Apple making major changes to the App Store, including search ads and more

Apple is making significant changes to its App Store including the addition of search advertisements and a revamp to the developer subscription model. Ahead of the company’s WWDC conference, Phil Schiller, Apple’s senior vice president of worldwide marketing – in an interview with The Verge – has detailed several modifications that will be applied to the App Store starting next week.

Apple will be making several changes to its subscription model for developers. For years, the subscription model has confined developers to a consistent 70/30 split, with 30% of the revenue going to the company. Now, Apple is restructuring this model stating that if a developer is able to maintain a subscription with a customer for one year, the company’s cut in it will drop down to 15%. The new model, also referred to as “Subscriptions 2.0”, will apply to games as well. It will start rolling out to developers this fall, however, app makers who have retained customer subscriptions for over a year can take advantage of the revenue split starting June 13th. Schiller went on to say:

Now we’re going to open up to all categories, and that includes games, which is a huge category. […] The developers who do have access to the subscriptions have been very happy with them. The system works really cleanly and nicely.

According to Recode, Google has also updated its subscription model, allowing developers an 85% cut in revenue from day one instead of having to retain customers for 12 months to be eligible for the increased share. However, the timeframe for the rollout of this revamped model has not been announced as of yet.

Schiller detailed how Apple is also considering the changes in the subscription model from the consumer’s point of view. This includes scenarios where developers who had previously published their apps as a premium one-time purchase only, now shift to Subscriptions 2.0, or decide to raise the subscription cost. In such situations, Apple will notify users, allowing them to opt out out of the subscription model. If no action is taken on behalf of the user, the subscription will be automatically terminated instead of being extended.

However, the executive refused to comment on the ability to offer free app trials and paid updates, stating that the company “looks at everything. We evaluate what will be a better experience for the user, and we make choices based on that.”

Apple has announced that it has been improving and reducing the review time for apps submitted to the App Store as well. Up to 50% of the apps are reviewed for publication within the first 24 hours and 90% are reviewed within 48 hours.

Another significant and somewhat controversial change that Apple is making to the App Store is the addition of search advertisements to promote apps. Starting next Monday, when customers search the App Store, they might notice adverts showing up in the search results. These ads will be marked as such and will be displayed with a blue background in order to differentiate them from organic search results.

However, Apple has also placed some restrictions on these ads, stating that they won’t be shown to minors (users who are 13 years old or younger), no more than one ad (or none at all) will be visible in a single search, and they will be “relevant to what the user searched for”. Additionally, the company has also stated that the company won’t share user data with developers, and users will have the ability to opt out of data and location tracking.

Users will also be able to better utilize the 3D touch feature, allowing them to “hard-press” on an app and share it as a recommendation with friends. Similarly, in an effort to improve app visibility for developers, the “Categories” tab will be making a return to the App Store; however, apps which a user has already downloaded will be filtered out of the “Featured” tab.

Most of these changes will be making their way to both users and developers starting next Monday and the company will likely shed more light on these changes at its upcoming WWDC conference. It will be quite interesting to see how developers and users respond to this restructuring of the App Store over the next few weeks.

2 Comments

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