Apple Launches Subscription Plan For Apps

At long last, Apple has rolled out its subscription plan for apps delivering content.

The service will apply for all apps delivering content--magazines, newspapers, videos and music--on the same model as the recently launched app for News Corp's "The Daily." Under the plan, Apple will keep 30 percent of all profits on apps sold, with publishers setting the price and the length of the 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 Steve Jobs in the statement. "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."

So if publishers sell app subscriptions through their own site, Apple will not share in revenue. Not only digital papers like "The Daily," but movie services like Netflix or book sellers like Amazon, will fall under the policy. Users can manage their subscriptions within Apple, and if they choose to buy from Apple directly, publishers will lose that 30 percent share, which some predict will present future struggles between Apple and content publishers.

Apple also announced that privacy features would be in the hands of the publishers, rather than Apple.

Comments

[noob1]

08:22 AM on 02/16/2011

Hey pal, glad you have a moment to chat. I was wondering if you could give me 2 dollars every month? Thanks guy, you're the best, eh.

[StDymphna]

03:03 AM on 02/16/2011

Will we be charged by the carrier for the bandwidth of some apps soon? Hitting you from left, right. and the keister.

[Allyatx]

02:40 AM on 02/16/2011

If you follow the business model Apple may have saved some dying magazines and news papers.

[Morgantheaxe]

02:01 AM on 02/16/2011

Well Imagine that. A company selling products in their store wanting to make money on those products. Bahhh Apple must be evil!!! How dare they want to make money on something they sell in their stores!!! Apple should be forced to let anyone sell their product in their stores and of course they should be forced to publish their code on hacker websites also. Maybe perhaps include some development tools to help the hackers along!!!

Hey I know it sounds bizare but ihaters demand this very thing on every single one of these thread.

[NewsJunkie9]

09:26 AM on 02/16/2011

I see apple's point of view. They spent a lot of money and development effort to make one of the most compelling app stores that exists today. They do not see a reason to loose money via bandwidth usage and loss of commissions on their own products. Apple still has to maintain the store, pay for bandwidth, and make a reasonable finders fee or referral cost. I see them as a middle man, which they are. Middle men always take a cut. Would you fault barnes and noble for making a few dollars when they sell a physical book at a real store? How about a travel agency (or expedia/orbitz/etc) from getting a referral fee for booking a flight and hotel?

I think this evens out the playing field for small publishers and self publishers as opposed to punishing them. They do not have to waste time and money creating a separate marketplace to sell their content, they just need to upload it and get paid, and at the same rate the larger companies. It's an even playing field, and the large publishers do not want that. Economies of scale mean very little in terms of digital content, the key is getting the word out about the content you are selling and making it easy to purchase. The app store provides help on both of those fronts, it's worth a bit of commission.

[Samiiam]

11:32 PM on 02/15/2011

What does this mean for my Amazon Ebooks on my IPad?

[HonestJohnnis]

12:32 AM on 02/16/2011

nothing. :)

[Morgantheaxe]

02:39 AM on 02/16/2011

It means that if you buy them through the app you downloaded from the Apple app store Apple will get paid for them in the future. If you got the iphone app from Amazon.com and buy them, in the future of course this isnt retroactive, then Apple gets nothing.

Im an ibooks fan myself. One less place for me to register on if I dont use amazon or nook.

[ManuOB1]

10:08 PM on 02/15/2011

If HuffPo goes subscription, I'm outta here.

[KarateKid]

09:42 PM on 02/15/2011

Apple v.s. Android. What a silly argument. If you like what you have, isn't that all that matters? These arguments are so puerile.

[lilylee86]

09:36 PM on 02/15/2011

Luckily, I don't have an Iphone...

[KarateKid]

09:32 PM on 02/15/2011

As far as I can tell, no one is forcing anyone else to subscribe by either means. iTunes is Apple property, and the subscription apps are not forced to do anything.

[jgeurian21]

11:20 PM on 02/15/2011

True but by your logic MS should charge Apple 30% on all iTunes purchases. I mean MS has MarketPlace which is pretty similar to iTunes. Windows comes pre-installed with a media player like iTunes. By your logic Windows is Microsoft's property and Apple isn't forced to do anything. Of course we all know what would happen if MS took this approach. I am sure more that a few people defending Apple now wouldn't be so kind to MS if they took a similar approach.

[Morgantheaxe]

02:06 AM on 02/16/2011

Not even close to the same thing and you example couldnt be farther off.

Lemme make this ez for ya:

1. You make a product. You want to sell that product at Best Buy. Best buy wants to tack on a profit to you product or they will not sell it.

2. You make a product. You want to sell that product on itunes. Apple wants to tack on a profit to that item or they will not sell it.

3. You make a product. You sell that item in a flea market or out of your own store. Apple and Best buy don't want or get a dime of it.

4. You make a product. You want to make money on that product. You stop selling it at flea markets and quit paying rent and sell it through itunes or retail outlets like Best buy and don't begrudge those guys their cut because you are making money too.

[JasonMcl]

08:14 AM on 02/16/2011

Could you imagine if MS actually prevented you from installing anything not specifically approved by them? All they did was try to integrate internet explorer into the OS and look what happened!

It is a good thing for Apple they are bleeding market share, because if they had a majority now you would easily see an Anti-trust ruling based off of this.

