Apple offers subscription plans through its App Store
Apple has announced that it will permit Apps developers to start charging recurring subscription fees through its Apps Store.
The move came after a trial with News Corp.’s “The Daily” app for the downloadable newspaper.
As per the scheme, if a customer buys the App first, then later signs up for a subscription through the Apple platform, Apple will take a 30% slice of the renewal fee. It’s a move which will cause friction with publishers who had hoped to push subscription fees to their platforms, where the credit card processing costs would be a fraction of that being charged by Apple.
Although publishers will be able to sell subscriptions to Apps on their own websites, they won’t be allowed to promote that within the App or link to their website from the App.
According to Steve Jobs, Apple’s CEO, their philosophy is simple – 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. All the company requires is, 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.
Finally, Apple will also require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app, which will prevent them from passing on the higher processing fee to the customers.
Cingular Puts New Spin on Music Store
Cingular Wireless is taking a decidedly different tact on its mobile music store. The carrier today launched Cingular Music, but instead of following in the footsteps of Sprint and Verizon, which both built their own music stores, Cingular is instead incorporating existing PC music subscription services such as Napster, Yahoo! Music and eMusic.
According to Rob Hyatt, executive director, entertainment and premium content at Cingular, the company believes that most people store their music collection on their PC and this model allows them to continue to incorporate their online music library with their mobile phone.
Existing or new subscribers to these online music services can pay slightly more to have their online music library incorporated into their mobile device. This service, however, is not available as an over-the-air (OTA) download service, at least not yet. A consumer must connect their handset to their PC with a cable to transfer their music collection to the mobile device.
Hyatt says the company believes that the last thing consumers or record labels need is another music store. Plus, the company also thinks that the subscription model will drive demand because it provides a better value proposition for consumers. Currently, Verizon’s V CAST Music, Sprint’s Music Store and Amp’d Mobile’s music offering all charge consumers per-song download fees for over-the-air delivery of the song rather than offering a monthly subscription fee. “Monthly subscriptions are as cheap as buying a new CD every month,” Hyatt says.
Monthly subscription fees vary by service. Napster charges $14.95 per month; however, Cingular and Napster are currently offering a free 60-day trial. In addition, consumers can play 99 cents and buy songs with the handset and then have them sideloaded onto the device later. Ericsson provides the underlying platform for Napster Mobile. Meanwhile, Yahoo Music! offers monthly subscription rates as low as $11.99 for access to its music portfolio.
Hyatt says that Cingular takes a cut of the monthly subscription fees, which are slightly higher for consumers who want the mobile option versus consumers who only want online access to their music.
In addition to subscription music services, Cingular also is teaming with XM Satellite radio to offer 25 channels of music for $8.99 per month. The service will launch later this week.
The company also has a music ID service from Shazaam that lets users identify a song and purchase it by linking to the Napster library where songs can later be side-loaded.
Cingular Music uses Microsoft’s DRM platform, and Cingular is currently having that incorporated into handsets. The first handset available for the service is the Cingular SYNC from Samsung, an HSDPA phone with multimedia keys, a MicroSD memory card slot and a Bluetooth 2.0 support for headset compatibility. Hyatt says that more handsets are in the works and he expects two more to launch in time for the holiday buying season.
Source- wirelessweek Wireless Mobile Telecom
