Aside from hardware sales, apps are a major source of revenue for Apple. Though official Apple apps make up a tiny, tiny fraction of all of the available apps on iOS, the company still gets a percentage of every app sale through the platform. This extends to in-app purchases (like the ones you find in free-to-play games) and apps that primarily generate revenue through subscriptions, such as Netflix.
Apple, it turns out, really likes the subscription model, and it wants developers to pursue those as a source of ongoing revenue where they can. A new report from Business Insider claims that Apple held a secret meeting with around 30 different app developers last year to discuss the perks of the subscription model.
The biggest perk, obviously, is that developers who at one point offered their apps for a one-time fee could instead shift to a subscription-style monetization model and make it easier to keep the lights on. The initiative that Apple introduced to these developers during the meeting is called “Subscription 2.0,” and it sounds like the company took a rather holistic approach to pitching and supporting subscriptions, talking to developers about things like customer acquisition, retention, and advertising.
Apple, of course, gets a portion of that ongoing revenue, and in order to make subscriptions more attractive for developers, it cuts its usual 30% take in half once a user has been subscribed for a year. With Apple only taking 15% of long-term subscription revenues, switching to that model becomes much more viable for developers, and it essentially becomes a win-win situation for everyone involved.
That is, of course, aside from consumers, who usually don’t have unlimited funds with which to subscribe to an endless list of apps and may have to pick and choose between services instead of simply buying apps when they have the funds available.
It isn’t all that surprising to hear that Apple may have been pushing developers toward subscription models, as it’s worked out wonderfully for apps like Netflix and HBO Go. The big question is whether or not those developers can create apps that see enough use to justify an ongoing charge. If Apple can lead the App Store in the direction it wants, though, we can probably expect to see a larger focus on subscriptions moving forward.