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Apple Changes App Rules: Media App Developers To Benefit

Apple’s changes a win for media app developers

By Michelle Hammond
Friday, 10 June 2011

Media app developers stand to benefit from changes to Apple’s App Store policies, which will make it easier for publishers to sell subscriptions on its iPad and iPhone.


An Apple spokesman said in a statement the company has loosened the rule requiring media app developers to only offer content for purchase through iTunes.


Apple has also revised a rule that required media companies to offer paid content on the same or better terms than what they offer elsewhere.


Apple’s original subscription policy dictated that publishers couldn’t undercut the prices offered within their iPad and iPhone applications, but that rule will no longer apply.


It isn’t the first time Apple has appeared to ease its app rules in light of public pressure. Last year, the company allowed a Google Voice app after initially rejecting it.


The latest changes are being viewed as a victory for publishers, who have to share 30% of revenue from subscriptions sold through their apps.


For example, Sydney-based start-up Cloud 9 Comix – a digital comic book publishing arm of Spectrum Pacific Publishing – sells its comics for between $US1-2 via its app.


“It’s a revenue split with the author. iTunes also takes a percentage,” Cloud 9 Comix founder Benjamin Slabak says.


Changes to the App Store policies could be a turning point for media companies, which are struggling to remain relevant in the digital age but are also wary of Apple’s growing influence over their business.


The rise of digital media has disrupted many of the traditional advertising, subscription and retail business models that previously supported media companies.


Free content has proliferated on the web, leading consumers to forgo things like magazine and newspaper subscriptions, and CD and DVD purchases.


Meanwhile, TV is facing pressure from online video, which has led to speculation that more consumers may eventually abandon pay TV altogether.


In the midst of these industry changes, Apple’s early lead in the digital device business – along with the success of its iTunes and App stores – are being viewed by some as an opportunity to establish new digital business models that require consumers to pay for online content.


For example, the Financial Times recently launched its own software application, mimicking its iPad app and making it available on the web, to avoid having to share its revenue with Apple.


The company has urged its readers to download the new alternative instead of the offering available on Apple’s platform.


The move indicates there could be an opportunity for app developers to appeal to publishers looking to bypass Apple in a similar fashion.

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