Apple's in-app subscriptions: Step forward or end-around?

Apple’s forthcoming in-app subscription service – expected to be formally announced any day now – presents some needed clarity for publishers that have been craving a subscription option for their iPad editions. But Apple’s requirements could put a serious crimp in any publisher’s plans to integrate iPad subscriptions with existing print or Web-based subs.

Apple lifted the veil, slightly, on its subscription service at Wednesday’s launch of News Corp.’s new iPad-only publication, The Daily. And while Apple has yet to formally introduce the service, it has updated its iTunes terms of service with a passage on in-app subscriptions, which reads in part:

Certain App Store Products may include functionality that enables you to purchase content on a subscription basis (“Paid Subscriptions”). Paid Subscriptions are non-refundable. Paid Subscriptions will automatically renew for the applicable time period you have selected, and your Account will be charged no more than 24-hours prior to the expiration of the current Paid Subscription.

Various outlets have reported that Apple is requiring that any publisher selling subscriptions from its app must offer Apple’s service as an option – though not exclusively. The publisher can still offer its own plan, often tied to print subs, as publications such as the Wall Street Journal, The Economist and People already do. Publishers currently offering in-app subscription promotions will have to add Apple’s option, reportedly by March 31.

Think about this from a user experience standpoint. A user has two options: subscribe within the app using iTunes, or leave the app to go to a publisher’s site and likely fill out a separate registration form. They’re far more likely to choose the in-app option as a convenience. And the auto-renew function virtually assures that the user will continue to re-up through iTunes.

“Apple has always been very user experience oriented,” said Martin Hensel, president of Texterity, a developer of digital magazines for the Web and mobile devices. “They want to have a great user experience option. That’s good for the consumer, although some publishers will probably not like it.”

Any subscription sold through iTunes, of course, will entitle Apple to the 30 percent cut it takes on all app sales. It also limits the information that the publisher is able to collect on the subscriber, though  Apple seems to conceding some ground on the customer data front. Its terms of service also note that Apple may provide an opt-in for users to share information with publishers:

We may ask for your permission to provide the name, email address and zip code listed in your Account to the Licensor so that it can send you marketing messages about its own products in accordance with its publicly posted privacy policy. Once the Licensor has this information, it will be treated in accordance with the Licensor’s privacy policy.

This is an important step for publishers, but will it be enough to ease the sting of giving Apple a cut of all subscription sales?

A bigger question is whether publishers will be able to integrate their existing subscription-management systems with Apple’s service. They’ll need to provide a seamless way to offer bundled print/Web/mobile subscriptions so subscribers aren’t required to fill out multiple registrations – or worse, asked to pay twice for different versions of basically the same product.

As Poynter’s Damon Kiesow points out, “Allowing access to print, Web and mobile platforms, all for one price, is an obvious value that only publishers can offer. Otherwise, the ease of Apple’s now mandatory one-click subscriptions will quickly prevail among readers.” 

The requirements could be deadly for a company like Zinio, which offers an extensive library of digital publications, sold through multiple channels – including its free iPad app. A big part of Zinio’s value prop is its Unity platform for accessing publications across multiple devices. Zinio’s been noticeably mum on the Apple news this week; I asked for comment on Wednesday but haven’t heard back.

Other publishers are adapting. Texterity, which has published 80 digital magazine apps and has many more in the pipeline, will have to re-do about 10 existing apps to comply with Apple’s requirements, Hensel said in an interview. Overall, he said he’s pleased with the direction Apple is taking.

“What they’re doing seems much more reasonable and smart, for publishers and for themselves,” he said. “Lack of clarity has held back a number of publishers. This gives us a clear path forward.”