The App Store is going to evolve into a subscription-based store

The coming week brings news of what Apple is up to, but Apple has already revealed one of its cards in a rare interview before WWDC.

Right now, there are millions of apps on the App Store, and while a few get into the spotlight, most are in a state of limbo, rarely seeing a download, let alone a purchase.

Even the paid apps aren’t as lucky. Their users pay to buy their apps, and then that’s it. They can’t extract any more revenue from their customers. In app purchases are a solution, but they only seem to be successful in games and apps with huge, loyal userbases. The left over developers are left hanging.

Apple is planning a huge change to the App Store, as Phill Schiller recently revealed in an interview, and that is a transition to a subscription based model. Of course, Apple won’t force this model onto developers and consumers. The developers who deem it as an useful addition to their apps can integrate it.

In addition to the extra revenue, Apple is offering some more incentive to its developers: The ones who manage to have loyal paying customers for more than a year will get a 85-15 split with Apple, rather than a 70-30 split that they usually get.

Another useful addition for developers is the introduction of search ads in the App Store. Basically, developers can pay to get their apps in front of their target audience, which can surely help smaller developers who are finding it hard to get traction while competing against much bigger players.

Apple will formally announce changes at WWDC. The changes will kick in on 13th June. The surprising thing is that Google has already given its rebuttal, and it is undercutting Apple by having the 85-15 revenue split go into effect immediately for select developers.

The new additions are important for developers in the now mature App Store. New users are hard to find nowadays, so why not get more revenue from existing consumers who are willing to pay?

What do you think?





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