Apple’s long-awaited iTunes subscription service finally arrives

By Andrew Couts February 15, 2011

Apple announced Tuesday a new subscription service that allows publishers of any “content-based apps” to offer their customers recurring payment plans. The announcement comes just weeks after the unveiling of News Corp’s The Daily, the first-ever iPad-only newspaper, which uses the subscription service.

The subscription deal doesn’t just include magazine and newspaper apps, however. Apps that offer music and video content will be able to offer the subscription service as well.

The subscription service stipulates that developers must offer any subscription deals through the App Store, at the same price or less than offered through their own outlets.

As we reported in December, Apple will get 30 percent of the revenue of any subscribers brought in through the App Store — a detail that publishers didn’t like, and which presumably held-up the launch of the service. If app publishers are able to earn subscribers outside of the Apple infrastructure, however, they will get a full 100 percent of the subscription proceeds.

“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,” said Apple CEO Steve Jobs in a press release announcing the new service. “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.”

So far, it’s unclear if any publishers other than The Daily have signed on to the subscription plan. But we’d guess there are a significant number lining up to do just that. As TechCrunch points out, the new service would affect video sharing apps, like Netflix and Hulu, as well as e-book apps, like those for Amazon’s Kindle.

Obviously, it’s too soon to say with any certainty, but a digital subscription service through Apple could be the big break media publishers have been looking for, especially those in the struggling magazine and newspaper industries. Only time will tell.

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