Apple's Subscription Model Ruffles Publishers' Feathers
In a widely expected move, Apple is rolling out a subscription service for content-based apps such as magazines, videos, music and newspapers. The service is already present in News Corp’s The Daily, a publication tailored specially for the iPad.
Publishers will have the ability to set a subscription’s price and duration, while customers can select the length of their subscription. Beyond that, Apple has set a few more rules for the new service.
"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 wrote in a Feb. 15 statement. "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."
Apple’s subscription service appears at a transitional moment for digital periodicals. On Feb. 2, Apple and News Corp launched The Daily, a tablet-only newspaper, in New York City. Priced at 99 cents per week (and $39.99 per year), the publication offers built-in games, weather updates, a customizable sports dashboard, interactive video and photos, and stories read aloud. Whether or not The Daily succeeds, its model—combining text with interactive content, formatted to a 7-inch or 10-inch screen—will be one almost certainly followed by rivals in the near- and long-term.
From that perspective, the integration of an app subscription service seems a logical move. But Apple’s newfound insistence on in-app purchasing has the potential to complicate life for app creators, as the company’s relationship with e-book publishers has already demonstrated.
Earlier in February, Apple started ratcheting up its policy enforcement for e-book apps, stating that app-makers such as Sony and Amazon needed to offer in-app purchasing through Apple’s online storefront if they wanted to make e-books purchased on other devices available through the iPhone, iPad and other Apple products.
For more, read the eWeek article: Apple's App Subscription Model Could Lead to Publisher Grumbling.