Apple App Store Will Change Revenue Sharing Rules

Apple Inc. (NASDAQ: AAPL)’s Worldwide Developers Conference will take place next week in San Francisco.The tech behemoth uses this event to preview new software. On this occasion, the company will also present its news revenue sharing scheme and other plans for its App Store aimed at incentivizing developers.

Apple’s senior vice president of worldwide marketing, Phil Schiller, had a chat with The Verge and shared some of the company’s plans for the App Store.

The well-known revenue-share model that awards developers 70 percent of sales, while Apple keeps the remaining 30 percent, will remain in place. However, developers will receive 85 percent of sales from customers with subscriptions of more than one year old. What the company expects to generate is an incentive for developers to sell their apps for recurring fees instead of one-time payments, while, at the same time, creating a new revenue stream for the company, which seems concerned about slowing iPhone sales.

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Another big change will be related to who can sell subscriptions. Instead of limiting the types of apps that can do this, Apple will soon allow all developers to offer subscriptions. Of course, adding games to the mix will have a large impact on results.

One final change will be introduced in the App Store, Schiller said. The iOS App Store will start including search ads for apps. "We’ve thought about how to carefully do it in a way that, first and foremost, customers will be happy with,” the SVP added, explaining that the ad auction system they intend to use will be "fair to developers, and fair for indie developers, too."