Apple Launches Subscriptions For Content-Publishers On The App Store

Apple Launches Subscriptions For Content-Publishers On The App Store
As we heard at the Daily’s launch a few weeks ago, Apple was planning to
launch a new subscriptions model for content-publishers on the App
Store. And today, Apple is officially announcing the new service for
magazines, newspapers, video, music and more on the App Store.

Here’s the revenue breakdown: 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. We’ve pasted the release below.

Apple also says that if publishers are selling a digital subscription
outside of the app, that same subscription offer must be made available,
at the same price or less, to App Store customers (which we had
previously reported). In addition, publishers may no longer provide
links within their apps that would allow the customer to purchase
content or subscriptions outside of the app.

From the release, it’s unclear if any publishers (besides The Daily)
have signed on to use the new model. And it should be interesting to see
how magazine and newspaper companies react to this new model. The new
model will also possibility have an impact on subscriptions from video
content companies like Netflix and Hulu, as well as Amazon’s Kindle apps
on the App Store.

Apple Launches Subscriptions on the App Store

CUPERTINO, Calif.–(BUSINESS WIRE)–Apple® today announced a new
subscription service available to all publishers of content-based apps
on the App Store℠, including magazines, newspapers, video, music, etc.
This is the same innovative digital subscription billing service that
Apple recently launched with News Corp.’s “The Daily” app.

“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”
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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