Apple’s Price Increase Impact on Newsstand Publishers

Apple announced that they were raising prices in a number of countries, including Canada, Sweden, Denmark and the UK, on Tuesday. The move is being made by Apple to account for adjustments in the value-added tax (VAT) and foreign exchange rates.

iTunes Connect Email

Here’s how this affects Newsstand publishers: In iTunes Connect, pricing is defined by the selected tier, which is in parity with U.S. subscription pricing on the digital channels. When you select the $19.99 tier, the currency conversion is automatically applied.

You also specify whether an in-app purchase is a one-time buy or subscription. You then set the terms of the recurrence of that subscription — i.e. monthly, annually, etc. If you want to lower the subscription cost of that in-app bundle, everything’s fine. It’s when you raise the pricing tier that all of those recurring subscriptions break. It’s the way Apple’s system handles the scenarios. It’s likely a means of looking out for the consumer.

Let me be clear here: News organizations are not raising subscription pricing. Even though Apple is making the change on their end, these International subscriptions are going to break. It’s not fair to these users. That’s just how Apple’s A/R capabilities handle this.

Subscriptions won’t break all at once; instead they’ll end when the user’s billing term does. For example, for users with a monthly subscription, the full impact will have taken place at the end of 28 days from Thursday. That’s when Apple made the change official, around 3 p.m. ET.

The email users will receive to notify them that their subscription has been cancelled will come from Apple, but will just cite a price increase as the reason. While all publishers are affected by this, there will be those who think the news organizations are the ones raising prices.

The downside to all of this are the limitations in the communication that can be made with current subscribers. Apple doesn’t allow registration upon purchase in-app, so there’s a lack of contact info for everyone who is impacted.

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