Apple Launches Subscription Service

By Marcus Yam
published

Getting the iScriptions... or iSub?

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 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.”

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.

In related news, free viewing of The Daily has been pushed to February 28, leading some to believe that is when Apple will be dropping iOS 4.3.

Marcus Yam
Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
14 Comments Comment from the forums
  • Benihana
    "The use of such information will be governed by the publisher’s privacy policy rather than Apple’s."

    Yeah, I thought it wasn't Apple's policy as they did not ask for SSN.
    Reply
  • kewlx
    “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,”

    So what happens to the amount of the share when a new subscriber joins or rebuys??
    Reply
  • saiyan
    Based on what most new articles have explained, Apple's guideline requires publishers' apps to provide in-app option for purchasing subscription if they also provides external links for customer to purchase subscription on publishers' web sites.

    That means customers have to ways to purchase subscriptions:

    1) In-app purchase: In this case Apple gets 30% of revenue share and publisher gets 70%.

    2) Web purchase: Apple gets 0% and publishers keep 100% of revenue.

    Now the question is will iOS users use in-app purchase option or click on a link to open a browser to publishers' web sites for subscription purchase?
    Reply
  • kewlx
    Now the question is will iOS users use in-app purchase option or click on a link to open a browser to publishers' web sites for subscription purchase?

    Probably only those that are lazy will do the apple way cuz it doesn't hurt them but for those of us that know this will probably try to help the DEV out more than apple
    Reply
  • eddieroolz
    What's the point of paying for subscription (for news and etc) when it's available at your fingertips on the web?
    Reply
  • hoofhearted
    I see a ton of MMORPGs coming out and using this.
    Reply
  • maestintaolius
    The way this article is presented makes it seem like this is a 'new feature' when, based on other articles it sounds a heck of a lot more like a money grab by apple. Apple is insisting that all apps with web or other outside purchasing methods (such as b+n ebooks, magazine subscriptions, etc) also have the in-app purchases (which apple gets a 30% cut). Also, the app developers are required that the in-app purchases be the same price as the web purchases so dev's can't raise the price to make up for the 30% loss to apple.
    Reply
  • tntom
    This is not going to last as seen from the all the developers in an uproar and threatening to leave App Store.

    Example: "Developer A" makes a subscription based music streaming app for both iOS and Android. It costs $5/mon. Developer makes $2 while the other $3 goes to royalties, development, server maintenance, etc. Since Apple forbids providing a link or referring customer to your site to make payments, then Apple gets $1.50 leaving $0.50 for the developer. But on Android the Developer makes his entire $2.

    But if he increases the price for the iOS app he has to increase the price for the Android App as per Apple's policy. Which then in turn prices his app too high to compete. Then Apple starts offering same service themselves and keeps 100% of the money.

    The only logical choice for a Developer, is to either support Android only or to have two products under different names and different prices for both platforms. Only charging 30% more for the iOS version to recoup Apple tax.
    Reply
  • maestintaolius
    tntomThis is not going to last as seen from the all the developers in an uproar and threatening to leave App Store.Example: "Developer A" makes a subscription based music streaming app for both iOS and Android. It costs $5/mon. Developer makes $2 while the other $3 goes to royalties, development, server maintenance, etc. Since Apple forbids providing a link or referring customer to your site to make payments, then Apple gets $1.50 leaving $0.50 for the developer. But on Android the Developer makes his entire $2. But if he increases the price for the iOS app he has to increase the price for the Android App as per Apple's policy. Which then in turn prices his app too high to compete. Then Apple starts offering same service themselves and keeps 100% of the money. The only logical choice for a Developer, is to either support Android only or to have two products under different names and different prices for both platforms. Only charging 30% more for the iOS version to recoup Apple tax.Well, kinda, from how I understand it, you're still allowed to have a link that leads to your site for purchases. However, apple also requires that you also have a button/function within the app that also does the purchases in-app and at the same price as the website. The big catch is that for the one-click in app process the dev loses 30% to apple.

    Apple also expressly forbids charging different prices (unless the in-app purchase is cheaper) for the out of app purchases so devs can't up the cost 43% (1.43 * 0.70 = 1.001) to recoup the apple 30%. They also state that everything you can purchase outside the app also requires it be offered in app which makes me wonder about legacy issues and continuing subscriptions such as netflix (i.e. does apple deserve a cut of fee from someone who's been using netflix for 5 years just because they happened to use a netflix app?).

    Apple seems to be implying the apps sell stuff because they're on the iPhone; of course, one could also argue that the iPhone sells because of the apps available. Chicken, meet egg; egg, meet chicken. Personally, I tend to side with the devs, without the apps, the iphone is just another smartphone with a high gloss finish.
    Reply
  • dokidoki
    @tntom

    Er.. I believe you have your numbers backwards. It's $1.50 for the Developer and $0.50 for Apple, not the other way around, if we follow your example.

    And where are you getting this 'fact' that Apple will just offer the same service themselves and pocket 100% of the cash? They're not a news service nor do they offer any subscription-based games.
    Reply