Apple's relaxation of its app subscription policy allows publishers the freedom to price their suites of products as they see fit while rejuvenating the otherwise withering link to the iPad and iPhone.
That is INMA's conclusion from the sudden change in Apple's app subscription policy unveiled earlier today. The policy takes full effect June 30.
In typical Apple fashion, they have changed the rules — again — without explaining them. It took the trade press to uncover that a policy change had even been made. There is little evidence anything was communicated privately to publishers.
So, here is what we know:
- Apple still gets a 30% cut of any subscription a reader signs up for inside the App Store.
- Publishers can now offer an app subscription for a different price than what they might sell their app for in the App Store. Previously, the App Store price must be matched with the price outside the App Store, which severely twisted the publisher's ability to bundle apps with Web with print — the clear direction of our industry.
- Publishers can't have a button or link to an external-to-Apple location that sells a subscription within the app.
What we believe this means is that if a publisher wants to run a digital subscription outside of the App Store, they can now do so without going through Apple — and not have to match the offer which appears in the App Store.
So if a newspaper wanted to offer a cross-media subscription bundle — say, a news app, paid access to a Web site, and a print newspaper — that bundle would match the offer via Apple. That created all kinds of potential problems, including running a full bundle subscription through Apple which would then get a 30% revenue cut not only on the app but the Web and print aspects!
That prospect had the net effect of publishers working feverishly on workarounds to Apple.
Publishers are now free to sell subscriptions anywhere they like. And for those subscriptions sold via Apple, publishers are now allowed to charge whatever price they want for subscriptions in-app to cover the 30% cut Apple will take.
More than likely, this will mean that it will be more cost-effective for the publisher to sell their iPad app at a premium inside the App Store and discount it on a stand-alone basis or bundle with a multi-media subscription on their own Web site - where they can also capture a subscriber's information.
Three developments are driving this change:
- The fast-rising Android and Kindle are changing the competitive landscape. Apple needs to dominate the market more than they need nickels and dimes from publishers.
- Workaround solutions, like the Financial Times' HTML5 announcement and Time Inc.'s decision to grant iPad reading access to print subscribers but not take new subscriptions through the iPad.
- Consistent pressure from news publishers at multiple levels: regulatory, legal, market, press freedom.
INMA was early to see how market forces would push Apple to change its policy. That appears to be the case with today's news.