Apple launches digital billing subscription service

Apple has launched its digital billing subscription service for all content app producers.

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The model, launched by News Corp for its iPad-only title The Daily last week, will let publishers set the price and length of the subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly), while users can choose how frequently they’re charged and for how long they commit to a subscription.

Customers can review and manage all their subscriptions from their personal account page, including cancelling automatic renewals.

Subscriptions purchased from within the Apple App Store will be sold using the same billing system, with Apple retaining its 30% cut for processing payments.

It has also confirmed that publishers will be allowed to sell app subscriptions through their own websites, bypassing Apple’s 30% stake, but will have to offer subscriptions through Apple from within the app for the same price or less.

Apple CEO Steve Jobs said in a statement, “When we bring a new subscriber to the app, it earns us a 30% share. When the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and we earn nothing.

“If a publisher is making a subscription offer outside the app, the same (or better) offer must be made inside the app so that customers can easily subscribe with one click right in the app,” he added. “We believe 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.”

To the frustration of many publishers, most apps to date have come under the constraints of Apple – a 30% cut of sales and no opportunity to collect subscription information – and it’s this that has stymied any real advancement of apps as a viable revenue stream.

The Daily will be the first to collect subscription data through in-app capabilities, while a push subscription feature will automatically renew subscriptions.

Taking the onus off the user to keep updating will go some way to addressing the issue of download drop-off, industry experts believe.

This story first appeared on newmediaage.co.uk

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