updated 01:25 pm EST, Tue February 15, 2011
Clock starts ticking for Amazon, Netflix, others
The deadline for apps to implement equal in-app subscription options is June 30th, a memo reveals. Sent to publishers earlier this year, the note mentions that apps must soon incorporate a new In App Purchase API. The June 30th deadline is in fact said to be a "grace period" for existing apps, implying that new ones must already have in-app subscriptions running.
While Apple is now allowing apps to offer content on a subscription basis instead of charging per download, it is also demanding any outside payment options be matched by in-app options. The policy applies not just to newspapers and magazines, but also to music, video and any other content offered via subscription. Many companies will therefore have to upgrade apps and change business models in the next few months, including Amazon, Netflix and Hulu.
A major concern for the industry will likely be the fact that Apple is claiming 30 percent of the revenue for any in-app payments. Using a web portal to sell subscriptions lets a publisher keep all of the money, but is less convenient. This may skew revenue in Apple's favor, and potentially lead to higher prices in order to compensate. Apple is moreover banning any app that links to an outside payment site.