Apple introduces paid subscriptions for iOS apps

The Daily at $0.99 per week. That's better than the WSJ iPad subscription at $4.99 PER WEEK. Hopefully with the new subscription model, iPad newspaper reading will be reasonably priced. Reminds me the music industry 10 years ago ...

(reproduced from macworld)Posted on Feb 2, 2011 9:41 am by David Chartier, Macworld.com

The big story out of News Corp’s press event Wednesday morning was, of course, its new publication for the iPad, The Daily. But a less discussed feature potentially has much wider implications: Apple’s introduction of paid subscriptions.

So far, there has been no way to charge subscription fees in iOS apps. It’s a feature that developers and publishers have been requesting for some time, and only more vocally after Apple introduced the iPad.
Eddy Cue, Apple’s vice president of Internet services, came on stage to announce the The Daily’s subscription model. After its initial free trial period of two weeks (sponsored by another Apple partner, Verizon), the publication will cost $1 per week or $40 per year. Cue didn’t offer many more details at the event, however, but a change to the iTunes Store’s terms of service shed some light on the feature and Cue said an announcement about subscriptions for others would be coming soon.

Sensibly enough, Apple refers to this model as “Paid Subscriptions.” The Daily—and soon other publications, according to Cue—can charge subscription fees for their content over a certain period, such as a week or month. These charges can be set up to auto-renew, with your iTunes account automatically being charged no more than 24 hours before the expiration date of your current subscription period. Your auto-renewal will be disabled, however, if a publication raises its subscription price. If you opt to begin paying for a subscription during a free trial, billing will begin immediately, not at the end of the trial period. And you’ll be able to manage all your subscriptions through a new section in your iTunes account.

Interestingly, it appears as though Apple has ceded the ability to access customer information to publishers—a key point of contention in the publishing industry’s march towards iOS distribution. The new terms state that the iTunes Store may ask for permission to provide your name, e-mail address, and zip code to publishers for marketing purposes (the terms are not specific, but it also suggests that you have the ability to decline this access on an individual basis). Once publishers have that information, they are free to use it according to their own privacy policies.

At least one major question still remains with the introduction of subscriptions: what is Apple’s cut? Apple’s terms thus far for the App Store specify that it gets 30 percent of all apps and in-app purchases. That has been a big number for some companies to swallow, especially when much of the content and infrastructure is being developed by the content provider, and not by Apple.

However, it’s fair to assume that News Corp and Apple may have worked out a different arrangement in order to make The Daily’s subscription model appealing. Apple’s promised announcement should tell us what the subscription model will mean for content providers, so we’ll have to see if other publishers warm up to Apple’s terms for the new paid subscriptions feature.