Apple Launches App Store Subscriptions For Digital Content

Apple announced Tuesday a new App Store subscription model for digital content including magazines, newspapers, video, and music. It's the same model Apple previewed two weeks ago at the launch of News Corp's tablet newspaper The Daily.

The move could prompt magazine publishers to move more aggressively toward offering their products through Apple's App Store, assuming they are happy with the revenue breakdown, which is not a foregone conclusion. Representatives for giant publishers Time Inc. and Hearst did not immediately return a request for comment. Nor did Condé Nast, which owns Wired.com.

According to the revenue split terms, if Apple brings in a new subscriber, the company keep 30 percent of the revenue. If the publisher brings in a new or existing subscriber, the publisher keep 100 percent of the revenue and Apple gets nothing.

“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," Apple CEO Steve Jobs said in a statement. "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.”

Publishers can set the price and frequency of subscription (eg. weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly).

Full Apple memo after the jump:

Apple Launches Subscriptions on the App Store

CUPERTINO, California—February 15, 2011—Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc. This is the same innovative digital subscription billing service that Apple recently launched with News Corp.’s “The Daily” app.

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.

“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.”

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses 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. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Protecting customer privacy is a key feature of all App Store transactions. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe. The use of such information will be governed by the publisher’s privacy policy rather than Apple’s. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher’s privacy policy rather than Apple’s.

The revolutionary App Store offers more than 350,000 apps to consumers in 90 countries, with more than 60,000 native iPad™ apps. Customers of the more than 160 million iOS devices around the world can choose from an incredible range of apps in 20 categories, including games, business, news, sports, health, reference and travel.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple is reinventing the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

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See Also:

• Murdoch's News Corp. Launches The Daily for Apple's iPad ...
• The Daily: The Newspaper as a Magazine
• What's New About The Daily? The Oldest Media Idea There Is ...
• 'The Daily' — EXPOSED! (Well, Sort Of)
• Millions Would Pay for Cloud-Based iTunes Subscription: Study ...
• New iTunes Rules Complicate iPad Magazine Opportunities ...
• Apple Rejects Sony Reader App Over In-App Purchases. Kindle Next ...