Apple launches subscription service on App Store

Apple today announced the launch of its long-rumored subscription service for the App Store. According to the announcement, the service is available to all publishers of content-based apps on the store, including magazines, newspapers, video, music, and more. The service will use the same App Store billing system as In-App Purchases, and will allow publishers to set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Customers are able to choose their subscription length with one-click, are automatically charged based based on their chosen length of commitment, and will be able to review and manage all of their subscriptions from their personal account page, including canceling automatic renewals. Notably, Apple processes the payments, and keeps the same 30 percent share as it does for other In-App Purchases.

Customers who purchase a subscription through the App Store will be given the option of providing personal information—such as their name, email address, and zip code—to the publisher when they subscribe. The use of such information will fall under the publisher’s privacy policy, rather than Apple’s. The same rules will apply for any additional information provided to the publisher via the app, assuming the customers are offered a clear choice as to whether or not they want to provide the information, and are clearly told that any additional information will be handled under the publisher’s privacy policy and not Apple’s.

“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 Apple CEO Steve Jobs. “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 announcement goes on to say that publishers offering Apple’s subscription service from inside the app may also leverage other methods of acquiring digital subscribers outside of the app, such as selling digital subscriptions online, or providing free access to existing subscribers. Apple notes that there is no revenue sharing or exchange of customer information in such cases, and that it will be up to the publisher to provide an authentication process for such subscribers. In addition, publishers may no longer provide links in their apps which allow the customer to purchase content or subscriptions outside of the app.

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