Apple Launches Subscriptions on App Store

A couple of weeks ago, Apple rolled out its daily newspaper, The Daily, for the iPad. Now, Apple has announced a new subscription service available to all publishers of content-based apps on the App Store – magazines, newspapers, videos, music, etc.  It will have the same digital billing subscription service as The Daily.

The service will work the same way customers have purchased apps and in-app purchases.

Publishers set the price and length of subscription, then with one click, customers pick the length of subscription they want and are automatically charged based on their commitment. Customers will also be allowed to cancel the automatic renewal of subscription. Apple processes all of the payments, keeping its same 30% share that it does 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 Apple CEO Steve Jobs. In essence, Apple is simply asking that if a publisher is offering a subscription offer outside the app (i.e., bringing new customers to the app on its own), that a same or better offer be made inside the app, so customers can choose where to subscribe from – outside or inside the app.

It sounds a bit confusing, but in general, if a subscription is made within the app, it means Apple takes a cut of the profit (for supplying support of said app). If a customer finds an app on his or her own terms, and subscribes to a service without already owning the app, then Apple takes no profit.

Publishers will also be allowed to sell digital subscriptions on their web sites, which would also yield no revenue sharing between Apple and the publishers.

The move will open up more subscription options to owners of the iPad, iPhone, and iPod touch.


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Categories: Gadgets and Gizmos | iPhone Apps

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