“Our philosophy is simple…”
A decade ago, Steve Jobs outlined in-app subscription rules
When you’ve been at this long enough, sometimes you completely forget what you’ve written about a topic before. Or that you’ve written about it at all. Or that you were one of the first to write about it.
Also, forget “sometimes”; this happens often.
Such was the case a couple weeks ago when amidst the unfolding Apple v. Epic imbroglio, my old colleague at TechCrunch, Jason Kincaid, reminded me of a series of posts we did around the launch of Apple’s in-app subscriptions for iOS apps nearly a decade ago:
The year was 2011. In smartphone years, this may have not been the stone age, but it was the bronze age.¹ It was so long ago, in fact, that this was just a few months after Apple rebranded “iPhone OS” to “iOS”. The broader implications were just starting to come into focus…
Along those lines, on a random day in February, just after the launch of The Daily — remember The Daily?! — Apple unveiled subscriptions on the App Store. It was a big enough deal to get its own press release, but not a big enough deal to get its own press event. Again, it was all telegraphed alongside The Daily unveiling, as it was the first publication to use the service. But it was also much bigger than that. This much is clear now, almost a decade later. But re-reading those posts, it was clear back then to some of us as well.
As I wrote at the time:
Simply put: this is one of the boldest bets Apple has ever made. And it could backfire. Or it could be huge beyond belief. Either way, it’s going to be very controversial.
Both things ended up being true, of course. It ended up being huge beyond belief — it’s a key component of Apple’ second-most important business after the iPhone: services. And it was controversial at the time. And it’s even more controversial now, as it is backfiring, it would seem.
And while Apple was just focused on subscriptions with that announcement, it was pretty clear that this would underpin all in-app economics. In-app purchases had been around since 2009 with their 30% cut, but now Apple wanted to extend the 30% across the board. And that’s where we find ourselves today.²
But I think this announcement also betrays a sentiment Apple may wish we all had forgotten. In the words of no less than Steve Jobs:
“Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing. 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. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”
Jobs was saying that Apple was totally fine with app developers keeping 100% of the revenue if they brought in the customer — Apple’s 30% cut would just be a finder’s fee, as it were. And while that’s still technically true, this is also where it feels like Apple has started to deviate from the original intent.
As we all are well aware, Apple now makes it all but impossible to subscribe to a service by any method other than their own. Forget the MFN clause, you can’t even mention that there’s another way to sign up for a service anymore.
As I read this holy scripture, my interpretation is that Jobs intended for Apple to showcase that their payment method was the best and win on those merits. These days, Apple is winning more on obfuscation. One is understandable, the other is shitty.
Apple would seem to be reading their old press releases in a very literal and narrow way. But they’re looking past intent. And while it has taken a decade, such strict adherence to a (rather arbitrary) dogma from a different world is finally catching up to them. It’s time to lead by example again, and revisit those rules.
I’ll give Jason, 9+ years ago, the last word:
Which brings us to why I find all of this so alarming. Above all, I don’t like the precedents that Apple continues to set. The App Store has existed for less than three years, and Apple has been drastically changing the rules on the fly, ruining some businesses and hampering others. It took years to reveal its developer guidelines in the first place, and, even when it actually printed some guidelines, it’s continued to arbitrarily change how it’s enforcing them.
The lyrics have changed, but the song remains the same.
¹ Adjusting for COVID years, this was pre-historic times.
² Except for the backroom hush hush deals, of course. Such deals eventually yielded a 15% second year option across the board.
