Apple Blinks on the 30% In-App Purchase Scheme.

  • Posted: 09 June 2011 08:26 AM

    Peter Kafka @ AllthingsD is reporting:

    Apple appears to have backed down on a major component of its new in-app subscription rules, which should provide a big boost to content companies: It has scrapped a rule requiring apps that play content like music, movies, and books to also sell the same content within the app itself, and share the revenue with Apple.
    Now, apps can offer access to content purchased outside of Apple?s walls, as long as the app doesn?t have a ?buy? button that connects consumers directly to an external store. That is: Apple won?t make it easy for users buy in-app content without going through Apple?s store, but it won?t outlaw it, either.
    The changes to Apple?s App Store Review Guidelines, published today and first noted by MacRumor?s Jordan Golson, don?t address Apple?s control of credit card information.
    Which means that some print publishers, including the Financial Times and the Wall Street Journal, may still not be willing to adopt Apple?s subscription rules, which kick in at the end of the month. (The Wall Street Journal is owned by News Corp., as is this Web site).
    But for many other content companies, including Netflix and music services like Rhapsody, the bigger issue has been the 30 percent revenue cut that Apple was going to extract every month for all in-app subscriptions. Many of them appeared ready to accept Apple?s rules anyway, and simply try to persuade most customers to sign up outside of Apple?s walls, so they could keep 100 percent of their revenue. Now, as long as they?re willing to give up access to Apple?s marketing might ? the company just announced it has billing relationships with 225 million customers ? they don?t have to worry about it.
    But Apple?s rules still appear to pose a problem for book sellers like Amazon. You can?t purchase books directly from Amazon?s Kindle app, but the software does have a ?Kindle Store? button that takes buyers to Amazon?s Web store. But Apple?s new rules look designed to ban exactly that sort of thing.
    Here is the language governing subscriptions that Apple introduced back in February:

    11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

    And here are the new rules:

    11.13 Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a ?buy? button that goes to a web site to purchase a digital book, will be rejected

    11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.

    Article can be read here.

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  • Posted: 09 June 2011 11:50 AM #1

    I think this is a wise move by Apple, as the previous policy would have caused huge problems with popular third-party services such as Kindle, NetFlix, Hulu Plus, etc. I’m glad to see they changed their mind on that.

         
  • Posted: 09 June 2011 01:56 PM #2

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  • Posted: 09 June 2011 02:00 PM #3

    Please, it’s not necessary to speak ill of people who haven’t even posted in this thread yet. This could be a great topic for discussion and I don’t want to turn it into a fight with only five posts so far.

         
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    Posted: 09 June 2011 02:17 PM #4

    David Nelson - 09 June 2011 05:00 PM

    Please, it’s not necessary to speak ill of people who haven’t even posted in this thread yet. This could be a great topic for discussion and I don’t want to turn it into a fight with only five posts so far.

    Dave I hardly think your the one speaking ill.  Sometimes you need to pull the weeds from the garden, but since this is a public forum, I realize that everyone is free to offer their opinion, it just gets old when a single individual thru their dival causes a very civil group to stoop to their methods. 

    As far as the 30% I think that was Apple’s negotiating position and if the media folks were unhappy they could take their business elsewhere or continue to negotiate with Apple.  The FT choice was always available to others, but obviously some continued to negotiate and obviously Apple compromised.

         
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    Posted: 09 June 2011 03:08 PM #5

    In hindsight this was the only thing Apple could do to adjust for Kindle and Netflix. Those are popular services partly because their prices are so competitive. They don’t have margins available to sacrifice to the App Store. They are also well-known enough that new customers will sign up for accounts via the browser in order to use the app.

    This is not the case for newspapers & magazines. They are already charging too much for digital content and now some want to charge even more for content subscribed via the App Store. Dumb & dumber.

         
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    Posted: 09 June 2011 03:14 PM #6

    Always a fine balance of which to grab, market share or profits.