Apple has introduced a subscription service for its App Store and this will offer app makers and publishers a way to reach the more than 100 million iOS users on a recurring basis through the App Store. The move will give Apple a 30% cut of subscription services sold through the App Store and it has the potential to impact popular services like Amazon’s Kindle app and Netflix.
The App Store subscription service will enable publishers and content creators to set the price and length of a subscription and the user will be able to pay for it with one click after signing into their iTunes account. This is beneficial to magazines and newspapers in particular, as something like the Wired iPad app still costs about $5 an issue even though print readers can get a yearly subscription for something like $15.
“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, in a prepared statement. “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.”
Apple has confirmed that this App Store subscription service will impact things like the Amazon Kindle app, which currently kicks users out to a browser to purchase new content. Amazon will still be able to sell content outside of the iTunes ecosystem but it will have to be the same price as the in-app purchase, which makes some wonder if content providers will bump up the price across the board to deal with Apple’s cut.
Services like Netflix, Hulu and others may also be impacted down the road but it looks like these companies may just have to grin and bear it because the iOS platform continues to grow at a rapid rate. Still, this may make Android, BlackBerry and webOS a more compelling alternative for those not wanting to pay the Apple tax.