Apple Launches Subscriptions On the App Store
Earlier today, Apple announced the arrival of content-based app subscriptions. The new subscription functionality—which debuted in NewsCorp’s Daily—will allow customers to choose from a number of subscription options (weekly, monthly, bi-monthly, etc.) to new content from their favorite app publishers and automatically receive this content for which they will be accordingly billed based on their subscription.
Digital magazine subscriptions immediately come to mind as the most obvious content choice to take advantage of the new feature; currently, customers must purchase each digital iPad issue separately, even if they currently have a subscription to the magazine.
To appease the publisher need for user information, Apple will be granting publishers access to some personal customer information like name, email address, and zip code, but the user must opt-in upon signing up for the subscription.
While this seems like a no-brainer, some app publishers are unsatisfied with the various restrictions that will be placed upon them. For instance, all subscriptions will be processed by Apple and subjected to the normal 70-30 split that currently takes place with other sales through the app store and broader itunes store.
In the Official press release, Apple CEO Steve Jobs, attempts to address these criticisms by stating,
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…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.
It will be interesting to see how these new rules affect services like Netflix and Hulu, which already have their own subscription service going, but will now now forced to share 30% with Apple.
Publishers who are not happy with the new changes however, will soon be able to switch or also offer the same content for Android, as in-app purchases are set to begin shortly in preparation for the rapidly advancing Android tablet army.