Plannin' On It

actionatadistancermg:

Apple finally launched the long-rumoured iOS subscription pricing for content producers. The important bits are:

• “Apple today announced a new subscription service available to all publishers of content-based apps on the App Store, including magazines, newspapers, video, music, etc.”
• “Apple…

Read this if you’re at all interested in this whole Apple subscriptions thing. Richard does a great job of explaining the situation and what it means for users. He’s covered a lot of the stuff that’s been bouncing around in my head since Tuesday.

One thing I’ll add is I expect Apple to change their policy in some way within the next six months, probably before iOS 5 is released. They have a problem, which is that if they leave it open where any app can provide its own payment processing, they risk a growing number of developers bypassing them completely. The way things have been, there was nothing stopping, say, Rovio from giving away Angry Birds with just one level, then selling “subscriptions” for the rest of the levels from their websites. That’s an unlikely example, but if enough developers take that route there is a risk that the App Store will go from a profitable business to a break-even or losing one.

That same problem exists if they offer a cheaper rate (say, around 3%, more like a payment processor) for subscriptions and other digital content. Developers will switch to those types of in-app purchases to avoid the 30% rate. Apple needs a way to differentiate between different types of in-app purchases, so that the App Store remains profitable for them and developers.

It’s a tough problem, and I think they simply haven’t solved it yet. So for now, everybody’s getting charged 30%. It’s far easier to charge everybody now and drop the rate later than to not charge folks now, then up the price in the future. But I think they have to figure this out before the next major iOS release if they want to keep developers from jumping ship.