Apple video tries to convince developers to use subscription based pricing for their apps

Apple video tries to convince developers to use subscription based pricing for their apps
A new video that Apple produced for app developers is aimed at convincing them that the subscription fee model is the way to go. Can you say recurring revenue? The video features interviews with developers who created apps like Elevate, Dropbox, Bumble and Calm. The bottom line is that these developers seem to agree that offering their services to consumers on a subscription basis helps customers get a better "consumer experience."

An app providing a good service will probably make much more money asking users to pay a subscription fee each month instead of having them fork over a one-time payment. In fact, using a subscription fee model allows the developer to attract potential paying customers by offering a free trial. Those who try an app for free and like the service are apt to pay monthly to keep using it.

The video released by Apple comes after news broke last month about a secret meeting Apple allegedly had with 30 developers in New York last year. This meeting allegedly took place in April, 2017, and during the meeting Apple discussed what is internally known as "Subscription 2.0." This initiative tries to get developers to switch to subscription based pricing for their apps.

And as you might have suspected, there is something in it for Apple. Similar to the 30% cut it receives for a one-time payment, Apple takes 30% of an app's first year subscription revenue. But it also receives 15% of subscription revenue for subsequent years. This helps Apple receive recurring income and can help it achieve its goal of reaching $50 billion in services revenue by 2021. Last year, Apple took in $30 billion in such revenue.

To view the video, click on the sourcelink below.

source: Apple

FEATURED VIDEO

29 Comments

1. Wazupmrg

Posts: 189; Member since: Apr 10, 2017

Way to continue to screw over customers while making the rich richer. Greedy greedy greedy

8. Phullofphil

Posts: 1824; Member since: Feb 10, 2009

I can understand the need to say greedy. The thing is all there doing is trying to make money. They are not a company that owes it to the customer for anything but a product to buy. Everyone is hired to make the company money. If they can offer somthing no matter how much it cost and still sell enough well that’s smart business. What would make the company bad in my eyes is how they treat there employees and if there pauingnthere fair share of taxes and so forth. About how much they sell there products well they are still putting out great products and peopl are still buying it. Eveytime they make a move that makes money they are excused of being greedy. But then they are copied. So greedy is a stretch.

2. Man_Utd

Posts: 188; Member since: Feb 03, 2015

Didn't become a trillion dollar company by looking out for their customers.

3. Michlins

Posts: 9; Member since: Dec 31, 2017

If Apple were a dairy farm, I don't think any cow would be healthy enough to stand. They will find a genius way to turn the blood into milk

4. wesley.

Posts: 217; Member since: Aug 06, 2013

Apple = leeches

5. peace247 unregistered

can't expect anything else from this greedy company....

6. kanagadeepan

Posts: 1271; Member since: Jan 24, 2012

Yes.. Milking the cash cow to death is the way to go. But the sad part is, those cows will praise them for the grass they got till their last breath...

10. hurrycanger

Posts: 1766; Member since: Dec 01, 2013

Evernote is subscription based. I think it used to be $6 one time payment. (is it $4 or $6 a month now?). It sucks. Handwritten notes on it sucks. On the other hand, GoodNotes and Notability are one time payment of $8 or $10, awesome experience. So idk how subscription based enhances user experience. $50 a year for a crappy note taking app vs some awesome smooth beautiful one that costs $10 and will last years. Well I'll just enjoy it while it last.

13. shiv179

Posts: 176; Member since: Aug 08, 2012

Would love to see Apple fanboys defend this

19. tedkord

Posts: 17417; Member since: Jun 17, 2009

Oh, they will. To the death. We've already got one here.

23. rouyal

Posts: 1583; Member since: Jan 05, 2018

That's a pathetic life you live. Stalking the comments of an Apple article. Sad!

14. Shi.O

Posts: 50; Member since: Nov 11, 2011

God! I saw many Android users being so stupid and bias about this article. The reason the subscription is good thing to do for both developers and users is because developers would get more profit, and users would be able to use their app in both laptop or phone versions. I was an iOS user who switches to Android and would go back to iOS is because of the quality of the app and support.

16. shiv179

Posts: 176; Member since: Aug 08, 2012

It is pure greed. Why not just pay once off for the app and enjoy updates thereafter? A higher quality app does not justify leeching users every month.

