Apple has announced the pilot of “Contingent Pricing,” a feature that enables developers to offer discounted subscription prices to customers who are already subscribed to other services. This innovative approach, which caters to both developers and subscribers, marks a significant shift in the App Store’s subscription model. The change is set to provide enhanced value, improved convenience, and a more user-friendly subscription process within the App Store ecosystem.

Developers wishing to participate in the pilot can sign up in their Apple App Developer portal to participate.

For Developers: Enhanced Revenue and Marketing Opportunities

• Cross-Promotion of Apps: Developers with a range of apps can now incentivize users to explore more of their offerings. By bundling subscriptions at a discounted rate, they can potentially increase their total revenue from each customer.
  
  
• Collaborations Between Developers: Contingent pricing opens up collaborative opportunities. By offering discounts on combined subscriptions, developers can expand their market reach and revenue through partnerships.
  
  
• Attracting Price-Sensitive Users: The lower pricing for bundled subscriptions is a strategic move to attract users who might hesitate at higher prices, potentially leading to a broader subscriber base.

• Enhancing Value Proposition: Discounts for maintaining subscriptions can significantly improve a developer’s value proposition, encouraging longer subscription commitments from users.
  
  
• Reducing Churn Rate: The contingent pricing strategy is designed to lower subscription cancellation rates. Bundled offers at discounted rates make users less inclined to unsubscribe.
  
  
• Boosting Customer Loyalty: When users invest in multiple services from a single developer or a group, their engagement and loyalty to these services tend to increase.
  
  

Indie Developers: A Boon in a Crowded Market

For independent developers, contingent pricing is a game-changer. This model allows them to leverage their portfolio more effectively and stand out in a highly competitive marketplace. Apple’s support in managing the complexities of eligibility checks and transaction processing alleviates a significant operational burden, allowing all developers to focus more on innovation and less on administrative logistics.

INSIDER TAKE:

Apple’s introduction and piloting of contingent pricing is seen as a strategic response to the increased scrutiny of its App Store policies, particularly with the upcoming EU Digital Markets Act. By introducing more flexible pricing options, Apple is not only addressing regulatory challenges but also enhancing the App Store’s appeal amidst the rise of alternative app distribution channels.

This move also aligns with a broader industry trend towards more personalized and flexible subscription models. As consumers become increasingly selective about their digital subscriptions, tailored pricing options are likely to play a critical role in attracting and retaining subscribers. We certainly expect this trend to gather momentum, with other players in the market likely following suit.