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Thomas Szmidel
Thomas Szmidel / January 17

Apple’s new subscription payment revenue split

 

Just ahead of the world wide developers conference (WWDC) Apple shared some interesting news with the tech world. And for a lot of people it was very well received. Importantly they let us know that in app subscriptions was being modified to be a bit friendlier. Until now it fell under the standard in app purchase system where apple took 30% and the app owner received the remaining 70%.

Under the new plan that split stays the same for the first year of subscription but then moves down after that. After that first year, of say magazine subscription, the amount changes to the app owner taking 85% and Apple taking 15%.

 

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Effective June 13, 2016, the revenue structure for auto-renewable subscriptions will change. Within a subscriber’s first year of an auto-renewable subscription, you receive the traditional 70% of the subscription price at each billing cycle, minus applicable taxes. After a subscriber accumulates one year of paid service, your revenue increases to 85% of the subscription price, minus applicable taxes. All current subscriptions are eligible.

 

Paid-Subscriptions

The introduction of Apple Music and Tidal helped add a net 3 million paying subscribers in 2015 — enough revenue to offset losses from digital and physical sales. Paid Subscription is measured in million

 

For a static app like say a flashlight the old model works fine. The app developer make it once then sells an unlimited number of copies at no cost to them. This doesn’t apply to the new fluid nature of content generation. A blog has costs for its writers and spotify has to pay for the music each time it gets a new app download. In essence the costs of next generation apps trial for ages after download. This is wonderful news as they can retain more of their earning in the long run.

Read the offical press release from apple here > https://developer.apple.com/app-store/subscriptions/whats-new/

 

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