Apple Debuts App Store Subscriptions

Apple today announced the debut of subscriptions for the App Store, opening the door for developers offering a wide range of content, including magazines, newspapers, music, and video, to use the same recurring billing mechanism introduced earlier this month with The Daily.

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 Purchases.

Answering questions about whether content may also be offered outside of the in-app purchasing mechanism, Apple CEO notes that publishers are free to offer content outside of the application but that the same or better offer must also be available within the application.

"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."

Apple of course expects that many customers will want to utilize the in-app mechanism for ease of activation and simple direct billing to their iTunes Store accounts. Content providers will of course prefer that customers use external subscriptions so as to not have to send 30% of their revenue to Apple.

The announcement offers no word on the release of iOS 4.3, which developers have indicated contains the API hooks required for in-app subscriptions.

Update: According to All Things Digital, publishers of existing App Store apps have until June 30th to comply with the new requirements regarding the offering of in-app subscription options.

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