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Apple Announces Major App Store Changes Including New Subscription Terms and Search Ads
Apple is opening up app subscriptions to all product categories, giving developers more options for selling their apps and additional ways to earn revenue. An app like Workflow or Fantastical, for example, could be sold on a subscription basis, with customers able to obtain it for a $5/year subscription fee.
With that change, developers will be able to charge $5 per year rather than just a flat $5 fee, for an ongoing revenue stream, and they'll also be able to offer a subscription that encompasses multiple apps. Apple also plans to introduce up to 200 new tiered pricing options across different currencies and territories for app subscriptions.
Subscription fee changes are also being implemented. Currently, Apple takes a 30 percent cut of subscription fees on the App Store, but now, if a customer stays subscribed to a service for multiple years, Apple will only take a 15 percent cut, leaving 85 percent of profits for developers. That works on a per customer basis, so for customers who subscribe to Netflix through Apple, Netflix will pay Apple 30 percent during the first year and 15 percent the second year.
Apple is adding ads to App Store search results, something that was hinted at earlier this year. Ads will be displayed when a search is conducted and developers will have opportunities to purchase those ads for better app exposure. There will be one ad on the search results page, which Apple will clearly denote as an ad. Ad content will be the same content available on the App Store, and ads will only be accepted from developers. Apple plans to distribute ads through an auction system.
"We've thought about how to carefully do it in a way that, first and foremost, customers will be happy with," Schiller says, adding that he believes the ad auction system in App Store search will be "fair to developers, and fair for indie developers, too."Recently, the Apple TV Top Charts stopped displaying apps that a user has installed, and that's a change that's rolling out more widely. The "Featured" section in the App Store will change dynamically for each user, no longer displaying apps that are already installed and Apple plans to bring the Categories tab back to the App Store.
A Share sheet will be added as a new 3D Touch Quick Action for all apps, allowing app recommendations to be more easily shared without needing to access the App Store directly. Search is also seeing some significant improvements to make it easier to find exactly what you're looking for and it is one of the areas Apple is focusing on.
Schiller took over the App Store from Eddy Cue late last year, amid developer complaints about discoverability, the review process, poor communication, search results, and myriad other complaints. Schiller promised improvements and has been delivering on that promise. In an interview with The Verge, Schiller said there's a "renewed focus and energy" around the App Store.
Under Schiller's leadership, the App Store has been steadily improving across 2016, not even counting today's changes. The app review process takes as little as two days, featured app sections like Best New Apps are updated on a more regular basis, and Schiller has a secret team working on exploring changes that could be made to the App Store to introduce further improvement.
Apple plans to begin rolling out these changes over the next couple of months. Ads will be made available as part of a beta program next Monday. Subscriptions will be accessible to developers starting in the fall, while existing subscription apps will see changes to the revenue split on June 13.