Ahead of its annual worldwide developers’ conference (AKA WWDC) which starts on Monday 13th June 2016, Apple has already revealed some details with regards to a change to the App Store. This change is to do with how the revenue is split between the developer and Apple.
Since the launch of the App Store on iPhones and iPads the developers have kept 70% of all revenue earned. Even on subscriptions. Incidentally, subscriptions already existed for apps. For example, you could subscribe to a magazine on the iPad and pay that annual subscription fee or even subscribe to Office 365 from within Microsoft Word on your iPad. However, this revenue split is about to get interesting. A developer will get 85% of the revenue(instead of 70%) on an app/game when the developer can keep a user on their subscription for more than a year. Let’s illustrate this with an example.
For instance, let’s say I launch a magazine for iPhone or iPad and I charge a subscription fee of £1 a year. For a subscriber’s first year I would earn £0.70. If they decide to subscribe for a second year then I would get £0.85 and every year thereafter.
I think that this is a huge win for developers. Apple are basically giving developers an even bigger incentive to charge a subscription fee for their apps instead of charging a one-time payment. This makes sense in some areas(such as games, magazines and even how-to video apps). I can definitely see this changing things in Apple’s app store where more apps are focused on giving users more of an incentive for subscribing to an app instead of paying once for it. At the end of the day, for some developers giving up a hefty chunk of their hard earned revenue is quite a tough ask (especially when an app is priced at less than a pound).
What does this mean for the user? With this change I reckon that there will be a huge backlash from people. We have become accustomed to just paying once for an app and getting updates to that app for free. With this change this anger may cause users to find an app that does the same thing without having to pay more than once for it.
But this is not the first time this has happened. Previously, Adobe previously made their Photoshop, After Effects, Premiere apps (amongst others) available as part of their creative suite. Now, they charge for each application on an annual subscription known as the Creative Cloud. Microsoft has also done a similar thing with their Microsoft Office suite of applications. You can pay an annual subscription fee to use Microsoft Office.
How do you think this change will shake up apps on iPhone and iPad? Let me know in the comments!