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Thursday, 09 June 2011 17:00

In Apparent Boon To Publishers, Apple Relents On App Sub Price Restriction

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In Apparent Boon To Publishers, Apple Relents On App Sub Price Restriction

Apple has dropped a rule which had required publishers to charge no more for content via the iTunes store than it did elsewhere, a significant reversal of the subscription plan that was tepidly received when it was rolled out only last February and was not even scheduled to be enforced until the end of this month.

The change, first noticed by Jordan Golson at MacRumors, means that publishers of music, newspapers, magazines and the like can maintain a presence in  iTunes — benefiting from its significant foot traffic, but kicking back 30% to Apple — but can now also offer any sort of inducement, price or benefit outside the Apple store without being banished from the marketplace which funnels apps to tens of millions of owners of iPhones, iPads and iPods. Publishers may now even think of charging more in the iTunes store as a way of recouping their kickback to Apple, and indirectly encourage their potential customers to look for better deals they market aggressively elsewhere.

The move was a quick reversal in a digital media environment that is as stable as quicksand. Apple announced the subscription model, with controversial section 11.13, with some fanfare on Feb 15. “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.”

Now the playing field seems completely level, with publishers able to make marketing decisions based entirely on the value proposition of being in one store versus another.

As reported by MacRumors:

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 only restriction that remains forbids publishers from pushing sales from the app to an external site, as with a “buy” button that opens a page in Safari. But that’s a small point, relatively speaking, since publishers of all kinds peddle their wares in various places and ways anyway and don’t necessarily need iTunes as a portal. But this does free them to price and market without considering the impact it would have on their ability to sell via iTunes by no longer being bound to consider the implications of the parity Apple had required.

A day after Apple’s original subscription announcement Google went them one better, with “One Pass.” That approach promised to let publishers set up an easy subscription and paywall system so that a user who buys a subscription using their desktop browser could access the same content on a mobile phone browser or in the publication’s apps. And they would take much less: something in the 10% range.

And it may be only coincidence, but the Financial Times, which has always had an online paywall, a strict subscription model and was a pioneer in iOS apps, only this week introduced a web version of its newspaper using the new HTML5 standard — bypassing the Apple store, and its 30% cut. The FT is offering the full site free for a week. In my early, rudimentary tests, it seems to adopt the best aspects of an app, in terms of design and the live/download balance which makes it run very quickly without the latency that even an optimized non-HTML5 web site is prone to.

Since Apple announced the new subscription model and number of publishers have begun full-bore sales via iTunes. News Corp’s The Daily was among the first to sign on for the subscription model. Time announced that it would go with Apple in May, as did Hearst. Condé Nast, which owns wired.com, was the first of the major magazine publishers to actually do so, also in May.

But the floodgates did not exactly open, and media executive said privately that Apple subscriptions, while better that nothing, seemed only like an opening gambit in the early stages of a game which was only now seeing Google’s Android eco-system start to mature. It would appear those nay-sayers were correct.

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