The FT’s iOS App – A Hidden Gold Mine

Since the change in Apple’s App Store guidelines back in February, we’ve seen a few examples of companies developing clever workarounds to avoid the 30% revenue share on digital content sales.

Of all these, the Financial Times has probably been the most vocal. Ironically the publisher of everyone’s favourite financially focused chip wrapper still has the chance to grab some dosh from existing users of their app – despite its removal from the app store.

Paid Content reports users who installed the app prior to its removal can still renew their subscription through the app’s built in payment system, completely circumventing Apple, the App Store and the updated guidelines.

According to at FT spokesperson, “The change in Apple’s terms are to the Store terms and conditions…The app is no longer in the Store, but existing users can continue as before.”

Paid Content has some interesting speculation on how much this could be worth to the FT – a rough calculation coming to £3.3 million in subscription renewals, potentially avoiding paying Apple around £1 million commission.

Of course this is just in theory, and in practise is unlikely to happen. The FT also claims most users of the old app have moved over to their own optimised HTML version, stating:

“A majority of our subscribers on mobile devices have become web app users and this number is growing quickly… he number of web app users has overtaken users on our native Apple iOS apps combined, and it’s now delivering the largest share of subscriptions from our mobile channels”.

For my money, that’s happened a bit quick – but if true it’s a strong indication of how the new guidelines are pushing companies and users to work around iOS apps that sell and provide access to digital content, rather than dolling out revenue shares to Apple.

 

Changes in (App) Store

Last week we posted on the changes to Apple’s App Store rules and the impact it’s having on 3rd party apps. Here’s an update on who’s doing what, curtsey of Paid Content:

  • Spotify removed its link to web sign-ups in a July 21 update – “Compliance with new rules for subscription-based apps.”
  • New York Times apparently fell in to line with a July 5 update – “Subscribing is quick easy with your iTunes account.”
  • WSJ is ending all transactions inside iOS apps, saying: “We remain concerned that Apple’s own subscription would create a poor experience for our readers, who would not be able to directly manage their WSJ account or to easily access our content across multiple platforms.” But it hasn’t updated its iPad app since June 10th, and continues to promote a link at the bottom of the app to a subscription Web page.
  • Financial Times’ app remains on-store and unchanged – in contravention, it still allows in-app subs but processes them through its own channel. It is Apple’s most vocal opponent on the issue and now urges users toward its HTML5 app instead.
  • The Economist allows existing subscribers to authenticate for read access, but no new transactions. However, it does offer a link at the bottom of its iPad app to a Web store.
  • Rhapsody told paidContent last month it would become compliant, and on July 21 it removed links from its app to a subscription sign-up page on the Web.
  • Hulu went into compliance with its Hulu Plus subscription app June 17.  Subscribers can use the app but can’t manage accounts in it or sign up.
  • Kindle: The Kindle store was removed from the app last Monday, ending in-app purchasing.
  • Kobo‘s ended in-app transactions on July 23 – another service that now requires transactions from the web.
  • Subscription music service Rdio says right in the app description that it’s a subscription service and you can sign up at http://www.rdio.com. Our understanding is apps can mention subscription status and access but can direct anyone how to sign up—even in the iTunes app description.
  • Barnes & Noble removed the bookstores from the Nook and Nook Kids apps.
  • Google Books: The Google eBooks app was removed completely but is back.
  • Zinio: The magazine app updated July 29 to Zinio 2.0, proclaiming by press release its “frictionless, digital shopping experience” that allows users to “purchase single issues, back issues and subscriptions in-app, simply using their iTunes account.”

The Apple App Store is Closed

Forget the fake Apple Stores that are popping up all over the show for a minute, there’s a bit of a scandal going on in Apple’s all singing and dancing online shop – The App Store.

app store

Back in February Apple announced a change to App Store rules that meant any digital content sold through an app, such as music, eBooks and the like, would see 30% of the profits go straight into Apple’s rather sizable pockets.

It caused a bit of an outcry at the time, not lest of all from Sony – which found its eBook app for iOS rejected from the App Store. Since then there’s been some clever work-arounds with optimised HTML5 mobile sites aimed squarely at iOS users, not least of all the FT.

Now Apple has actually started putting the new rules into force, focusing specifically on eBook sellers. Amazon’s Kindle app, Kobo and Barnes and Noble’s Nook apps have all been removed from the store.

For now it seems the App Store is pretty much closed to any company not willing to fork out a 30% share to Apple. Of course, for most digital content companies this is pretty cut and dry – digital revenue margins are not known for their girth, which means losing almost a third of each sale is a no go.

Kobo is already pushing people towards the company’s own website,saying “With this change, iOS users wishing to access their Kobo account, browse the Kobo Store, and purchase books will now need to go to Kobo.com”. If this development has a ripple effect across the entire App Store, Apple could have forced the end of its own monopoly in the app world.