Apple Reverses Course On In-App Subscriptions [Apple Confirms]

091004 app store iconApple has quietly changed its guidelines on the pricing of In-App Subscriptions on the App Store. There are no longer any requirements that a subscription be the "same price or less than it is offered outside the app". There are no longer any guidelines about price at all. Apple also removed the requirement that external subscriptions must be also offered as an in-app purchase.

UPDATE 12:15 PDT: An Apple spokesperson confirmed to Dow Jones Newswire that the company had, in fact, revised its policies regarding In-App Subscriptions.

Content providers may offer In-App subscriptions at whatever price they wish and they are not required to offer an in-app subscription simply because they sell a subscription outside the App Store as well.

This past February, Apple introduced App Store Subscriptions. This opened the door to a wide range of in-app subscription services such as magazines and newspapers. Just last month, Conde Nast rolled out iPad magazine subscriptions for a number of its periodicals.

When Apple rolled out the new subscription plan, however, it placed several requirements on app developers -- via the App Store Review Guidelines -- with regard to pricing of subscriptions. Enforcement of the new policies were to go into effect on June 30 of this year. By far the most controversial was section 11.13:

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions. [Emphasis added]

Apple also emphasized these points in its press release announcing the In-App Subscription service. For publishers who choose 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."

However, this left publishers with the requirement that App Store users be given the lowest possible pricing on all subscriptions. Just this week, the business newspaper the Financial Times dropped its iOS App in favor of a web app to give it more control over subscription pricing. The guidelines were also somewhat vague on whether companies like Netflix, Hulu or Rhapsody were required to implement an in-app purchasing mechanism and meet the pricing guidelines Apple put forth.

With the enforcement deadline looming, this week Apple introduced updated App Store Review Guidelines, of which MacRumors has obtained a copy. The corresponding 11.13 (now 11.14) section is significantly different:

11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app

The new section 11.14 states that apps can play content "subscribed to or purchased outside of the app" as long as the app doesn't include a way for users to go directly from the app to the outside purchasing mechanism. That is, these apps can't have a "buy" button that takes users to an external subscription page.

According to these new guidelines, existing subscription services such as Netflix may continue to function without offering in-app purchases. Content providers are now also free to charge whatever price they wish. For example, they could offer in-app subscriptions with a premium to cover Apple's 30% cut for In-App Subscription payments.

This is a significant reversal from Apple's position in February, and it will have a major impact on the strategy of content providers regarding the App Store.

Thanks to Armin for the tip, and to Heise Online's Mac & i blog

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Top Rated Comments

NightFox Avatar
170 months ago
Glad Apple did the sensible thing now rather than stubbornly keep pushing this until they had done irreparable damage. There's a time to stick to your guns, and a time to realise you've got it wrong; it's the successful companies who get this judgement right. I wonder if the FT move was what finally pushed them to backtrack?
Score: 9 Votes (Like | Disagree)
yetanotherdave Avatar
170 months ago
Thank god they saw sense. So apps like kindle can continue. They just need to remove the link to the kindle store.
Score: 9 Votes (Like | Disagree)
kdarling Avatar
170 months ago
Apple doesn't make money decisions based on "it's the right thing".

From jobs I've been offered, publishers are planning a major move into Android.

Without outside pressure, Apple would keep iOS as tightly controlled as possible.
Score: 7 Votes (Like | Disagree)
samcraig Avatar
170 months ago
On the other hand, anyone who buys something in-app once and later finds out that you charged them 43% more will feel totally ripped off and is not likely to buy anything through your app ever again.\

I didn't see anything that prevents the app developer from WARNING the customer that buying the app externally SAVES them XX vs buying in-app. In fact - if anything it could increase sales as people like the perceived notion they are getting a deal.

Apple doesn't make money decisions based on "it's the right thing".

From jobs I've been offered, publishers are planning a major move into Android.

Without outside pressure, Apple would keep iOS as tightly controlled as possible.

Exactly kdarling - and this is why you are one of the most level headed and respected (by at LEAST me) poster on these forums.
Score: 5 Votes (Like | Disagree)
macsmurf Avatar
170 months ago
We're seeing again and again that Android is keeping Apple honest, so to speak.

Remember Vic Gundotra's "draconian future" remark at Google I/O? Although overly dramatic, situations like this is what he was talking about.

Apple is a great number 2 and a pretty horrible number 1.
Score: 4 Votes (Like | Disagree)
OllyW Avatar
170 months ago
On the other hand, anyone who buys something in-app once and later finds out that you charged them 43% more will feel totally ripped off and is not likely to buy anything through your app ever again. More likely to give your app a minus five star rating (or the lowest rating possible) on the store before uninstalling it.

Easy to solve, tell them before they buy it.

As you click to subscribe they should be able to inform you that the in-app purchase includes a surcharge to cover Apple's charges and let you know it is available at the normal price elsewhere.
Score: 4 Votes (Like | Disagree)