Yesterday, a few days before its annual WWDC keynote and conference, Apple released the welcome news of some very interesting updates to the App Store.
From Daring Fireball:
Until now, subscription pricing was reserved for apps that served media content: streaming audio and video, news, etc. Apple is now opening it to apps from any category, which effectively solves the problems of recurring revenue and free trials. Even better, Apple is changing the revenue split for all subscriptions: for the first year of any subscription, the revenue split remains 70/30; after the first year, the revenue split changes to 85/15.
These subscription changes are great news. One of the main struggles with the App Store has been the ability for very well-crafted apps and services to be sustainable in the long term. The “purchase once, free updates forever” model of the App Store isn’t conducive to most small businesses. The additional option of recurring revenue via subscriptions should open up some new opportunities.
The revenue split after year one is also a nice nod to developers. Although, waiting a year for more revenue after an initial customer purchase probably isn’t going to fix any developer’s revenue issues in the short-term. Still, it is great to see some flexibility in the 70/30 revenue split that has been in place since day one of the store.
Unsurprisingly, it also sounds like Apple is trying to do things properly when it comes to the customer’s perspective of subscriptions too. From Jim Dalrymple at The Loop:
Developers will be able to choose one of over 200 subscription price points, and they can create territory specific prices, making subscriptions even more flexible. If a developer chooses to increase the subscription price, customers will be notified and they will have to authorize that increase. No customer will ever be charged a higher rate without first authorizing it, explained [Apple’s Senior VP of Worldwide Marketing, Phil] Schiller.
Customers will also be able to upgrade, downgrade or even side grade subscriptions, if those options are available to them. Developers can also keep current subscriptions at one price, but charge new subscribers a different price.
The options for the new subscription model seem very well thought out.
Paid Search Ads
The current state of App Store search isn’t great. Even if your app title is the exact words that someone searches for, often times your app isn’t the first result. Or worse, a competitor has stuffed their keywords with your app’s name to rank higher than you. This has mostly been solved in traditional web search, but for some reason the App Store hasn’t caught up.
Apple is now introducing the ability to bid on placements at the top of search results to promote their apps for relevant search terms. Back to The Loop:
There will only be one ad on the search results page and it will be clearly marked as an ad, according to Schiller. What’s more, the content of the ad will be exactly the same as the content of the app on the App Store. In other words, no spammy ads. Apple will only accept ads from developers in the App Store—they won’t have any third-party product ads in the store.
Schiller said the ads are done through an auction system for the developers. There are no minimums, and there will be no exclusives, so small developers can get in on the action as well. The ad system will roll out as a beta this summer and Apple will be watching to make sure the system is fair for all developers.
In keeping with its focus on privacy, Apple will not track users and will not share data about users ad clicks with developers. Developers will get reports, but no user data. Apple will also not serve ads to people 13 years old or under, if it can determine that from the device.
Developers will be able to sign-up for the search ad beta and there will be no charge to them during the beta period. When it does go live, after the beta period, it will launch in the U.S. first.
Sounds on the surface like a great addition to the store.
Faster Review Times
Lastly, but most importantly for those of us submitting app updates often, the time it takes for Apple to review an app has been dramatically reduced from over a week average review time to now less than 2 days. This has been happening over the past few months, and it is great to hear from Apple that it is not an accident.
If these great updates were the ones that didn’t make the cut for the WWDC keynote next week, I’m looking forward to it even more now.