Tuesday, February 15, 2011

Apple announces new subscription policy for the App Store; publishers keep all revenue from existing readers

This morning Apple announced its long-awaited revisions to its subscription policies inside the iTunes App Store. The new policy will allow publishers who create new apps to be able to keep 100 percent of the revenue generated from existing readers when they bring those readers into the system.

Apple will continue to receive its 30 percent cut on all payments processed within the app store, but now customers will be able to review and manage all of their digital subscriptions from within the personal account feature.
“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,” Apple CEO Steve Jobs said in the company release.

“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.”

(Allow some are reading this to mean that booksellers would required to sell through the App Store, I don't read it this way -- there appears to be a bit of wiggle room here as the word "subscriptions" is consistently used.)

Another change implemented will allow publishers to get customer data through an opt-in process:

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.