UPDATED 14:43 EDT / FEBRUARY 15 2011

Apple Sets Publishers Straight: It Wants Money.

Apple has struggled a bit for its subscription fees to maintain its “fair share” of app subscriptions. Back in January learned we learned that Apple received no money when publishers would bring an existing or new subscriber to the app, but get a 30% share when it would bring a new subscriber to the app. So as to remove any other ambiguities, Apple announced today it would introduce a new subscription plan for magazines, newspapers, video, music and more on the App Store.

Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Then with one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription. Apple processes all payments, keeping the same 30 percent share that it does today for other In-App Purchases.

“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.”

So instead of making things easier, Apple is confusing publishers. Accord to the press release, publishers may no longer provide links within their apps that would allow the customer to purchase content or subscriptions outside of the app.  Most probably, Apple’s decision will infuriate movie download services from companies like Amazon and Walmart, just as it did with the European publishers.

Apple’s measures make it easier for other competitors to boost their marketplace monetization; competitors such as Google, even B&N and especially Amazon are already seeking new ways to generate revenue from their publishing marketplaces as well.  Amazon’s Appstore having already taken 37% of the market share for developers interested in distributing apps through this portal.  Propitious  moment for newcomers such as Condé Nast which is launching digital editions of The New Yorker and Wired for Android 3.0., and Elle magazine has already signed on under Apple’s new rules.


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