Understanding the Apple App Store Subscriptions

Apple announced yesterday they launched subscriptions in the App Store.  It’s not entirely a surprise to most developers ever since the release of The Daily by News Corp which offers in-app purchasing.

Interpretation

This announcement from Apple seems to have caused quite a stir on the interwebs.  The press release from Apple is pretty clear from a high level:

“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.

Steve goes on to say:

“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.”

This is the part that seems to confuse people a bit.  It says, if you offer subscriptions out side of the app store that you need to also need to provide an offer in the app store as good as the one outside.  When a user decides to buy from within the application, Apple keeps 30%.

It’s About the Customer

In my opinion, the bottom line is about customers and the user experience for them.  I have to admit that I would rather pay for a subscription from within the application as opposed to going outside to a web site and enter my payment details there.  If I use iTunes, Apple has all my information and like buying an app, it is very easy.

The Bright Side

This gives developers a call to action in a sense, for one, make your subscription service super-easy so people don’t mind coming to your site to manage subscriptions.

One thing to keep in mind, users may be more willing to subscribe *if* they can do it on the app store, therefore giving the developer/publisher sales they may not have gotten otherwise.

Just as the Mac App Store opens more opportunities, this seems too as well.

Is there a Dark Side?

Maybe. There are still questions that are not clearly answered.  What about applications which offer subscriptions today, like Netflix?  Will NetFlix need to start paying Apple 30%?  It seems that way if NetFlix allows a user to pay in-app, but that’s not how I pay them.  I have a subscription I maintain on their web site.

I think this holds true with Kindle book purchases too where I buy on the Amazon website and the books comes to the Kindle app on my iPad.

Conclusion

It seems when Apple comes out with something new or makes a change to rules, people initially think they are onerous and contain ulterior motives.  If one reads what Steve Jobs has said, this is yet another way for a publisher to get paid for content.

If I am missing something obvious, I would love to hear about it.  As an iOS developer I really want to understand as much as I can.

I will keep an open mind until proven I shouldn’t.