for the moment to be on an upward swing. Who knows what will happen next decade, but I wouldn’t bet on the collapse of Apple this decade.

As to the cost borne by users and developers, I think most users yell yippie at each new thing they can do with their complicated machines. If something isn’t available, they think ... wouldn’t it be great if this was available. If enough people want something… then someone will make it happen. That is just business.

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