Apple Launches Subscriptions on the App Store
On Tuesday, Apple rolled out its new App Store subscription service, and it validates longstanding suspicions about how the company would ultimately handle the demand for publishers to provide subscription based content through the App Store. What we have is an arrangement that largely gives publishers what they want.
In short, publishers of content-based applications can offer recurring billing, but they are strictly prohibited from providing external links to websites or any other digital territory where their content subscriptions are available. Apple is requiring that all subscription payments go through the App Store's new recurring billing option, which secures a 30% share of the cost for Apple but only when Apple is responsible for generating the new subscription.
"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 Chief Executive 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."
Apple did, however, slightly yield in terms of sharing customer subscription data. Protecting customer privacy is a key feature of all App Store transactions, Apple said in its formal press release on the matter. Customers purchasing a subscription through the App Store will be given the option to provide the publisher with their name, email address and zip code when they subscribe. In other words, subscriber information can be provided to the publisher - but only if the subscriber first sanctions it.
To read all the gory details directly from the horse's mouth, click here