Apple’s new in-app pricing

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Apple have now clarified their policy on in-app subscription purchases. There will be no free ride for publishers. If you have an app and want subscribers, you have to offer an option through the app itself and if you offer an alternative path outside, it can’t be cheaper. Some have argued that this means that when consumers purchase subscriptions in-app, the publishers lose 30% of the profits to Apple which does not happen if they go outside. Of course, it should be pointed out that publishers save on bandwidth (I think) and payment processing costs if they go through Apple but it does not look like a great deal for them.

Actually, that is at first glance. I haven’t had nearly enough time to think about this but what is likely is that in-app purchases are far easier for consumers and so by offering these, publishers may make up in greater demand what they lose in margins. This is precisely what is happening in the Mac App Store at the moment. Publishers can always opt not to participate or they can offer content in another way and then give the app-content as a free give-a-way. This is something open to publishers with print subscriptions. And they can also use the Apple path for issue by issue purchases. Indeed, one wonders what might stop them from offering refunds in that case.

This is an interesting development. I can see why Apple is doing it. They are creating all this potential revenue — some argue, saving the news industry — but they can’t build that into the iPad payment. So they want a cut. But what strikes me is that this type of attempted control seems so open to gaming (using funny contracts to get around the rules) and to fights (someone will jump off the iPad and fight with Apple). But then again it would be naive surely for us to think that, given Apple’s close ties with at least some media organisations, this development was independent of any consultation.

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