What is Apple’s new in-app purchase policy & how does it affect people from different areas?
In-app purchases are used to sell content in numerous categories. Available content ranges from services, new features, and even subscriptions. On an Apple store, a user is independent to make purchases on/for an iPad, iPhone, Apple watch, and Television.
The in-app purchase is divided further into four main categories:
- Consumable: An in-app consumable purchase could be anything that can be exhausted with time or usage. These mostly include subscriptions, purchases for games like coins or gems, or maybe progress in a particular game.
- Non-Consumable: Non-consumable items usually come with one-time purchase options. These items can include filters for a phone camera, business application with one-time purchase options e.t.c.
- Auto-Renewable section: These services come with a subscription that gets exhausted in a time frame. The consumer needs to refuel the quota to keep the service working. These services could be a subscription to a monthly magazine or a yearly purchase for an upgraded feature of an application.
- Non- Renewing Subscription: There are certain limited-time features or one time purchases bought from the app store. Due to their fewer availability, it is hard to renew their subscriptions. Therefore they remain as a non-renewing subscription due to their limited availability.
In a statement issued by Apple to the media, regarding the in-app purchase policy; “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 apps.”
The statement raised concerns, as the publishers/developers of these services had to pay a large chunk of their share to Apple. The calculated share was estimated to be 30% of their earning.
The implemented policy included all the products. These included magazines, newspapers, videos, movies etc. Even the high stake players like Hulu Plus, Netflix, Spotify, and Rhapsody did not get any flexible walk away.
The biggest challenge was the 30% revenue that these applications had to share with Apple.
To avoid any purchases outside the Apple environment, Apple does not allow any external purchase mechanism that can grant users a subscription in Apple. Hence, there was no backdoor entry for anyone. It was clear that if these companies wanted to serve their business to the audience of the Apple environment, they have to bow down to the laws laid by Apple.
Another restriction for the application is that they can not link themselves to the Amazon website.
After facing criticism from several competitors, publishers, developers, and even service providers, Apple made changes to its policies.
The new rules allow developers and publishers to set the price of their products and services according to their convenience. However, the restriction on linking external sources within the application is still prohibited.
Apple is not forcing Amazon to sell their books in the Apple store. If Amazon decides to do so, they are allowed to charge a premium amount from the customers. It will help Amazon compensate the amount to Apple.
Another reason for the change in policy could be the Financial Times application winning an award for the best web-based application. The application can bypass the Apple AppStore and can open in a browser.
However, Financial Times will continue to host their application on the Apple platform, but they aim to direct the audience on to their browser-based web-application.
Though the FT Times new web-based application created a polarity amongst the other publishers. They have to decide their future with Apple-store.