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Apple Unveils Digital Subscription Service

Publishers can solicit customer data.



Matt Kinsman By Matt Kinsman
02/15/2011

Apple has officially rolled out its long awaited subscription-model for content publishers in the App Store.

Under the plan, if subscribers come to a publisher's app organically through the App store, Apple gets a 30 percent share. If the publisher brings a new or existing subscriber to the App, the publisher keeps 100 percent of that revenue.

Publishers may set the price and length of subscription and customers are automatically charged based on their chosen length of subscription.

Apple caused a stir several weeks ago when it rejected Sony's e-reader app for allowing purchases outside the store. With the new subscription plan, Apple says that if publishers are selling a digital subscription outside the app, the same offer must be made to App Store customers at the same price or less.

Apple says that customers purchasing a subscription will be given the option of providing the publisher with their name, e-mail address and zip code when they subscribe. The use of that information will then fall under the publisher's private policy, as opposed to Apple.

Bonnier became one of the first publishers to capitalize on the new plan, offering an annual subscription to Popular Science+ on the iPad with a limited time rate of $14.99 per year for 12 issues. The standard annual iPad subscription rate for Popular Science+ will be $19.99. 

The full Apple release is listed below:

CUPERTINO, California-February 15, 2011-Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc. This is the same innovative digital subscription billing service that Apple recently launched with News Corp.'s "The Daily" app.

Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Then with one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription. Apple processes all payments, keeping the same 30 percent share that it does today for other In-App Purchases.

"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. "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."

Publishers who use Apple's subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app.

However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Protecting customer privacy is a key feature of all App Store transactions. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe. The use of such information will be governed by the publisher's privacy policy rather than Apple's. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher's privacy policy rather than Apple's.

The revolutionary App Store offers more than 350,000 apps to consumers in 90 countries, with more than 60,000 native iPadTM apps. Customers of the more than 160 million iOS devices around the world can choose from an incredible range of apps in 20 categories, including games, business, news, sports, health, reference and travel.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple is reinventing the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

Matt Kinsman By Matt Kinsman
02/15/2011







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