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Apple Officially Launches Subscriptions On The App Store - Offers New Revenue Split For Publishers

Apple Officially Launches Subscriptions On The App Store - Offers New Revenue Split For Publishers

February 15, 2011
In a press release this morning, Apple officially introduced the new in-app subscription feature for the App Store. Already present in The Daily for almost two weeks, the new feature will allow all content publishers to let readers subscribe to a publication from within an app, and be billed on a recurring basis. The system is fairly simple. Publishers set the price and length of the subscription, and users can sign up from within the app, then manage their subscription from a dedicated tab in the App Store. One interesting change is the way Apple will be splitting revenues from these subscriptions. In a nutshell, subscriptions started from within the app will follow Apple's traditional 30-70 split, where the publisher only gets 70 percent of the revenue. Subscriptions started outside of the app (for example if you sign up on a publication's website or any similar deal), will result in Apple not taking any cut. However, publishers can't force you to leave the app to sign up on the web (using links and such). Furthermore, Apple finally gave in to publishers, and will share your private data, such as your zip code as long as you agree. Lastly, subscriptions are believed to be tied to Apple's upcoming 4.3 release of iOS. This announcement leads us to believe it might be released very shortly. What do you think? Good news, or are subscriptions freaking you out? Full press release, Steve Jobs quote included:
CUPERTINO, California—February 15, 2011—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. 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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