Apple officially launches App Store subscriptions
When Apple's Eddy Cue, Rupert Murdoch and others launched the iPad-only newspaper The Daily, Cue promised that its subscription model would be made available to other iOS publications soon. Today, Apple has officially launched App Store subscriptions.
Subscriptions are purchased through the apps themselves using the same billing system that the App Store has employed for in-app purchases. Individual publishers are able to set their own prices and lengths of subscriptions. As for Apple, it takes the same 30 percent share that it currently pulls from other in-app purchases.
Customers can manage their subscriptions from a special account page, and cancel a subscription when they're ready. In a press release, Steve Jobs explained the pricing model, saying, "...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."
Note that publishers may not provide links in their apps to purchase options outside of the app (like a subscriber website).
This has been a long time coming. Now for the big question: will people subscribe to magazines and newspapers on their iPads?
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). Then 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, keeping the same 30 percent share that it does today 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," said Steve Jobs, Apple's CEO. "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."
Publishers who use Apple's 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 web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these 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 web site, 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. 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 such 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 revolutionary App Store offers more than 350,000 apps to consumers in 90 countries, with more than 60,000 native iPad™ apps. Customers of the more than 160 million iOS devices around the world can choose from an incredible range of apps in 20 categories, including games, business, news, sports, health, reference and travel.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple is reinventing the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.
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When Apple's Eddy Cue, Rupert Murdoch and others launched the iPad-only newspaper The Daily, Cue promised that its subscription model would...
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I hate this model because I like Apple devices, and I primarly use this for ebooks. If Apple enforces this on Amazon and Barnes & Noble then they will not be able to have applications on the iPhone. 5/6 of the big publishers now have 'Agency Models' where the publisher sets the price, the seller gets 30% and the publisher gets 70%. In addition the retailer can't change the price.
If Apple enforces this then shortly iBooks will be the only way to get books on the iPhone. This might be Apple's goal, however it will make it much more likely that I will switch to a different platform, something I can do because I have only purchased multiplatform books (which iBooks I'd not)
If it were possible to get an app on an iOS device other than using iTunes, I could just about swallow this. But Apple won't even allow an Amazon or Sony to host the App and the content on their own site. As you can only (legitimately) purchase and install apps via ITMS and iTunes.
So yeah, this sucks.
Brian
I like this idea, as it will force publishers to use a single pay model more often, and not try to rip us all off with costly subscriptions for all content.
And for things like Zinio, Press Reader, MLB.com, Netflix, Hulu, etc., we can sign up on their sites.
To answer the original question on whether I will subscribe to magazines - Yes.
I'm enjoying the Daily and have come to grips with the fact that good content costs money to sustain. Now - the Daily isn't "great" content but it's worth 99 cents/week to me as a daily diversion.
I hope this opens up more magazines to their own "native" apps, and gets them out of convergence apps like Zinio.
> I think that's why Apple added the part about publishers having to offer the same price or less for in-app. That way they won't charge Base Price * 1.3 on iOS to compensate.
Yup. They'll just increase the prices they charge for iOS digital content regardless of how it's purchased, since most iOS purchases will be made in-app anyway, and they can't pass on the Apple tax any other way.
If Apple tries to apply this to services like Netflix and Hulu, the result will likely be a special pricing tier for Apple. Netflix will stream to your PC or Roku for $8 a month, but iOS users will have to subscribe to "Netflix iOS Edition" for $10 a month.
The problem is ebook publishers, who are now generally required to sell for prices set by the publishers. They make under 30% on such ebook sales already, so the Apple charge would mean they could no longer operate on iOS without losing money. Their only hope is strong pushback from Amazon, which is no doubt going on behind the scenes as we speak.
But many publishers won't have iOS-specific digital content. Look at Zinio. Their content can be viewed on multiple platforms - Windows, Mac, Linux, iPad. Are they really going to raise the price for every customer just to serve the iPad market?
February 15 2011 at 1:49 PM Report abuse Permalink rate up rate down Reply>But many publishers won't have iOS-specific digital content. Look at Zinio. Their content can be viewed on multiple platforms - Windows, Mac, Linux, iPad. Are they really going to raise the price for every customer just to serve the iPad market?
I expect they'll either raise the prices for everyone, or announce Apple specific pricing to access their content on iOS. Technically the Apple-specific pricing will apply whether you pay in-app or on a web site, so they'll be following Apple's rules.
It'll look something like this:
Hulu on the web: free
Hulu on the web, plus Roku, Wii, Playstation, PS3, DVD players, TV sets: $7.99
Hulu Apple Edition: viewable on all of the above plus the iOS: $9.99.
You won't be getting iOS-specific content. The extra money will just pay for the Apple tax.
Ebook publishers can't raise their prices though, since they're often set by the publishers. So they can follow Apple's rules and lose money, and wait and see if Apple kicks them off.
So, Google can make the same for Kindle for Android and MS for Kindle for WP7
February 15 2011 at 12:02 PM Report abuse Permalink rate up rate down Reply@Goodman, I think that's why Apple added the part about publishers having to offer the same price or less for in-app. That way they won't charge Base Price * 1.3 on iOS to compensate.
Now they could raise prices a whole. I could see a tricky publisher making their subscription "iPad enabled" and bumping the price up 30%. If they get subscribers from the AppStore no loss. If they get off App subscribers they net the extra 30%. That's what I would do... They can even carry that increase over to Android and (rightly) claim they are off setting ongoing development costs.
It's refreshing to see that Apple will continue to offer a way to authorize subscriptions purchased outside the iOS ecosystem. I would hate to see prices on sports subscriptions (such as MLB.TV) be raised to compensate for the 30% fees.
February 15 2011 at 10:40 AM Report abuse Permalink rate up rate down ReplyBut prices WILL be raised to compensate for the 30%, since most iOS content will be purchased in-app. When you hear that some media company is now offering their content on the iOS, you don't go to their web site. You pick up your iOS device and start downloading.
February 15 2011 at 10:57 AM Report abuse Permalink rate up rate down ReplyThink of it like this. Apple has designed and built a new mall in an upscale part of town.
Buying the land, building the structure, advertising to bring people to this new mall wasn't free.
Should Apple let anybody set up shop in their mall? Isn't it logical to charge retailers a fee to build their storefront in this mall?
Would a restaurant allow you to bring outside food and drink inside?
Apple has invested billions in iOS. Why should publishers get a free ride?
@deviladv, Apple simply needs to distinguish between a an in-app purchase where it is entitled to charge 30% and a periodical subscription to new content in the same app.
If I play a game where I make an in-app purchase for some extra levels then that is not the same as a periodical publication. It's clearly not the same or Apple wouldn't have needed to launch a new subscription service.
The point is not whether Apple should get a cut or not - the point is whether the cut should be 30%.
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