Apple has announced a new contingent pricing feature on its App Store. It allows app developers to offer discounted prices to their subscribers based on certain criteria. The company says this new pricing system will help developers to retain and attract new subscriptions.
Apple is currently testing the contingent pricing system under a pilot program. In its official blog, the company has also encouraged app developers to strategize their subscription prices by utilizing this new pricing feature.
Contingent Pricing on App Store To Drive Competition
According to Apple’s announcement, contingent pricing will allow users to avail of a discount on a subscription, as long as they remain subscribed to another specific subscription. Let’s understand this from an example.
Consider that a user is a subscriber of ‘Service A’. If there’s a ‘Service B’ with a subscription cost of Rs 500, the user can get this subscription for Rs 400 if they remain subscribed to Service A. The exact discount can be decided by the app developer.
Apple also says that both the services can either be from the same developer, or even from different developers. This provides developers the opportunity to offer discounts to users across their own apps or attract a new subscriber from their competitor.
This contingent pricing system is currently being tested with a small set of developers. Apple says that interested app developers can start planning their strategy for this new pricing system so that they can sign up for it as soon as it’s made available to all developers.
Apple will announce more details on contingent pricing in January next year. However, the company has not provided a timeline for the exact rollout of this new feature to the general public. We can expect it to appear on the App Store within the first half of 2024.
30% Commission Is Here to Stay
While the contingent pricing system is beneficial for app developers to attract and retain new paying subscribers, it still does not address their biggest complaint of Apple’s high commission fees for every in-app purchase on the App Store.
Developers will have to continue paying Apple a 30% commission on each purchase, even if they are made through contingent pricing. Instead of reducing its commission rates, Apple is introducing a new pricing system to attract additional subscribers to developers, which will help both Apple and the developer.
However, Apple will have to offer some kind of third-party app sideloading by March 2024 to comply with the regulations of the European Union. This will allow app developers to offer payment gateways outside of the App Store, preventing paying a huge commission to Apple.
Apple has been relatively silent on the implementation of third-party app stores. Instead, the company is opposing the idea citing it as a security and privacy threat for its users.
