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Apple is walking back its controversial policy regarding subscriptions sold via the App Store. But how will publishers actually react?
Under Apple’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 fees. Under the revised terms, publishers can offer in-app subscriptions at any price they desire, and aren’t required to offer an in-app subscription simply because they offer one outside of Apple’s ecosystem.
Publishers hadn’t exactly made their peace with Apple’s initial policy. “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,” music-subscription service Rhapsody wrote in an emailed statement to eWEEK in February, soon after the policy announcement. That irritation was echoed publicly by other companies.
Though Apple’s revised the policy, publishers could be taking another look at how they distribute their content to audiences. A recent report by Forrester analyst Nick Thomas, for example, cites the Financial Times’ decision to launch an HTML5 web application in order to deliver content to multiple devices, all while maintaining a lock on the customer relationship.
“Faced with the challenge of delivering multiple versions of the same content and with what they see as the punitive terms and conditions of some platform providers,” Thomas wrote in the report’s executive summary, “other publishers are keen to see if the FT model offers a way forward.”
Despite that publisher interest, he added, “HTML5 is not yet appropriate for mainstream adoption. But the FT’s initiative is an important salvo in the battle over the future of paid apps.”
Even with its revised policy, Apple could still cause turbulence among publishers.
“While publishers figure out their next steps for their content apps, there’s one app that no one is talking about but I believe everyone should have their eye on. It’s the Amazon Kindle app,” James McQuivey, an analyst with Forrester, wrote in a June 13 blog posting. “This app violates even Apple’s revised policies and will soon face a day of reckoning when Apple’s June 30th deadline for compliance comes up.”
In order to sidestep any issues, Amazon should consider releasing a Kindle app that hews to Apple’s new policy, only without a built-in “Buy” button: “Instead, it should be positioned as a Kindle reading app where people who have purchased Kindle books elsewhere can read them on an iOS device.” Furthermore, Apple “should just let these readers know” that the changes are the result of Apple’s rules.
On top of that, he added, Amazon should “release an amazing HTML5 -app’ that gives Kindle readers everything Amazon has to offer,” which could open doors to “include Netflix-style video streaming, paid VOD , and its cloud music service.” The ultimate result would be a platform capable of rivaling iTunes for breadth of product.
Other Apple rivals have tried to exploit the potential schism between the company and publishers. In February, soon after Apple announced its original publishing policy, 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.
In other words, despite the popularity of the App Store as a content platform, publishers will likely continue to feel out their options.