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Impact - A Blog by INM

Apple Backtracks on Subscription Model Requirements

June 20, 2011 by Jason MacDonald
iPads with digital magazine covers

The other week, Apple announced that with the upcoming changes to iOS that it would also reverse some of its stringent requirements for in-app subscription handling.   Specifically, Apple removed the requirement that all subscriptions available through Apple be the same price or less expensive than ones offered outside the application. It also now allows publishers to once again offer external subscriptions, even if they don’t offer them in-app as well.

This doesn’t come as much of a surprise to me, as I never really understood Apple’s reasoning for forcing subscription model changes. Asking publishers to change a successful multi-channel subscription model just wasn’t realistic, even for Apple. This to me is parallel to Apple’s initial requirement that all iPhone applications had to be natively built using Objective C. The company soon realized that while this approach would protect the application quality and user experience, that the trade-offs were too high in terms of limited developer adoption. They simply needed to open up additional options for building iPhone applications to ensure that there were compelling titles available to sell the hardware. 

Apple’s subscription changes come hot on the heels of the Financial Time’sannouncement that it was abandoning its native iOS application in favor of offering a paid web application (in turn circumventing the 30% Apple fee). In addition to the Financial Times, many smaller publications were looking for other ways to package and deliver their content without surrendering one-third of their revenue.

Now, Apple is giving publishers the choice. For some publishers, the Apple subscription model, even with its 30% fee, does make perfect sense. It provides a ready-made subscription handling process and it offers significant opportunities for promotion through iTunes and the upcoming Apple Newsstand. But for publishers with an existing, successful multichannel strategy, there is now a choice to make.