Thursday, June 9, 2011

Apple loosens rules for in-app subscriptions

Here is a mea culpa: I just signed the damn developer agreement without reading it. Because of this I missed an important change that was spotted by several websites that watch such things. Sorry about that.

The big change involves in-app purchased subscriptions. The new section, 11.14 now reads as follows:

11.4 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app
There are two big changes here:

First, subscriptions sold outside the App Store are now approved. A media app using this subscriptions sold outside the app will be considered a "reader" app, like the Kindle App. The good news is that if a publisher wants to avoid the 30 percent fee Apple charges it can do so.

This is an obvious nod to services like Netflix, which I would think Apple considers vital to the success of its hardware sales. This also avoids any conflict with Amazon, another important "partner", even they are also competitors.

But publishers need to remember that they can't have it both ways, either a publisher uses the in-app subscription process for convenience and pays the associated fees, or the opt out and have to do this themselves. This seems very fair to me.

The second big change is the absence of language that talks about price regulation: where once Apple stipulated that no subscription offered on the iPad could be discounted further outside the app, this language has simply been eliminated.

I think Apple's lawyers probably told the App Store team that this was simply not an enforceable rule and that if challenged they would lose.

Apple still forbids a developer from including a "Buy" button in their app that takes them outside the app. Instead, a developer would have to do something more like the Kindle app does, including a "Shop" button, or better still, a "Learn More" button that would take the reader to the publisher's website.

Joshua Benton on Nieman Journalism Lab today wondered if publishers were kind of beside the point here, that the changes were really meant to effect Amazon, Netflix etc. Kind of a "duh", really. Of course, newspapers and magazines are beside the point.

Apple tends to respond to the demands of media professionals, but in its own way, and often only after a bit of damage has been done. In the end, the amount of money Apple hopes to make on in-app subscription purchases is still a small amount compared to their overall business. Media folk, on the other hand, have been way overestimating their own power. It is important to keep in mind that the total sales generated by Apple current exceeds the total ad sales of the newspaper industry as a whole – by 100 percent. So if the media executives out there really think they can muscle Apple they better think again. On the other hand, Apple knows they need content partners, whether they are Netflix, Amazon or newspapers and magazines.

Oh, and by the way, the Apple developer guidelines still says "We don't need any more Fart apps."

1 Comment:

Anonymous said...

Comon, be real.
Do you really think Apple with the power of their legal team would have not gone through the research before making this very strong position in Feb?
Of course Apple knew exactly what they were doing, and of course they gave it until End of June to start enforcement and of course they revised it before the deadline. This is a good news for publishers but why would people think this was something they caved in on? What apple did was a strategic move to use stick and carrot to move this industry down a path they wanted us to move to.
Ever try to build an application that is not a game or free download for Android, especially something in this industry? It is a painful process.
Perhaps Steve Jobs strategy was to get people to see what other options were out there and then realize that grass was not greener next door.

Regarding section wording of the Buy button, it is not the word but intention. The symbol "$" can mean anything, but I would bet that if you put a button there with a symbol "$" or an icon of a shopping cart, or a store, it would be seen as same.

Whatever the reason and intentions, I am happy with this news as a developer and a publisher.