Tuesday, February 15, 2011

Apple Launches Subscriptions on the App Store, Improvements better come Fast to the App Sore Interface

Apple® today, February 15, 2011, announced a new subscription service
available to all publishers of content-based apps on the App Store℠,
including magazines, newspapers, video, music, etc. This is the same
digital subscription billing service that Apple recently launched with
News Corp.'s "The Daily" app Many are writing how this is not good
for subscriber. I disagree.

Apple explains the subscription plan this way, "Subscriptions
purchased from within the App Store will be sold using the same App
Store billing system that has been used to buy billions of apps and
In-App Purchases. Publishers set the price and length of subscription
(weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Then
with one-click, customers pick the length of subscription and are
automatically charged based on their chosen length of commitment
(weekly, monthly, etc.). Customers can review and manage all of their
subscriptions from their personal account page, including canceling
the automatic renewal of a subscription. Apple processes all payments,
keeping the same 30 percent share that it does today for other In-App

Unless something already changed today within the Apple app store,
Apple is going to have drastically improve their system for tracking
purchases in the on-device iTunes store. In the past, and even today
(unless a new app store tracking system was launched today) the above
claim by Apple will have many challenges and changes in order for this
new system to be effective. Today when you buy apps, it is very
difficult to determine what apps you have previously purchased. In
fact, you can only see purchase history only from the desktop version
of iTunes. If you do not own a desktop computer, you can not see
which apps where purchased at all. This not acceptable. It can lead
to unwanted purchases. Even the list available on the desktop is
poorly organized and you have to look through many separate files
based on purchase date to find a prior purchased item. Horrible.

When looking an app in the iTunes App store, you can only see that are
installed. If you own an app, there is no way of knowing this when
looking at the app in the list in the store. It is only after
clicking on the buy button that Apple will indicate that the app has
been previously purchased. This is backwards and can easily result in
apps being purchased by accident. For example, if you download Angry
Birds lite (which is free) and then have to restore your device. When
you go to the App store to re-download the app, if you mistakenly
click the buy button on the paid app instead of the free app, then you
pay for something that you thought was free. Many apps have similar
names, plus there apps that you may own from prior device like iPhone
or iPod Touch that require that you buy the iPad version separately.
You could buy the new app, thinking it is the version you already own.
Apple should make it easier to determine what you own and make it
possible from the device. Apple's for getting refunds for these
unwanted purchases needs even more work. Having Apple in the middle
will lead to issues for both the buyer and the service provider for
the near future.

"Our philosophy is simple—when Apple brings a new subscriber to the
app, Apple earns a 30 percent share; when the publisher brings an
existing or new subscriber to the app, the publisher keeps 100 percent
and Apple earns nothing," said Steve Jobs, Apple's CEO. "All we
require is that, if a publisher is making a subscription offer outside
of the app, the same (or better) offer be made inside the app, so that
customers can easily subscribe with one-click right in the app. We
believe that this innovative subscription service will provide
publishers with a brand new opportunity to expand digital access to
their content onto the iPad, iPod touch and iPhone, delighting both
new and existing subscribers."

I have seen the battle for years in the mobile world. When sites like
Palmgear.com charged the same 30%for sales of Palm OS apps, they were
digitally lynched on the fan and developer sites. I don't have a
problem with this arrangement. If you can sell your app or service
outside the app store, then you will keep everything as usual. If the
sale is a result of them finding it in the app store then Apple closes
the deal and gets their cut. If someone tells you to sign up for
Netflix and you go to Netflix.com site, then Netflix closes the deal.
If they go to the app store on their device to sign up, then Apple
closes the deal and Apple makes 30% of the sale.

Apple continues, "Publishers who use Apple's subscription service in
their app can also leverage other methods for acquiring digital
subscribers outside of the app. For example, publishers can sell
digital subscriptions on their web sites, or can choose to provide
free access to existing subscribers. Since Apple is not involved in
these transactions, there is no revenue sharing or exchange of
customer information with Apple. Publishers must provide their own
authentication process inside the app for subscribers that have signed
up outside of the app. However, Apple does require that if a publisher
chooses to sell a digital subscription separately outside of the app,
that same subscription offer must be made available, at the same price
or less, to customers who wish to subscribe from within the app. In
addition, publishers may no longer provide links in their apps (to a
web site, for example) which allow the customer to purchase content or
subscriptions outside of the app."

The plain truth is 70% of something is way better than 100% of
nothing. What the content provider must realize is that they will have
much more exposure to their app than they could ever imagine. Every
single person with an iOS device has the opportunity to buy the app,
or in this case, the service. Without the app store, most of these
people mostly likely would never know you or your service existed. If
the same device owners never discover your app in the app store or
choose not to buy it, then you make 100% of nothing and so does Apple
That is the reality. If companies have other ways of promoting their
wares, they are free to do so and keep 100% of the profit for
successfully doing so.

If the content provider controls the sale outside of the app store,
then they control the customer data. If Apple handles the sales, then
they are faced with holding and protecting the data. Apple states it
this way, "Protecting customer privacy is a key feature of all App
Store transactions. Customers purchasing a subscription through the
App Store will be given the option of providing the publisher with
their name, email address and zip code when they subscribe. The use of
such information will be governed by the publisher's privacy policy
rather than Apple's. Publishers may seek additional information from
App Store customers provided those customers are given a clear choice,
and are informed that any additional information will be handled under
the publisher's privacy policy rather than Apple's."

Customers will rather have one point of contact for protecting their
data versus having hundreds of people with their credit card
information. Having the ability to enjoy a service from known and
unknown services providers without increasing risk of misuse will be
appreciated by customers. This is not a new problem for developers
that have been in the game for a long time, it is just new players.
Ask any developer, that complained about the Palmgear deal of the
past, if they would have the old system or the new system and many
will say that they would take the Apple system any day. Apple will
have to spend some of that money they have in reserve to fix the
deficiencies in they system so that customer and content providers can
better track their purchases and customers.


Carl W. Brooks
iAmThereforeiPad, Founder and Chief Editor

iPad News, Reviews and How-To-Dos.
We help make your iPad experience Magical through information!

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