Apple‘s unlocked some of the controversially tight terms and conditions that previously surrounded its digital content subscriptions service for apps published inside the App Store. Specifically, it’s dropped the requirement that while apps can “read or play” approved content that’s sold outside of the app–and Apple will extract no income from these transactions–there was a stipulation “the same content is also offered in the app” using Apple’s Store, “at the same price or less than it is offered outside the app.” This stipulation is now gone.
It was always a controversial move, as it meant Apple was, while allowing traditional content owners to manage periodical access their material by subscribers, also trying to control that market. Though you could sell, for example, a subscription to your newspaper outside of Apple’s App Store framework–and thus avoid giving Apple the usual 30% cut–you couldn’t price it cheaper than it was available inside the App Store. That placed the onus on the providers to attract customers to buy material on their site, instead of via the simple and well-known App Store mechanisms.
By removing the restriction, Apple’s allowing newspaper, magazine, e-book, and TV show vendors to offer their content at a discount in their own stores, which could potentially attract more customers due to competitive prices, and thus drive up their revenue. Simultaneously, Apple’s removed the requirement that subscription-based content must simultaneously be made available as an in-app purchase, when it’s also available in a separate store–meaning vendors are free to be the exclusive channel to their content.
Amazon, Netflix, and others will be pleased. It could also smooth negotiations with publishers over e-versions of their content, which haven’t necessarily been going so great. The Financial Times, for example, chose to go with a less interactive web-based version of its newspaper for the iPad rather than a native app so it didn’t have to abide by Apple’s rules–with the 30% fee being a particular sticking point.
How smart of Steve Jobs, then. Except there’s a catch: This is all okay as long as “there is no button or external link to the app to purchase the approved content.”
Hmm. So Apple’s saying: “It’s okay to be the exclusive storefront for you periodical content, and we won’t take a cut…but you can’t link to it in any way from inside the pertinent app.”
You could argue it’s Apple trying to prevent any fragmentation of the user experience of purchasing content via its App Store ecosystem. But you could also say it’s a revenue protection measure, via a sneaky trick that means consumers have to jump through a few extra clicky hoops to get content this way. And if magazines see subscriber numbers suffer as a result of this, then they’ll probably consider putting back Apple’s buttons and handing over the 30% App Store fee.
As a result, it’s hard to say if this will breathe life into the sputtering e-magazine and e-newspaper industry, or add a whole new layer of complexity. Still, progress is progress, right?
[Image: Flickr user tbisaacs]