Apple does away with oppressive subscription content rule

Jun 14, 2011
Finance

When Apple (AAPL) rolled out its subscription policies for apps that sell content through in-app purchases, there was some (pretty understandable) backlash among developers. Apple demanded not only a 30 percent cut of everything sold through its apps – which was reasonable, if not a little steep – but forbade content sellers from undercutting in-app […]

When Apple (AAPL) rolled out its subscription policies for apps that sell content through in-app purchases, there was some (pretty understandable) backlash among developers. Apple demanded not only a 30 percent cut of everything sold through its apps – which was reasonable, if not a little steep – but forbade content sellers from undercutting in-app purchases by offering the same content cheaper anywhere else.

This was a big thorn in the side of some developers, and it actually caused several of them to leave the iTunes App Store entirely. Apple was basically dictating how its developers could do business if they wanted to offer content through their iPhone and iPad apps. You could sell your e-books or music in a web store, for example, as an alternative to giving Apple its cut, but you couldn’t lower those prices without lowering the price of the in-app purchase to make it the most convenient and attractive option to app users.

This also had far-reaching implications for all content providers. Apple was closing-off newspapers from offering subscriptions at a lower rate outside the App Store; subscription music providers had to make sure their App Store prices were the lowest, even if they offered their apps in other venues; and many content providers at the time said they felt the need to increase their prices to offset Apple’s cut, since there wasn’t much of a way to avoid paying it if they wanted to be able to play in the iOS pool.

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But according to a story from MacRumors, Apple has discontinued the lowest-price rule, striking it from its developer policy guidelines. Apple now says that instead of forcing content providers from offering any content in web-based stores for the same or more than that content would draw from in-app purchases, developers just can’t link to outside web stores rather than offer in-app purchases.

This is a pretty big reversal from Apple’s stance back in February. Before, if an app was going to read subscription-based content of any kind, Apple had to have the opportunity to receive a cut and apps couldn’t offer those outside subscriptions without also offering them through an in-app purchase. Now, apps are free to offer subscription content purchased outside of the App Store – Apple just doesn’t want apps linking to those outside stores. If you’re going to sell with your app on Apple’s platform, you need to sell through Apple; if not, feel free to sell what you like, where you like.

Apple has confirmed the change to its guidelines, although it quietly made the change without announcing it to the public. The former subscription guidelines had an enforcement deadline of June 30, giving developers a few months to get their houses in order to comply with Apple. It seems that with that deadline fast approaching, Apple wasn’t willing to battle it out with developers over the rules, perhaps because it would require banning a large number of subscription-based apps, a sacrifice Apple wasn’t willing to make.

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Regardless, the new policy should make things a heck of a lot easier on app developers who wanted to offer subscriptions but previously found themselves hamstrung. The change could actually result in more diverse in-app content purchases being made available, as developers now have the freedom to offer different incentives to increase their viewership or entice them to pay for more services, without Apple forcing their hands.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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