Apple backs away: Subscriptions outside the App Store are now OK

Whoa, Apple has reconsidered its stance on in-app subscriptions and has changed strict guidelines of its iOS developer agreement to allow in-app subscriptions outside the App Store. MacRumors spotted a crucial change in section 11.13 which previously required that content sold outside of the app be “also offered in the app using In-App Purchase at the same price or less than it is offered outside the app”. This requirement, which applied to both purchased content and subscriptions, is no longer in effect and has been entirely removed from section 11.13. Here’s the new wording:

Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.

Put simply, prices no longer need to be identical outside the App Store, although publishers are still barred from providing links or buttons that lead to external pages where subscriptions are being offered. In all, that’s good news for the likes of Hulu, Amazon, Netflix, eBay and other companies which rely on content subscriptions. On the downside, it’s a little late for e-books publishers like BeamIt Down Software which closed down the shop, arguing it couldn’t sell books at a loss due to Apple’s 30 percent cut on iOS subscriptions. Anyway, Apple may have just dodged an anti-trust lawsuit.

That Apple is now reverting the rules of the game comes as little consolation to a five-people team of BeamIt Down Software who have invested over $1 million in cash and spent nearly eighteen months developing the iFlow Reader app. The company ceased operations on May 31 and is no longer providing support or updates for the reader app. “They screwed us”, BeamItDown Software’s Philip Huber told Fortune. Perhaps they could now make their case in court and seek damages over lost profits? Apple launched iOS subscriptions with NewsCorp’s iPad-exclusive digital newspaper, The Daily, causing divide among big magazine and newspaper publishers.

Some, like Hearst and Bloomberg Businessweek bent over to Apple and its strict iOS subscriptions requirements that were to go into effect as of June 30. Others prominent publishers like Time, Inc. have refused to offer iPad magazines with in-app subscriptions altogether unless Apple comes to its senses. Forward-thinking publications like Fortune and Financial Times have snubbed iOS subscriptions with HTML-based web apps. With Apple’s change in stance and iOS 5 Newsstand (pitched as the iBooks for digital magazines and newspapers), publishers and Apple finally find themselves on the same page.