Apple dropped a bombshell on music subscription services in February that would have translated to higher prices for music fans who like the idea of paying a monthly fee to listen to millions of songs — think MOG, Rhapsody, Spotify, and their ilk.
It’s a slightly complicated situation, but boils down to this: If these services want to offer you a free app with the option to pay for a subscription from right within the app, Apple gets 30 percent of that subscription fee. That is still the case, but subscriptions can now charge whatever price they want outside of the app, as noted by eagle-eyed MacRumors, who spotted a change in the iTunes App Store Subscriptions policy for developers.
Ultimately, this could mean cheaper music for you, not to mention a chance at solvency for music subscription services.
Subscription services (newspapers, music, video, etc.) can now sell subscriptions outside of iOS apps for whatever prices they want, rather than offering them for the same price or lower than within Apple’s apps. This is a big deal, because many music subscription services struggle to stay in business as things stand. To give Apple 30 percent of those fees — without the ability to inflate their price within iTunes by 30 percent relative to the normal price to make up for it — would have made their businesses nearly impossible.
“While it is fair for Apple to charge whatever they want for the value of their platform, it is reasonable for someone like me to argue that Apple does not add more value to MOG than MOG adds to MOG,” said MOG vice president of mobile Anu Kirk, after Apple first announced its plan. “For Apple to basically claim a greater share of revenue than MOG or, say, Rdio, or Rhapsody, or any of these folks are actually getting from their own products is not a sustainable position for us in the space.”
Exactly. Kudos for Apple for backpedalling on this issue, even if it didn’t send out a press release to announce the change, the way it did when instituting this policy in the first place.
Apple’s new text reads as follows:
Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.
(Also, for those of who who are getting sick of reading about Apple, never fear; iCloud week is almost over.)