Apple Begins In App Store Payment
Apple Inc. (NASDAQ:AAPL) has given a go ahead to publishers of magazines, newspapers and other content applications to sell issues of their content from inside the application without going to Apple online app store every time.
The subscriptions of magazines and newspapers will be sold with the same mechanism and billing system that is followed in app store billing for iPhone and iPad. The publishers who provide their content will have to offer their lowest cost on Apple’s app store.
A statement was released by Apple Chief Executive Officer and Founder Steve Jobs explain the process of these subscriptions. Any publisher will have to offer the smallest possible price or a price that is provided outside of the application. Steve Jobs is currently on medical leave, but is still involved in all strategic decisions of Apple.
Apple will charge subscribers with 30 percent of the subscription fees that the publishers demand from inside the applications. This fee is for attracting customers to the publisher’s content. If the publisher brings in a customer from their website who could be a second time customer, then the publisher can keep hundred percent of the revenue.
Proving that the customers were directed from online websites will prove to be difficult for the publishers. Publishers will have to develop their own technologies to prove that Apple did not attract customers to their content and instead it was them who routed customers to the App Store.
Apple’s App store recently rejected an ebook application from Sony and Amazon who sold ebooks from inside their application or by directing customers to their website. This was a part of the company’s strategy to obtain the same kind of control that it currently has over audio sales.
Apple helped revolutionize the music industry by providing music records with thousands of customers through its online stores. Its process of keeping a part of the audio sales and giving the rest to the record labels is being mimicked here.
News Corp (NASDAQ:NWSA) recently announced a iPad specific daily magazine called the “The Daily”. This is the first magazine that will follow the in app subscription fee. The devices which need to be able to accept in app purchases need to be upgraded to the latest OS.
Apple’s application store has more than 350,00 applications for customers with an iPhone, iPad and iTouch. Till date, more than 10 billion applications have been downloaded from the online store.
Apple’s shares fell by 26 cents to close at $358.9 in the Nasdaq Stock Exchange after this subscription news was released.
