Apple had once planned to handle all subscriptions to magazines, newspapers, and ebooks through its own Appstore and take 30% out of each transaction to do so. This policy was to go into effect during the next few weeks and was met with heavy resistance in the publishing industry. In a rare 180, Apple now allows publishers to set pricing for subscriptions while no longer requiring them to sell subscriptions within the App Store.
This is a huge win for the publishing industry and may woo back companies like Sony whose app a few months ago was denied because they handled all of their subscriptions internally, which was in violation of Apples new subscription model.
One of the draw backs is that Apple’s subscription based system via the Appstore was only able to handle 10,000 products maximum, which would hurt the major ebook stores such as Amazon, Kobo and Barnes and Noble. Another drawback was the fact that since Apple handled the subscription sales, the companies were going to miss crucial demographic information in order to woo advertisers.
There is no doubt that the iPad is attracting major publishers and companies to do business with its closed ecosystem because the company basically dominates the tablet pc market. “I am a little surprised they took this long,” Gartner media analyst Mike McGuire said about Apple’s change of heart. “I think it makes sense.”
In the end Apple is still allowing people to sell subscriptions in its app but not insisting upon it and making it mandatory. This is good news for companies like the Financial Times which made its own HTML browser app in order to bypass Apples subscription policy. How this plays out is anyone’s guess, but it is good news for Spotify, which can continue selling subscriptions outside of its app and Amazon can continue to sell books via its own website.