Thursday, June 16, 2011

Apple Budges on App Restrictions

Publishers can breathe a little easier this month as Apple relaxes its grip on content delivered through iPhone and iPad apps.  Miguel Helft reported in an article for the New York Times that Apple quietly revised its policies in an updated list of guidelines for application developers last week.  The old regulations required any publisher selling content through the devices to offer them through the App Store and share 30% of the profits with Apple.  With publishers threatening to withdraw their apps and antitrust regulators taking a deeper look into the business practice, Apple drafted new rules allowing companies to sell subscriptions on their own websites and make the content available through apps.  

While publishers aren’t required to allow the purchase of their content directly from apps anymore, when they do, the purchase must go through iTunes and Apple will still take a hefty 30%.  Still, the news is good for magazine publishers and for Apple.  With the success of the iPad and iPhone so heavily dependent on the amount of content available on the devices, and the majority of Apple’s profits coming from sales of those devices (the sale of music and apps accounts for roughly one-twentieth of Apple’s revenue)  many in the both the technology and publishing industries were surprised by the constricting policies.  Major magazine publishers Hearst and Condé Nast recently negotiated agreements with Apple to sell subscriptions.  The New York Times will be following suit, while Time Inc. holds out a little longer save for a small deal allowing subscribers to access a few titles on the iPad.

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