Apple Announces App Store Subscriptions
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Earlier today, we wrote about The Daily extending its free subscription until the end of February, in a move that many of us think is to allow iOS 4.3 to release with the required APIs for in-app subscriptions.
In addition, Apple today announced its App Store subscriptions, which has now officially open the door to developers to offer you new content and bill you for that content automatically through your iTunes account.
Part of Apple’s announcement talks about how the revenue share mechanism will work:
“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.”
The revenue share model is simple. Apple will certainly leverage your relationship with the company via your iTunes account, and will try to cash-in (30% of revenue) on that by bringing you closer to the publishers. On the other hand, the publishers will have the big task to establish a closer relationship with you, so that you buy the content via an external subscription and they get to keep 100% of the revenue.
The announcement does not include any details about the highly anticipated iOS 4.3 release.
We would like to hear your comments. Will you buy subscriptions via iTunes because of its convenience? Or, will you buy the magazines and newspapers from external sites?
