Apple has adjusted its controversial in-app subscription policies, dropping requirements that had sparked controversy among publishers. How will the latter respond?
Apple has walked back its somewhat-controversial policy
regarding subscriptions sold via the App Store.
Under the company's previous terms, media publishers were
required to sell subscriptions through the App Store at rates preferable or
equal to those offered via other channels, with Apple taking 30 percent of the
Spokespeople for Apple reportedly confirmed the reversal to
various media outlets, including
"Content providers may offer In-App subscriptions at
whatever price they wish," read a June 9 posting on the Apple-centric blog MacRumors
, which is widely credited with
first noticing the change to Apple's guidelines, "and they are not required to
offer an in-app subscription simply because they sell a subscription outside
the App Store as well."
Publishers hadn't exactly greeted Apple's original policy
with glee, accusing the company of greediness in its dealings with publishers.
"An Apple-imposed arrangement that requires us to pay 30 percent of our revenue
to Apple, in addition to content fees that we pay to the music labels,
publishers and artists, is economically untenable," Music-subscription service
Rhapsody wrote in an emailed statement to eWEEK in February, soon after Apple
announced its plans. "The bottom line is: We would not be able to offer our
service through the iTunes store if subjected to Apple's 30 percent monthly fee
vs. a typical 2.5 percent credit card fee."
At the time, analysts also questioned whether the
marketplace would tolerate Apple's terms.
"At the end of the day, the market and customers will decide
this," Gartner analyst Michael Gartenberg told eWEEK. "If services begin
pulling out of the iTunes marketplace, customers will be frustrated, and Apple
That being said, he thought Apple had some flexibility in
the matter: "From Apple's perspective, they can always move rates down, not
raise them. Apple wants to make sure their customers are paying what they'd be
Other analysts took a much more dire view.
"What Apple has done already is sufficient to make providers
of content aggressively invest in alternative means to reach the market," James
McQuivey, an analyst with Forrester, wrote in a Feb. 16 blog posting. "You can
fault the company for choosing not to anticipate that seeking a 30 percent toll
would bring any subscription model of any type to its knees."
Apple's rivals immediately rushed in to exploit the
potential schism between Apple and publishers. On Feb. 16, Google announced
Google One Pass, a service that the search engine described as letting
"publishers set their own prices and terms for their digital content," with
Google taking 10 percent of any revenue.
Now Apple's chosen to modify its policy, with some caveats.
"Apps can read or play approved content (specifically magazines, newspapers,
books, audio, music and video) that is subscribed to or purchased outside the
app," reads the updated guidelines, "as long as there is no button or external
link in the app to purchase the approved content." In-app purchasing will
apparently continue to earn Apple its 30 percent, according to MacRumors
, which could still rub some
publishers the wrong way.
Nonetheless, the change is likely to adjust publishers'
dealings with Apple yet again.