The subscription model has made its way to the app store, and to a lot of publishers it couldn’t have come sooner. In the past if a company wanted to monetize their updates or new content they would essentially have to release a separate app or purchase which to a consumer meant not only purchasing the new content but searching and downloading it to, meaning a cost of time, effort and money. So unlike the subscriptions magazines etc could count on in the real world, every issue they release on Ipad would feature a steep drop in readers, for example the first issue of Wired sold 100,000 copies but the following July issue was down to 31,000.

So how does the App Subscription Model work? The developer/publisher completely controls the price and length of the subscription, which can be purchased in the same manner as in-app content (add-ons) as well as through the app store or from the developer/publisher. So will the availability of subscriptions greatly influence the publication of content to the app store, it seems a foregone conclusion that it will, as a subscriber base not only represents regular sales revenue for a magazine or application but also boosts advertising revenue as the subscriber base represents a minimum number of viewers/users.

What kind of apps will make the move to subscription? Obviously digital magazines and their kin will be the first to adopt the subscription model, but there are many other forms of apps that could become quite profitable from a subscription model. Mobile-TV, streaming channels of video content to the phone will now be a more pleasing concept at a subscription price point. There will be an increase in multiplayer (across different phones) games as a subscription fee will allow for dedicated servers, in general it is likely that many games attempt to adopt this model to provide ongoing content updates and improvements.  Essentially any app that seeks to streamline the updating of content would benefit from the subscription service given the drop offs experienced when using stand alone packages.

What does Apple Take? Possibly the most galling aspect of the subscription model and the only thing that could prevent its wide market adoption is the revenue sharing model cooked up by Apple. Basically when a publisher brings a existing or new subscriber to the app they keep 100% which is more than fair, however if Apple bring the new subscriber they earn a 30% share. So how does apple bring a subscriber? If it is purchased in the App Store, or purchased In-App, using the Apple Authentication system than they receive their 30%. Furthermore any deal offered outside of the App Store or In-App can’t be a better offer than the one offered by Apple. Meaning a developer/publisher will have a hard time enticing users to purchase content through their systems and not Apple, meaning more often than not Apple will be getting its 30%.