Selling Subscription Apps through Apple

1. Selling Subscription Apps through Apple 3 Case Study Examples, Best Practices and Step-by-Step Instructions

2. Table of Contents • Why Sell Apps? • 3 Case Study Examples • Apple’s Terms • Best Practice: Sell through Your Website • Selling through Apple: Step-by-Step Instructions • Trial Offers + Bonus Time • More Resources

3. Why Sell Apps?

4. “On the one hand, information wants to be expensive,because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.” Stewart Brand, creator of the Whole Earth Catalog, to Steve Wozniak at the original Hackers' Conference in 1984. Tablets and mobile apps put information in customers’ hands at exactly the right time. And consumers are willing to pay for this convenience.

5. Mobile Market Majority of mobile opens in iPhone Tablet Market Other 7% Andriod 41% • Apple dominates 52% of tablet market via iPad (although this number decreased from 82% in 2011) iOS52%

6. One Third of U.S. Adults Get News by Phone or Tablet On a scale of 1 to 10, iPad users rated their overall satisfaction, on average, at an 8.8

7. $$$ - What You Can Expect to Make The Guardian (despite poor paywall practice and a lengthy 3-month trial with a 2% conversion rate) is estimated to make around £118,830 per month, or £1.4 million ($2.1 million) per year from its iPad app. According to app analytics firm Distimo, the top 100 grossing apps in that section of the iPad Store are reaping about $70,000 a day, collectively. See the ‘Future’ Case Study Example for more revenue numbers

8. iPad Users Tend to Be: • Male (52.9%) • Have incomes over $100,000 (46.3%) • Under the age of 35 (44.5%) • iPad owners tend to buy based on brand (while Kindle Fire owners buy based on price). Source: “People love tablets, iPadsespecially,” published by the Online Publishers Association: http://www.online-publishers.org/index.php/opa_news/ir_standalone/people_love_tablets_ipads_especially

9. 3 Case Study Examples

10. Case Study: Future Magazine • Future also launched three new weekly tablet titles: • Gathered, a spin-off of its print monthly Mollie Makes, a craft magazine. • Photography Week, a spin-off of its monthly PhotoPlus magazine. • CyclingNews HD, a spin-off from its CyclingNews website and Cycling Plus magazine Future built an in-house production software called FutureFolio to design its interactive tablet magazines. It is now licensing the software to other publishers

11. Case Study: National Geographic Over 1 million downloads of its World Atlas App, priced at $1.99 468,000 downloads of “7 Billion” App, priced at $4.99 Sells apps through your Website! More later on why this is a best practice that will increase your revenues!

12. Case Study: Roadway Magazine • UK publication is rated 7 out of 169 in the automotive category of the Apple Newsstand • Attributes success to two-week ad campaign on Facebookthat doubled downloads & purchases. “[We] targeted English speaking nations, right hand drive markets (some parts of Asia), the BRIC nations and most of Western Europe. Targeting was iPad or iPhone users, who are small business owners, plus anyone who has stated they work or are interested in Trucks, Haulage, Logistics, Warehousing, etc…. Facebook gives you a massive range of options. “ Peter Shakespeare Head of Publications at Road Haulage Association via the Specialist Media Show discussion group on LinkedIn

13. Apple’s Terms

14. Apple’s Terms for Publishers • Auto-renewal subs are for iOS content-based apps in App store (i.e., through iTunes Connect) • You can set the price and length of subscriptions that you wish to make available (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly) Nothing over 1 year. • Apple takes 30% of revenues • Billed to customer’s card associated with iTunes account

15. Apple’s Terms for Publishers (cont’d) • Apple will send welcome and renewal emails about app. (See slide 30) • You canoffer a free trial • Can offer “Marketing Opt-In,” which gets you more customer data. In return, customer gets “bonus free time” with app. (See slide 35) • Customer can cancel through iTunes Customer Support (not on their own).

16. Best Practice: Sell through Your Website!

17. To Keep 100% of Your Revenues… • You can sell digital subscriptions on your website or provide free access to content for existing subscribers. Apple will not take 30% of your revenues then. • HOWEVER: The same (or better) subscription price must be offered inside the app as on the website. • And you may notprovide links in your apps that allow the customer to purchase content or subscriptions outside of the app.

18. Lastly, you must be able to handle app authorization and customer tracking on your own. National Geographic sells its iPhone/iPad apps on its website. That allows the site to collect 100% of revenues and bundle the offer with Kindle access for one low price!