24. Shi.O

Posts: 50; Member since: Nov 11, 2011

I used to buy app with one time off. Guess what? I could only use that app in my ipad, but for the app that use subscription, it allows me to sign in any device with my account, so if you only want to use one app for one device then it is true, but if it is in my case, i prefer to use in anytime I want in any device. What is more convenient?

25. shiv179

Posts: 176; Member since: Aug 08, 2012

Why does signing in to another device require a subscription? You clearly don't see the greed here, do you?

29. Shi.O

Posts: 50; Member since: Nov 11, 2011

@shiv179: You still don't get it. With subscription you could use the app on both phone (ios or android), or window or mac. See the benefit? Could you do that with one purchase app? No. You ask why the developers do not allow one pay for the same benefit? Would cost a lot higher upfront, so less people would use their app.

38. shiv179

Posts: 176; Member since: Aug 08, 2012

I give up

34. OneLove123

Posts: 1197; Member since: Aug 28, 2018

What? I can use my app anywhere on my android account.

20. tedkord

Posts: 17417; Member since: Jun 17, 2009

It's ironic that you call others stupid, then put out that rationalization.

21. rouyal

Posts: 1583; Member since: Jan 05, 2018

I've NEVER used an app so good that I would make a monthly payment on it.

32. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

Too many butthurt androids who only wants free. No wonder why their OS sucks and their apps were trash.

35. OneLove123

Posts: 1197; Member since: Aug 28, 2018

It's good that you like to spend money on apps. I like to save and spend it on something worth while. You know, like food?

36. Tech-shake

Posts: 213; Member since: Nov 14, 2016

If you sit and think about it for just one second, you would realize subscription is the right way to do apps. I am a developer who used to develop indie games at my old work for android, almost every game we developed was pirated by apps pirating websites and they sideloaded by many customers who wanted the app and didn’t want to pay for it. The potentials of a subscription model is endless for both android ,iOS, and the users. 1. With a subscription model you can easily move between different platforms without having to worry about rebuying an app you use daily. 2. Because you can’t sideload subscriptions, now developers are more interested in making more quality apps for android and keeping them up to date and optimized for the people using the app. 3. This is more a follow up to the previous point, because the subscription base model means that the user is paying continuously, the developer is always more interested to attract more subscribers and keep the current ones. Those are just few of the point I could think of. Now for the majority of the apps to convert to the subscription model, Apple and google should lower their cuts drastically ( I would say to around 10%) this way the developers can price their subscriptions in a way that both guarantees a decent profit for the developer and a decent price for the subscriber. Imo the subscription price shouldn’t exceed 0.99$ for basic apps such as note taking apps or 1.99$ for advance apps such as photo editing apps.

46. Dingy_cellar_dweller

Posts: 339; Member since: Mar 16, 2013

I hope your coding was more structured than your writing.

37. AfterShock

Posts: 4147; Member since: Nov 02, 2012

30% of reoccurring fees should offset trade taxes from China. Oh wait, that still get passed on to end user. This is not good, calculator apps will be making billions soon because you ifan aren't paying enough to keep them Rich for life.

40. Sakeem

Posts: 862; Member since: Sep 05, 2012

I dont know. Sounds good for the developers, bad for the consumer. I only have two apps on my phone with monthly fees.............Netflix and Spotify. I can't imagine having to pay a monthly fee for most or all the apps I have on my phone right now. Hopefully there will be an option for a free app with basic features then a subscription based one with all the bells and whistles. Choice would be good.

42. Valdomero

Posts: 698; Member since: Nov 13, 2012

It's all about how you choose your next move, we as consumers have power over the developers when it comes to money, they depend on us, not viceversa. If Evernote is charging for a note taking app, go for free alternatives (Keep, OneNote, the default note app), they accomplish the same taks, maybe some features are missing in the free tier, but they can be done with a workaround. My gf has downloaded photo editing apps that charge ridiculous amounts of $$$, ie. 45.99/week!, that's insane! that's an automatic uninstall. Snapseed is totally free and does the job. The real question you need to ask yourself is: "is it really necessary to pay regularly for something I'll barely use twice a week when there's a free alternative out there?". You see, you choose to feed those developers or let them know that you don't want their business.

43. Valdomero

Posts: 698; Member since: Nov 13, 2012

Also, wait for deals to happen or choose apps with one-time payment. The only subscription models I think are worth are Video and Music Streaming.

45. Dingy_cellar_dweller

Posts: 339; Member since: Mar 16, 2013

The gift that keeps on giving.

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