Apple Unveils Digital Media Subscription Service

Feb. 15, 2011
Company will take a 30% cut of the revenue for subscriptions sold through applications featured in its App Store.

Apple unveiled a long-awaited subscription service on Tuesday for digital newspapers, magazines, music and video purchased through its online App Store.

Apple will take a 30% cut of the revenue for subscriptions sold through applications featured in its App Store, the Cupertino, Calif.-based company said.

There will be no revenue sharing for digital subscriptions sold through a publisher's own website, Apple said.

But the company said "that same subscription offer must be made available, at the same price or less" to customers who wish to subscribe from within an application.

Apple also said publishers will not be allowed to provide links in their applications to outside websites "which allow the customer to purchase content or subscriptions outside of the app."

"Our philosophy is simple," Apple chief executive Steve Jobs said in a statement. "When Apple brings a new subscriber to the app, Apple earns a 30% share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing."

Jobs, who has been on medical leave since last month, said the subscription service "will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod Touch and iPhone."

"All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app," Jobs said.

Apple's subscription service was first offered with The Daily, a digital newspaper for the iPad tablet computer launched earlier this month by Rupert Murdoch's News Corp.

With print advertising revenue and circulation declining, Murdoch and other newspaper and magazine publishers have been looking to the iPad and the Web for revenue.

Many major U.S. newspapers and magazines have created paid or free versions of their publications for the iPad in a bid to increase online revenue.

Apple said publishers will set the price and length of subscriptions -- weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly.

Customers will be automatically charged through their online account based on the length of subscription selected.

Copyright Agence France-Presse, 2011

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