Apple just rolled out its sweeping new subscription payment service for the App Store.
App Store users will now be able to pay for all digital content with one click within apps. Publishers will set prices and durations of subscriptions.
So, The Daily, for instance, can offer users a one click option to pay for a week of the newspaper at $0.99, or for a year at $40.
While publishers will have to offer the in-app subscription payment option, they will also be able to offer users the option of buying the exact same subscription on their own website. However, the price for the web subscription must be the same as the price for the in-app subscription.
It appears the new subscription plan won’t just affect publishers like The Daily, or the Wall Street Journal, but all app makers that offer digital content, including companies like Netflix, and Amazon. In the release, Apple says the new subscription system will apply to, “magazines, newspapers, video, music, etc.”
This is great for consumers who will have an easier time buying digital goods like newspapers and books in their applications, but it’s somewhat worrisome for developers and publishers.
If an app user opts for Apple’s simple in-app payment system, Apple keeps 30% of the sale. If a user goes through the publisher’s website — a more complicated process — the publisher will keep 100% of the sale.
If this is applied across the board to companies like Netflix and Amazon, it could be a problem.
Right now, Amazon kicks users to its website where they buy a book. Amazon gets 100% of that sale. If it has to offer users the in-app payment option, then it risks losing 30% of the sale.
That’s a hefty premium for Amazon to pay just to sell books on iOS devices. (We’re emailing Amazon and Netflix for comment, and will update you if they say anything.)
Beyond Amazon, publishers like Time Inc. probably won’t be happy with Apple having so much control over the customer experience. Users control their subscriptions through an iTunes account page making it easy to cancel a subscription whenever they want.
To any publishers, or developers concerned about paying the 30% Apple tax, Steve Jobs has a message — deal with it, it’s not a big deal.
Here’s the more detailed, nuanced answer from Jobs in Apple’s press release:
“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 per cent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 per cent and Apple earns nothing,” said Steve Jobs, Apple’s CEO. “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.”
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