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Hulu Complies With Apple's New iOS In-App Subscription Rules Without Sharing Revenue

All Things Digital reports that in the latest update to its Hulu Plus application, television streaming company Hulu has brought itself into compliance with Apple's new In-App Subscription rules, taking advantage of a recent shift in Apple's stance to simply remove an external link to sign up for the paid service rather than offering subscriptions inside the application under a system in which Apple would take 30% of the revenue.
All Hulu had to do was strip out the link that sent potential subscribers to its Web site, because Apple's new rule will ban "apps that link to external mechanisms for purchases or subscriptions to be used in the app."
As initially deployed back in mid-February, Apple's In-App Subscription mechanism allowed publishers to set prices, but also required them to offer the same offers inside their applications as found through external mechanisms. Under the program, Apple would retain 30% of the revenue on subscriptions generated within the applications as a fee for bringing the subscriber to the service. The new terms were set to go into effect on June 30th for existing subscription-based applications, leading many to wonder how services such as Hulu and Netflix would deal with the requirements.

External subscription link text (bottom) removed from Hulu Plus login screen

But with Apple reversing course earlier this month, those services now have a much easier path to compliance with Apple In-App Subscriptions terms. Under the revised terms, publishers with subscription programs are not required to also offer In App Subscriptions, provided that they do not link users to external purchasing mechanisms.

Consequently, apps like Hulu Plus can meet the requirements by simply having their subscription links removed from within the app. Hulu loses the benefit of direct link-outs for new subscribers, but does not have to offer In-App Subscriptions that would undoubtedly result in significant amounts of revenue being diverted to Apple. Users interested in subscribing to Hulu will simply have to visit Hulu's site on their own, manually entering the address or finding it through a search engine, in order to sign up.

All Things Digital notes that the solution adopted by Hulu is likely to make its way to a number of other prominent services such as Netflix and Rhapsody, although it is unclear how others such as Amazon's Kindle Store will be able to satisfactorily comply with the new rules going into effect next week without removing a significant convenience factor of being able to purchase individual e-books via link-outs from the app itself.

Top Rated Comments

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37 months ago

I don't know if they can do a non-active link, but they should be able to mention the existence of their website or provide a link to their homepage.


No. If App developers are going to use the Apple infrastructure to sell subscriptions then Apple should get a share of the revenue. I suspect given these very lenient considerations by Apple that the will be pretty strict with people who try to circumvent these rules.

It is ridiculous to think that App developers should just be able to perch on Apple's infrastructure and sell their product to Apple's customers with Apple not being involved. This is why this is.

Companies can bring their own customers to their apps, but they can't just use Apple's platform to recruit new paying customers for free.


I'm no lawyer, but this seems to me to be anti-competitive practices, especially considering it has the ability to stop Netflix & Amazon (both of whom have competing products to Apple) from functioning in a manner that 1) is profitable, and 2) is in any way competitive with Apple's own offerings - in reality, this is edging a little too close towards the IE/Windows debacle for my liking.



You are way off base here. The App Store is a retail store. Retail stores can sell whatever they want, pretty much however they want. This has nothing to do with any sort of anti-trust issue or competitive practices.
Rating: 9 Positives
37 months ago

Clever move. I wonder if Apple will do anything against that, they seems to shift their policies every week..


unlikely, since this was the intended purpose of the rule changes. So apps like Hulu and Netflix could continue to exist in the app store

arn
Rating: 9 Positives
37 months ago
Clever move. I wonder if Apple will do anything against that, they seems to shift their policies every week..
Rating: 6 Positives
37 months ago

No. If App developers are going to use the Apple infrastructure to sell subscriptions then Apple should get a share of the revenue.


Which infrastruture is using Amazon when a Kindle book is sold?
Rating: 6 Positives
37 months ago

Yes but the "anti-competitive" crap being thrown around here doesn't apply.

http://en.wikipedia.org/wiki/Competition_law


"Competition law prohibits agreements or practices that restrict free trading and competition between business"

By making Amazon (rival of iBooks) or Netflix (rival of iTunes) have to shell out an extra 30%, that restricts competition because it is impossible for either of those two companies to compete with Apple on pricing - what most people purchase on.

Presumably also, Safari on iOS is in kind of the same position as IE was on Windows? By far the dominant mobile browser, and almost impossible to compete with because it's there when you install it, and you can't create a competitor that is as good with the tools provided.

In its very nature, a "closed system" is anticompetitive because it means a user either can't access, or makes it almost impossible to access competing services. Hulu Plus might have a drop in traffic now as people don't understand how to get an account because the page their greeted with doesn't allow them to sign up to an account, the consumer will therefore go for the easiest thing to consume their TV: iTunes.

I like the App Store and everything about the experience, but I do think Apple are a bit arrogant and anti-competitive.
Rating: 5 Positives
37 months ago
Seems like it just makes it harder/more confusing for the user.
Rating: 5 Positives
37 months ago

I'm no lawyer, but this seems to me to be anti-competitive practices, especially considering it has the ability to stop Netflix & Amazon (both of whom have competing products to Apple) from functioning in a manner that 1) is profitable, and 2) is in any way competitive with Apple's own offerings - in reality, this is edging a little too close towards the IE/Windows debacle for my liking.


no company is being forced into including their apps in apples stores where millions of people have credit cards and are ready to spend their money on products snd services.
Rating: 5 Positives
37 months ago
This policy just makes me mad. Apple is being greedy.
Rating: 5 Positives
37 months ago

I think removing the links is a good outcome that balances Apple and the third parties' commercial interests without making things particularly difficult on consumers. It puts the ball in the third parties' court to make the user experience easier for the consumer by providing them a way to subscribe through an in-app purchase.

I agree that using the in-app purchase would be better, but 30% is a ridiculous fee, it's obvious it's not going to work for most third parties, some of which already have in place their payment processing infrastructure.

Also to "cripple" a bit these apps might be a double-edged sword. I love my iPhone but I would never have bought it without the Kindle app. If using the Kindle app on the iPhone becomes a nuisance I will surely consider switching to a different device instead of the new iPhone model.
Rating: 5 Positives
37 months ago
Apple, all you have to do is lower the cut and you'll get people on board with in-app purchases. 30% is onerous. 10% is probably manageable for most companies.

And yes, I know no one who can change this will ever read my comment.
Rating: 5 Positives

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