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Breaking: Apple Reverses Pricing Requirements for In-App Subscriptions

Breaking: Apple Reverses Pricing Requirements for In-App Subscriptions

Newsstand app for iPad in iOS 5

In a reversal of its policies for in-app subscriptions, Apple has decided to let the free market decide by lifting pricing restrictions for subscription content, according to a report.

Under the previous guidelines, Apple required that if publishers “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.”

The updated section 11.13, now named section 11.14, of the updated App Store Review Guidelines (bold added for emphasis):

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.

This will certainly make the publishing industry happy. Previously, they would have been forced to offer the lowest possible price only in the App Store. Now, they are free to charge whatever they want. Even if it means charging a premium within the app to cover Apple’s 30% commission. It seems Apple tried to push the business as hard as it could to drive down prices and has now pulled back. Perhaps this was due to a backlash or lack of interest by publishers to conform to the previous iteration of in-app subscriptions. In fact, the Financial Times just launched a web-based iPad app in direct objection to Apple’s former pricing policy.

This is a mixed bag for consumers. It is possible subscription prices could rise as a result of Apple’s loosened requirements. Publishers must now consider the premium Apple receives on content purchased within the app. On the other hand, it is likely more publishers will embrace the new policy, creating a larger market for subscription content on iOS. I expect to see the empty Newsstand app (above) to quickly fill up with more options. This aspect makes the new policy a win for consumers since more choice is always better. Finally, it should hopefully eliminate the insane practice of requiring iOS subscribers to receive dead-tree versions.

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