You’d think that the week before WWDC would be locked-down with nary a whisper emerging from Cupertino, with the exception of controlled leaks to deter unreasonable expectations. But Phil Schiller worked the phones yesterday to talk about a few major changes coming to the App Stores on iOS, tvOS, and — yes — Mac OS X.
A quick summary:
App Store review times are now much shorter. These changes are already in place, and have been widely noted in recent weeks. Apple is today confirming they’re not a fluke — they’re the result of systemic changes to how App Store review works.
Subscription-based pricing was heretofore limited to specific app categories. Now, subscription-based pricing will be an option for any sort of app, including productivity apps and games. This is an entirely new business model for app developers — one that I think will make indie app development far more sustainable.
Changes to app discovery, including a smarter “Featured” tab, the return of the “Categories” tab, and, yes, as rumored, paid search ads.
The shorter App Review times are dramatically different — they’ve gone from a typical one-to-two-week waiting period to, according to Schiller, no more than 48 hours for 90% of the 100,000 submissions they receive weekly.
But the two changes most likely to impact consumers and developers alike are the opening up of subscription pricing to all App Store categories, and the introduction of ads to search results.
Lauren Goode of the Verge:
Schiller imagines scenarios where many kinds of apps that were previously single-time purchases could move to the [subscription] model. Games that have an ongoing subscription-like program, ones that have a massive online playing world that require upgrades of game worlds, might make sense. He suggests many enterprise apps could move to subscription, and that professional apps that require “a lot of maintenance of new features and versions” would be a good fit.
Currently the 70-30 revenue split for subscriptions is the same as regular purchased apps. However, under the new subscription rules, that revenue split will favor the developers more in the second year on individual subscriptions. Developers will get an 85-15 revenue share for all subscribers that have been customers for over a year. This will also affect all existing apps and subscribers, not just new apps.
There’s a lot to love about this new subscription pricing scheme. It benefits new users by providing a smaller barrier to entry — for instance, OmniOutliner is a famously-spendy app that starts at $40 for the iPhone app (that’s an affiliate link, if you want to give me money and own a great app at the same time). It’s hard to convince people to spend $40 on an iPhone app, no matter how great it is.1 If they wanted to, the Omni Group could conceivably charge $3 per month instead, making the app more approachable. During the first year of someone subscribing to the app, Omni would make about the same as they would for the flat $40 fee. But, during subsequent years, they’d make about $5 more per customer, owing to the new pricing split.
But what needs clarification is whether this would even be possible for an app offering nothing more than regular feature updates. In his press interviews, Schiller gives the impression that apps could have a subscription built-in to cover ongoing maintenance — note, for instance, the pro apps example he used in his interview with Goode.
But, in the developer documentation, Apple paints a different picture:
Types of Auto-Renewable Subscriptions
Provide paid access to content that is updated or delivered on a regular basis, such as newspapers, educational courses, or audio or video libraries.
Provide paid access to an ongoing service within your app, such as cloud storage or massive multiplayer online games (MMOGs).
The other major change to the App Store is the introduction of paid advertising within search results. This is going to be controversial. Goode, again:
So how will the search ads work in the App Store when they launch in beta next Monday? For one, the ads are only for other apps. An ad will appear at the top of iOS App Store search results, and will be identified as a search ad, showing a light blue background with a blue ad button on it. Only one ad will appear at a time (or none at all).
For marketers, Apple will provide a second-price auction system, borrowing technology from Apple’s soon-to-be-shuttered iAd network, and developers don’t pay unless users click. All of this, Apple says, is a fair system for developers.
The second-price auction should reduce the tendency for well-funded companies to bid high prices on keywords, thereby making them uncompetitive and locking out smaller developers. I worry that it won’t do enough, but that’s something that will have to be seen when the feature is first tested on Monday — Apple is promising to keep an eye on it this summer.
There’s a lot to unpack with this announcement, and much of it will have to unfold over time. As best as I can tell, Schiller didn’t address improvements to the quality of search results, and I hope we’ll hear more about that during the keynote. But if this is what had to be bumped to make way for more media-friendly stuff, I am very much looking forward to Monday.
Update: By “Mac OS X”, I clearly meant “MacOS”.
Also, one thing I spotted in this announcement is the introduction of a “Share” option to the 3D Touch menu of third-party apps on the home screen. I sincerely hope that’s not just an additional item in every third-party app’s 3D Touch menu, because that will get pretty gross pretty fast.
Steve Moser reminded me on Twitter today that home screen icons have only one “level” of 3D Touch; there’s no distinction between different amounts of pressure. Perhaps that plays into offering the Share menu somehow?
It probably keeps out the riff-raff, though. ↩︎