Apple’s WWDC event is scheduled for next week, but that hasn’t stopped Apple from revealing some major details about the upcoming updates for the company’s App Store. While some of the new improvements are made to improve the app review experience and discovery process, one of the major changes that will be introduced in the upcoming App Store update would be the inclusion of a subscription-based business model.
In an interview conducted by The Verge, Phil Schiller, Apple’s Senior Vice President of Worldwide Marketing, mentions that the introduction of a subscription model would alter the company’s revenue-sharing model for apps. Right now, revenue-sharing between developers and Apple stands at a 70/30 split. With the introduction of the subscription model, Apple is introducing a new revenue-split for developers who are able to maintain a subscription to their app for longer than a year. Should the app manage to maintain a subscriber base for more than a year, the revenue split would change from 70/30 to 85/15, removing 15% of Apple’s cut and giving it to the developers instead.
As for how the App Store subscription model will work, LoopInsight reports that developers will be able to choose one of over 200 subscription price points. Developers would further be able to create region-specific prices to make subscriptions even more flexible. Subscription prices can be raised, but customers will be notified about the raise and they can opt to continue on with their subscription or terminate it on the spot. Furthermore, developers are allowed to keep current subscription at one price, while charging new subscribers with a different price. On the consumer side of things, customers will be able to upgrade, downgrade or even side grade subscriptions should the option be available.
Search ads will also be implemented in the upcoming App Store update as well. Up until now, Apple has not allowed developers to pay for ad space on the App Store. With the update, Apple will be implementing a system that would see them auction off ad space to developers. There will be no minimums and exclusives in the auction system, which will allow smaller developers to bid for ad space as well. Most importantly, Apple will only be accepting ads from developers in the App Store, meaning no third party ads will be display. As for the consumers, Apple will not be tracking users and will not be sharing data about users ad clicks with developers. Apple has also stated that it would not be serving ads to people 13 years or under, assuming the device is able to determine the age of its user.
Subscriptions and ads aside, the app review process will be tuned so that the turnaround time has been dropped. According to Schiller, the new app review process will see half of the apps submitted to Apple being reviewed with the first 24 hours and 90% of apps reviewed within two days.
Source: The Verge, LoopInsight
