What's Happening?
Substack, a newsletter subscription platform, is leveraging a recent change in the U.S. App Store rules to allow users to make purchases outside of Apple's in-app purchasing system. This change follows the Epic Games antitrust lawsuit against Apple, which led to the modification of App Store policies in May. Substack's new payment option allows consumers to access reduced pricing by bypassing Apple's commission fees on web sales. Substack creators can now offer readers the choice between Apple's in-app payment system and the web payment option, which is accessible without leaving the app. The platform will automatically adjust iOS app prices to account for Apple's fees, ensuring creators receive the same revenue as from web subscriptions. Substack continues to take a 10% fee from web subscription prices. The company is also providing migration tools to help creators access billing information for Apple-managed subscriptions if they leave the platform. Over 30,000 publications on Substack have in-app purchases enabled, and early tests of the new payment options have reportedly increased paid sign-ups.
Why It's Important?
The introduction of web-based subscription options on iOS by Substack is significant for both the company and its users. For Substack, this move reduces dependency on Apple's in-app purchasing system, allowing it to avoid the commission fees imposed by Apple, which can be substantial. This change could lead to increased revenue for Substack and its creators, as they can offer more competitive pricing to consumers. For users, the ability to choose between payment systems provides flexibility and potential cost savings. This development reflects a broader trend in the tech industry where companies seek to circumvent platform fees imposed by major app stores, thereby enhancing their financial autonomy. The change could influence other app developers to adopt similar strategies, potentially reshaping the app economy and challenging the dominance of app store operators like Apple.
What's Next?
Substack's public launch of the external payments option will initially impact new subscriptions, with creators having the option to adjust prices for those using Apple's payment system. While the changes currently affect the U.S. market, Substack is evaluating whether to implement similar strategies in the EU and U.K., where Apple offers more complex rules for developers wishing to bypass in-app purchases. The success of this initiative could prompt Substack to expand its payment options globally, potentially influencing other platforms to follow suit. Stakeholders, including app developers and consumers, will likely monitor the impact of these changes on subscription models and pricing strategies.
