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Apple will soon give publishers another way to offer subscriptions to readers who use apps to read newspapers and magazines on their iPhones and iPads. The company announced last week the upcoming release of “deal codes” that publishers can create for a variety of promotional efforts.
Codes are a sequence of digits that readers use to unlock offers, such as discounted prices on app subscriptions or free access to an app for a limited period. Publishers can generate up to 150,000 codes per quarter for each application they have in the Apple App Store and use them in a variety of ways.
For example, a publisher could generate a batch of codes and send them in email offers to readers, or print them on gift cards to give to attendees at live events. Publishers may test the response to their promotional efforts by generating different one-time codes for different campaigns.
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The main drawback to app subscriptions is the high fee Apple charges for transactions processed through the App Store. The company charges a 30% commission in the first year of an app-based subscription and 15% one year after.
Publishers must decide whether these fees are worth accepting for the sake of giving readers an in-app experience rather than directing them to the mobile web, where they don’t have to pay “Apple tax.”
For example, The Wall Street JournalThe app on my iPhone currently offers digital access for about $ 37 a month after trying the app for $ 1 for the first month. Apple reportedly collects nearly a third of that payment to help cover the running costs of the App Store.
When i visit the WSJOn the mobile website, I see an offer of $ 19.50 a month after paying $ 1 for the first two months, or about half the price of the app subscription. The newspaper would charge about $ 20 a month from my web or App Store subscription for the first year, according to my estimate.
Apple’s fee structure has become a contentious issue for publishers, who don’t have much incentive to drive readers to the App Store and make them pay a higher price for a subscription. Last month, Digital Content Next, a trade group representing publishers like The New York Times and
The Washington Post, asked Apple to lower those fees to publishers to match a deal it had offered to Amazon.
Publishers are also concerned about Apple’s plan to require apps to get acceptance consent to track the online activities of people using their devices. The upcoming change in software running devices like the iPhone and iPad is likely to limit publishers’ ability to sell targeted advertising.
It’s too early to tell if Apple’s offer codes will help publishers get subscriptions to their apps. Instead, publishers are more likely to direct readers to their mobile sites, where they maintain a higher share of digital reader revenue that has become more significant for publishers facing declining ad sales.
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