On Feb 15th, Apple announced its new in-app subscription policy that many content creators are vary off. Apple is maintaining a tight control over in-app subscription offered by digital publication companies. Apple is making some changes in the way subscribers pay for digital content that is purchased from within an app, and not far behind is Google, which came out with its own in-app purchasing model called the Google One Pass. Both these models have some similarities and some pretty critical differences, lets have a closer look at both of these.
Apple’s new policy
Steve jobs announced that Apple would soon be implementing its new policy, according to which any digital content provider that proposes to sell content outside the app, is also required to provide the same content to iPad, iPhone and iPod devices at the same price or lower price. Along with this it also announced that in-app purchases would be device specific and would not be available for use outside the app.
Here is a short excerpt from Apple CEO Steve Jobs’ speech during the announcement.
“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, 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.”
All this corporate talk is just a lot of hoo-haa!! I’ll explain it with an example,
For developers and content providers:
Say I’m a digital content provider that provides an online magazine and newspapers and such. I can sell my digital content directly in the app, provided it is at a same or lower cost than the same content provided outside the app, like the website. Not only that, it is obligatory to provide all the available saleable content in the app. To further add to woes, it prohibits app developers to post links to their websites in the app that would let the users navigate to the page and subscribe through there.
And as per Apple’s policy, it will keep 30% of all app sales. Existing customers can be moved to the app using a subscription pass provided by the developer and will have to be made available to authenticate through the app.
But all is not lost for content providers, there may be a few loop holes that may be exploited, like providing a cheaper iDevice only subscription package and such. Also another way is to provide access on the iDevice for a small surcharge on the existing web or e-reader subscription plans as an add-on.
For the consumer:
This new policy is quite a mixed bag for consumer, although it may lead to subscription plans getting cheaper for users on their devices, the major drawback is that the content they purchase from their iDevices will not be available to them online through a computer or other readers. It means that what you buy on your iDevices, stays on your iDevice!
The positives are that if you are an existing customer, since Apple had no role in helping you buy from the device, your content will be available through authentication provided by your content provider.
Google’s One Pass
Google has been at the forefront of innovative open solutions that are aimed towards neutrality and giving power to the people. One Pass aims at providing a paywall for publishers to sell their content across platforms (not just android), and at the same time charges less than Apple. This new subscription system is more flexible and offers more to consumers and content publishers as well. Here’s what it means for content publishers and users…
For content publishers
Google as always, has gone for the more open model by relaxing the rules, so to say. It is not only platform independent, meaning it will be available on a host of devices. It also offers publishers full freedom on pricing and Google only keeps 10% of revenue compared to Apple’s 30%, meaning more flexibility and comparatively larger profits. One Pass will also let publishers choose from a variety of business models ranging from daily access pass, subscription based, per-article, metered pass and more. It will offer out of market purchases too, wherever all ( not Apple).
Its sounds all good but what sounds too good to be true generally isn’t! The main problem it seems with One Pass is that its based on an open system and there is so much free content that is available on the internet. Getting users to pay will be a challenge that only quality content can overcome. Plus since content is available cross-platform, there is only a one time fee that the publisher can charge to its consumers.
For the users
If you purchase content regularly and are totally addicted to your e-book reader and mobile gadgets, then One Pass may just be a dream come true. It will offer a variety of plans that can be purchased from different sources and can be accessed on multiple devices too. It will also simplify keeping track of all your purchases in one convenient location. All your previously purchased content can be delivered to you by your publisher by a simple coupon mechanism.
The Bottom Line:
Will paywalls be successful in what they have set out to do, i.e. essentially provide users with an easy payment method and the publishers with a new revenue stream aimed at the exploding mobile market, only time will tell. Which one will take off and which one crashes and burns is also anybody’s guess right now. While Google’s One Pass offers a more flexible model for developers and users alike, Apple provides a user base that is more willing to pay for content. The success of either of these payment models rests largely in the hands of the users and publishers….for now anyways.
What’s your opinion?
[Guest article by Chaitanya Khanapure, a app enthusiast.]
Recommended Read:
- Mobile Internet Trends for 2011–SoLoMo [Social, Local & Mobile]
- Mobile Trends 2011–Apps Are The New Web, Communities The New Currency
