Apple's announcement last June regarding a new subscription-based business model in which app developers get a bigger piece of the pie is now materializing.
Subscriptions were previously limited to video and music streaming apps, but Apple changed all that with its new auto-renewable subscription model that is open to all apps regardless of the categories they fall into. Moreover, a better split awaits app developers that retain their subscribers for more than a year.
"We are excited to open this business model to apps of all types and provide you with new opportunities to grow your business and support your customers," says Apple.
Apple explains that with auto-renewable subscriptions, the subscription gets automatically renewed after each billing cycle unless the subscriber opts to cancel the subscription. Apple also specified that when a user signs up for a free trial, the subscription automatically begins but the user won't get billed until after the trial is over.
As for revenue, the app developer will get the traditional 70/30 split for the first year of the auto-renewable subscription. If a subscriber racks up a year of paid service, the developer will see an increase to 85 percent of the revenue, with applicable taxes deducted. However, if a user unsubscribes from the app for more than 60 days, the accumulated paid service days will be reset.
"A move to a subscription in a different subscription group resets the days of service," Apple adds. "[The developer] will receive 70 percent of the purchase price until one year of accumulated service passes."
Furthermore, Apple's guidelines for auto-renewable subscriptions also allow developers to offer service levels and subscription groups, which will give subscribers more options for upgrading, crossgrading or downgrading their subscription levels. Apple also opens up territory-specific pricing in which 200 price points across all currencies are available for developers to use.
Developers can also increase the subscription fees for existing customers or opt to keep the price for them while setting a higher price for incoming customers. Subscribers will be notified regarding the increase in subscription fees and they will be asked if they agree to the new subscription fee. If they do agree, then the subscription will continue but if they don't or if they fail to take action, their subscription will end after that billing cycle.
With the upcoming macOS Sierra and iOS 10, Apple promises to provide users with more tools in order to manage their subscriptions.