It is waaaaaayyyy worse than what Microsoft ever did.

[Sacchinftw]

07:44 PM on 02/15/2011

"A fool and his money are soon parted."
- Thomas Tusser

[Morgantheaxe]

02:08 AM on 02/16/2011

70% of something is better than 100% of nothing.


--Morgantheaxe

[JasonMcl]

08:15 AM on 02/16/2011

- hobbes the tiger.

[Krek]

07:32 PM on 02/15/2011

This article doesn't mention the fact that Apple has also banned publishers from including a link within the app to the external site that would allow users to make a choice between buying from Apple or buying directly from the publisher, meaning that the user is being discouraged from finding out that they could be getting the same app more cheaply. Apple innovation at its very best and a practice that could very well leave them open to an anti-trust lawsuit.

[KarateKid]

09:34 PM on 02/15/2011

How do you know it's cheaper? Maybe it's the other way around. If a company benefits by accessing Apple's millions of customers, I see no problem with Apple getting a fee for that. It seems fair to me. Apple is not forcing these subscription companies to do anything, they want access to people who buy through iTunes and why should they get something for free?

[jgeurian21]

11:12 PM on 02/15/2011

So you would be in favor of MS charging Apple a 30% fee in all iTunes purchases done on a Windows machine? Seems about the same thing. I would think that is absurd. Clearly you do not.

[European1919]

08:34 AM on 02/16/2011

It is these publishers and their apps that are turning the iPhone into what it is, making a huge turnover for Apple in the process. Possibly Apple should be grateful instead of greedy. And it stands to reason, that an app purchased directly from the publisher is cheaper cos Apple have put their percentage (30) on it. Of course Apple should pay MS 30% for each purchase made from an MS machine. Why would that be absurd but Apple's money-grabbing scheme is not?

[Morgantheaxe]

02:14 AM on 02/16/2011

So sorry but not even close. There is NOTHING and I mean NOTHING preventing say Amazon from putting an iphone app on their own website that directly links you to their inventory and their billing which totally excludes Apple. Why in the world does Apple have to also allow Amazon to sell things for free withing Apples own store? If they wanna sell from itunes or ibooks they have to pay for that shelf space and processing. If they want their app in Apples (now this is important here) app store (notice I didnt say Amazon's app store) they have to pay for the right to be there. Again Why in the WORLD or more importantly in your mind does Apple have to do this for free for anyone?

[Krek]

02:42 AM on 02/16/2011

Jeez. At least read my post. This is a consumer CHOICE issue. It's not about Apple playing the 'moustache pete' and wetting their beak for every app sold (though 30% is a bit ridiculous). It's about them not allowing the publisher to offer the consumer a CHOICE by including a link in the app that says - 'you can buy your subscription here through Apple OR you can buy it directly from our site - the CHOICE is yours.'

From Engadget:

"Apple is no longer allowing applications to include a link to an external site for purchasing, which means vendors will have trouble getting new users to pay them directly instead of using Apple's simple but heavily-taxed option."

CHOICE - abusing your market position to deny the consumer a CHOICE is a violation of anti-trust laws.

[jws2346]

07:20 PM on 02/15/2011

Phew, for a minute there I thought it said prescription , you know like getting permission (a script) from your head shrink?

[excellent chef]

06:34 PM on 02/15/2011

There's a reason why Mac users are smug; and a reason why Windows users are frustrated... and never the twain shall meet

[jasonedward]

06:47 PM on 02/15/2011

I have to say that I'm not at all frustrated.

[Estevan Benson]

06:53 PM on 02/15/2011

There's a reason a Windows user's frustration is quickly mitigated by the extra $100 they got in their pocket.

[mango55]

06:58 PM on 02/15/2011

I gladly pay the extra $100 to be frustration-free. I like things that are designed well, and work.

[Sacchinftw]

07:42 PM on 02/15/2011

$100? You're kidding me right?

I saved just shy a grand on the last PC I made when compared to a mac with inferior specs.

[MarkDykstra2011]

06:31 PM on 02/15/2011

A friend of mine commented on what he thought was my iphone3GS. He exclaimed, Wow, did they get a bigger screen?

I told him it was the Galaxy S and he said it puts the iphone screen to shame.

Rock on Android, and Super Amoled!!!!!!!!!

[excellent chef]

06:37 PM on 02/15/2011

Wait till your Galaxy starts crashing every 5 minutes after owning it for a few months. its all bells and whistles, but the noise soon dies down

[MarkDykstra2011]

07:02 PM on 02/15/2011

Not a problem here at all. I just flashed a new ROM . works great.

That is what is great about Android. We have a world community of individuals making it better and better, Open Source rocks.

[CheapTrick]

06:46 PM on 02/15/2011

And if "big screen" is what you want, get a Galaxy S. If you want a device that's going to work...

[MarkDykstra2011]

07:03 PM on 02/15/2011

Mine works GREAT.

If I want to pay for a LOGO and crippled device I would buy and iphone and get nickled and dimed to death by iTunes.

I control my phone, not vice versa.

[excellent chef]

06:29 PM on 02/15/2011

Macs get viruses? Not on your Nellie. Well, ok, you may get viruses in a Mac if you are also running Windows on it.