Apple Continues to Vallidate 2011 as the Year of the App Subscription

Earlier this year, we predicted 2011 would be the Year of the App Subscription.

By that we meant that publishers are going to need to figure out the mechanics of charging for app-based subscriptions. Regardless of whether or not they actually develop an app specifically for the iPad or a competing tablet platform, and whether or not they actually roll out a subscription fee for app-based access, what's clear is that 2011 will a make-or-break year in terms of how publishers and readers approach app-based access to magazines.

Since then, we've seen Apple make a significant change in its subscription policies, as reported in the New York Times -- a breakthrough we had said would be necessary for magazine publishers and subscription platforms: "Apple Offers Subscriptions for All iPad Publications."

The latest validation of our prediction comes from the Wall St. Journal, which reported today that Kobo would not be allowed to sell digital books directly from its apps -- due to pressure from Apple. At the same time, the Journal announced that it will stop "circumventing Apple's payment system by providing links to its website from inside the iPad app, (and) will soon remove ll purchasing option in the app in response to Apple's new rules." Instead, people "will have to either call customer service or visit wsj.com."

While both announcements represent a step backwards for consumers, it shows that Apple is taking a strong stance in protecting app subscriptions.  Making things more complicated is not a win-win for content developers, consumers or, ultimately, Apple, I think, because consumers will be frustrated with both the content developers and Apple. In an interesting article about Hulu, the New York Times reported about consumer frustration with the lack of availability of some TV programs via Hulu -- for example, some programs are available on any platform, some limited to only your laptop.

For app subscriptions and video content to continue to be pervasive, they must make it easy for consumers to purchase. Setting obstacles is the wrong policy. I expect that ultimately consumers will get what they want, but that may turn 2012 into the Year of the App Subscription, Part II -- while things sort themselves out.

You can read more about the issue at Technologizer by Harry McCracken.