19. Strategy+Business also uses this tactic, advertising their digital package through a homepage overlay.

20. Selling through Apple Step-by-Step Instructions

21. Apple’s Many Faces… • Publishers can sell apps for the iPhone or iPad. • iPhone apps are sold through the App Store. • iPad apps are sold through Apple’s Newsstand. • However, all apps eventually are sold through iTunes Connect, Apple’s platform for customer management. Why? When Apple launched iTunes, many customers linked a credit card to it. As Apple allowed other content creators to sell content, it continued to link sales to the iTunes platform, now called iTunes Connect.

22. Branding Your App • The most important information you’ll enter is the Display Name (aka “In-App Purchase Display Name”) and the Publication Name.

23. If you do it right… Proper display name listed when user buys subscription within app Proper publication name listed when “Marketing Opt-In” requests more info.

24. If you do it wrong… Wrong Display Name Entered Wrong Publication Name Entered

25. Also… • Don’t put your subscription length in your display or publication name

26. URLs for Privacy Policy and Support If your Support URL is a dead link, your app will be rejected by Apple. The Privacy Policy URL is required for auto-renew subscriptions.

27. But a Good URL Can Help You… The Support URL provides a nice way to get more customer information from app subscribers. See our Case Study on Strategy+Business for more on this technique. (But don’t copy their form page!)

28. WARNING Apps are downloadable software. Therefore, most subscription apps are listed as “free” in the iTunes Store. Customers then buy the subscription “through the app.” This is a serious downfall in marketing your app, and why we recommend selling your apps through your own website, if you have the tech support to do so(see slide 16).

29. Pricing • You can set pricing. • You can change pricing. • HOWEVER, if you change pricing, auto-renew will be turned off for subscribers and they will have to opt back-in to auto-renew. Individual subscribers are alerted within 10 days of their renewal date about the price change. There is no email blast to all subscribers. • You cannothave different pricing depending on when subscribers were acquired. • Price decreasesdo not trigger email.

30. How Apple Communicates with Customers • Customers get welcome email with “Purchase Confirmation” as subject line. This email introduces the subscription, has privacy policy info, and where subscriber can go to turn auto-renew on or off. • Apple groups renewalremindersfor all apps expiring/renewing within the same timeframe (e.g., renewal reminder for monthly subs for two different companies are included in the same email).

31. Payment Processing • Within 10 days of expiration, Apple tries credit card to make sure there are no payment issues. Apple sends an email if it looks like customer’s card is about to expire, or if they tried to buy a song and card was declined. • If a card fails 24 hours before expiration, Apple will try it again, up to 6 times in an 8 hour window (but no definite practice).

32. Payment Processing • After expiration date, Apple may try card again, but not for long. • After expiration, customer alerted to subscribe again when opening app. But s/he will not be able to access content that was released during gap (like news), unless its on-demand content, (like video). Bottom Line: Apple’s expiration procedure will protect your paywall, but likely tax your Customer Service department as expired subscribers call asking for re-instatement and access to content they missed.

33. Trial Offers + Bonus Time

34. Trial Offers • You can offer FREE trials through your app (sorry, no paid trials, which is a best practice). • Only allowed for Newsstand/iPad apps • Period configured by youin iTunes Connect • Auto-renew by default and charged automatically Keep in Mind: Only a third of apps are still used 90 days after download:

35. Marketing Opt-In In addition to a free trial, you can cue a “Marketing Opt-In” to get more information from your subscribers. Customers choose togive Apple permissionto share their name, email address and zipcode with you.

36. “Bonus Time” The reward for customers for opting to share their info is free bonus time in your app without paying. Expiration Renewal Renewal Initial Purchase Bonus Extension

37. Bonus Time • You can set the “bonus time” limit • If a customer agrees to share info at sign-up, the bonus time is added before the first charge, in addition to any free trial you have. Renewal First Charge Expiration Free Trial Bonus Extension

38. More Resources

39. More Resources • CHECKLIST: Marketing and Selling iPad Apps • ON-DEMAND: Subscription App Publishers Reveal Sales Secrets • HOW-TO: Optimizing Mobile Sites and Apps for Paid Content -- 4 Options, 3 Steps and 10 Design Tips • CASE STUDY: How Fastcase Beats Huge Competitors with an iPhone App & Nimbler Search • CASE STUDY: Strategy+Business Turns Free Web Content into Revenue-Generating Apps • ARTICLE DIGEST: Magazine iPad & iPhone App Pricing: Most Under $5