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

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52 Comments

1. Wazupmrg

Posts: 141; Member since: Apr 10, 2017

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

8. Phullofphil

Posts: 1752; 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: 162; 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: 208; Member since: Aug 06, 2013

Apple = leeches

5. peace247 unregistered

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

6. kanagadeepan

Posts: 1222; 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...

7. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

That's why some people don't like iOS and Apple: they can't pirate and they can't use other people's work for free.

9. tedkord

Posts: 17136; Member since: Jun 17, 2009

You managed to twist logic into quite the Escher pretzel there. But, deep down you just had to deflect from this slimy move by Apple. You can't help it.

11. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

I have no problem with Apple (Google, Samsung or anyone else) making money from doing the right thing. I've been watching the users for sometime now and one of the main selling points for Android is its open nature - "I can sideload apps, I can sideload that 10€ game so I won't have to buy it; I can't on iPhone so Apple is bad. Now Apple is offering the developer of the game a solution that will stop me from stealing his work (because the developers will do the same on Android)... Apple is evil!"

12. mootu

Posts: 1422; Member since: Mar 16, 2017

You will twist anything Apple does as being good no matter what it is. This is nothing more than another cash grab from them, what they need to think about is inreasing their user base if they want more revenue. They need to realise that their customers don't have endless cash reserves and they will draw the line somewhere. I know a few people who are thinking of leaving Apple due to the greed, these are people who have been using Apple devices for years, they have good jobs with good income but they are saying enough is enough.

15. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

I am also in the business of making money and I will find new ways for my clients to give me MORE money in exchange of something they will want to buy; it is that simple. It's ok if you don't like that, but this is just the way successful businesses work (and this is how they afford to pay - generously - their employees and the taxes). The price should never be a subject, because it is the USER that decides to pay it or not. Someone was giving the example of Evernote that changed their paying model - that's fine, they are not forcing anyone to accept it, there are a lot of free note taking apps (Keep, OneNote), just use one of them; oh, you like the way Evernote is working? Than pay their price and shut the f up, because you're paying for the developer's effort to make a note app that YOU WANT TO USE. I personally like the idea; why should I pay 10€ for an app that I will only use once? Why should I buy a few hundreds € worth of music for a 2 week trip through Europe, when I can pay 5€ to stream all the music I want? etc. Every company needs to do s**t if it doesn't want or have to. Apple removed the fp scanner, put a 1k$ price on a phone and that was their best seller (this year); Samsung sealed the battery and its sales went up; Huawei, with only splash resistant, LCD and Kirin devices, is heading to no1. They all have a target audience and they offer what most of that audience is willing to buy. I only care about Apple's products that SUIT me; I have bought 3 Android devices after my iP7 and not because I hate Apple, but because they were the logical choice for their PURPOSE. Just get your heads (this is for everybody that is hating the player) out of your "I hate Apple" paradigm (I would say the same thing for the "I hate Google" dudes, but they are a minority here) and see the market as it really is.

18. tedkord

Posts: 17136; Member since: Jun 17, 2009

It doesn't matter how long a silly diatribe you post here, this is a slimy move by Apple. It'd be a slimy move by any company.

17. tedkord

Posts: 17136; Member since: Jun 17, 2009

You can on iPhone, with jailbreak. As I stated, your logic is not real. This had nothing to do with pirating, it had everything to with Apple making more money,by renting consumers games/apps instead of buying them. Like that game? Want to keep playing it? Pay us again.

22. rouyal

Posts: 1567; Member since: Jan 05, 2018

Quit playing victim and man up. Why are you worried about it anyway? You're too cheap to use an iPhone.

26. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

"You can on iPhone, with jailbreak" - I should use an old version of iOS without the latest security patches (and with a voluntary security hole) so that I could do what on my iPhone? The subscription system is all around you: you don't have your own power plant, you pay a subscription for electricity; you don't have your own well (you might have, but it's more expensive to maintain) you pay a subscription for current water; I don't think you have your own plane or train - you buy a subscription (in the form of the ticket); you want a car, you rent or lease one etc. A lot of us don't buy expensive storage options for all of our devices - I got subscription for cloud and this saves me at least 500€/device/10 years (and I have 4 main devices, my family cloud is accessible for another 5 family members) that saves me ~5k€ in 10 years. The leasing of the phones in my country is more expensive than I pay right now, but when it'll get as cheap as I care to be, I'll lease my phones. Somebody is making more money (the developers, Apple, Google, MS - very well, let them make money), I get to buy what I want and spend less on what I don't use (good for me), reckless and thoughtless people will spend more money (bad for them). Where are you in all that?

44. NarutoKage14

Posts: 1306; Member since: Aug 31, 2016

You're defending this as if it was you behind this idea. You don't seem to understand that what people are rilled up about is that company "A" is trying to convince companies "B,C,D,E,F,G,etc..." to raise their prices so that company "A" can make more money. Apple is trying to dictate how other businesses price their services. I believe that may fall under price fixing laws in the US, which is potentially illegal. Also, not every app makes sense as a subscription service.

47. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

I would really like to know why do you think Apple (or my company, or your company) should not want to make more money (to raise salaries, my salary, your salary, your family's salary, to invest in better products/services, to invest in cleaner tech etc); if you're living in a communist country, I don't care to know what you have to say about economics. Don't you worry about the legal implications as there is nothing illegal; also, don't worry about making sense, that is the developer's job, he alone is going to chose what to do, because Apple is not forcing him to do anything.

10. hurrycanger

Posts: 1756; 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: 136; Member since: Aug 08, 2012

Would love to see Apple fanboys defend this

19. tedkord

Posts: 17136; Member since: Jun 17, 2009

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

23. rouyal

Posts: 1567; 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: 136; 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: 136; 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: 136; Member since: Aug 08, 2012

I give up

34. OneLove123

Posts: 850; Member since: Aug 28, 2018

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

27. Leo_MC

Posts: 6716; Member since: Dec 02, 2011

Why not pay once for electricity and have it forever?

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