Apple rolls out App Store subscription plans


Apple (NASDAQ:AAPL) launched a new subscription service for all content-based apps in its popular App Store application storefront, enabling publishers to establish recurring payment plans for apps. However, Apple is mandating that if a publisher is making a subscription offer outside of the app, the same or better offer be made inside the app. The new service applies to "magazines, newspapers, video, music, etc."

The concept is similar to how Apple manages in-app purchases and uses the same App Store billing model. Publishers will set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly) and then customers will click on that and be charged accordingly. Apple said that it will get a 30 percent revenue cut, just as it does for in-app purchases.

In addition to newspapers and magazines, the subscription service seems to apply to video services like Netflix and music services like Rhapsody and Spotify. According to AllThingsD, there is also a June 30 deadline for publishers to comply with he new guidelines. "For existing apps already in the App Store, we are providing a grace period to bring your app into compliance with this guideline," according to a memo sent to publishers earlier this year. "To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011."

"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," Apple CEO Steve Jobs said in a statement. "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."

Apple said publishers will be able to sell digital subscriptions outside of apps on their websites, or can choose to provide free access to existing subscribers. The company said that since it is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Apple is requiring, however, that publishers provide their own authentication process inside the app for subscribers who have signed up outside of the app. Additionally, Apple said publishers may no longer provide links in their apps (to a website, for example) which allow the customer to purchase content or subscriptions outside of the app.

Apple also said 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, but that the use of that information will be governed by the publisher's privacy policy rather than Apple's. Publishers may seek additional demographic information from customers as long as they 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 policy.

For more:
- see this release
- see these two separate AllThingsD articles

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