Apple App Store Revenue: Keep a Bigger Piece of the Pie with Web-Based Purchases

Many of Headway’s clients are entrepreneurs bootstrapping a passion project or a new startup that just closed their first seed round. In either case, money in the early days is tight. That’s why we put together this guide to help navigate what will pass muster during an App Store Review so you can get the most out of the revenue generated with your iOS products.

6 min
June 1, 2018
Jon Kinney
Partner & CTO

Alternative purchase considerations for apps on iOS

Note: this article will be frequently updated as Apple changes their App Store Review Guidelines on a regular basis. Last Updated: June 4th, 2018.

Many of Headway’s clients are entrepreneurs bootstrapping a passion project or a new startup that just closed their first seed round. In either case, money in the early days is tight. That’s why we put together this guide to help navigate what will pass muster during an App Store Review so you can get the most out of the revenue generated with your iOS products.

Understanding the ways Apple allows you to monetize purchases for your product

Below is a link to Apple’s published App Store Review Guidelines. These guidelines outline what Apple will and won’t let fly on their platform.

App Store Review Guidelines - Apple Developer

Content-based reader apps

3.1.3(a) “Reader” Apps: Apps may allow a user to access previously purchased content or content subscriptions (specifically: magazines, newspapers, books, audio, music, video, access to professional databases, VoIP, cloud storage, and approved services such as classroom management apps), provided that you agree not to directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods are not designed to discourage use of in-app purchase.

What does this really mean?

  • You can’t link out to your marketing site from within the app to direct the user down a path to purchase. The flow can however be the other way. From your marketing site, get the user to sign up on the web, then direct them to download the app on their phone and login.
  • It’s also possible to allow users to sign up directly on the app and get access through a content code (linking them to a team/group that already has a subscription). But this can only be for previously purchased content. See “Using Codes to Unlock Content” below.
  • The “reader” provision is only technically valid if you have the same content available on the web for the user to login and see. The fidelity and interactivity of this content, however, is not specified. So our approach has been to allow the user to login and see a big list of posts/videos/etc. that they are working to access/unlock/view on the mobile phone through a more targeted workflow. You don’t have to advertise that the content is available on the web, but it likely does need to be there if/when a person logs in.

Good examples of this are:

  • Netflix
  • Amazon Prime Video
  • MyFitnessPal
  • LinkedIn Premium
  • Nest
  • Trello

Using codes to unlock content

3.1.1 In-App Purchase: If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.

What does this really mean?

  • Unlocking a subscription via a code without in-app purchasing is a non-starter. However, we have had success with passing App Store review when we use a custom code to associate a user to a team (in a sports context, but would work with a more generic “group”, as well). Apple will likely question this, but if you can prove that the content code isn’t facilitating the purchase to unlock content directly, and is just associating the user to the proper group/team to access already purchased content, then you’re fine to run under the provisions of the “Reader” app clause.

Purchasing goods or services consumed outside of the app

3.1.5 (a) Goods and Services Outside of the App: If your app enables people to purchase goods or services that will be consumed outside of the app, you must use purchase methods other than in-app purchase to collect those payments, such as Apple Pay or traditional credit card entry.*

What does this really mean?

  • Uber and TaskRabbit are good examples.
  • Here’s some points of clarification from the Apple Developer Forums:
  • The service in those sections is the product. Payment systems are the billing means.
  • External service example*: actual dog walking….puppy gets killed in a fight with a street car and loses. Apple can’t be involved in a customer dispute they have no control over or responsibility for.
  • Inside the app example*: virtual dog walking tracking app - if Apple approves a location aware app that lets the user see where their walker and pet are on a map, and those results are found to be less reliable than promised, Apple is involved, whether the puppy wins a round with the street car or not.
  • Billing outside the app example*: Credit card
  • Billing inside the app:* IAP
  • You can’t bill outside for products consumed inside. You can’t bill inside for products consumed outside.
  • We’ve used this provision with the added complexity of a two-sided marketplace by splitting the app into two separate installs, one for the consumer, and one for the provider. This basically turned the consumer app into a booking platform like a spa would use where the purchase happens through Stripe (or another 3rd party payment processor, or ApplePay), and the service is performed outside the app.

In this context, the service was performed in a separate app, but outside the app taking payment nevertheless. However, we were still purchasing digital content, so the content couldn’t be accessed directly in the app where the purchase was made or it would violate these terms. The content in this case, an audio recording, was intended to be used outside the context of the purchasing app (typically by being sent as a gift audio message via text), but even so, offering playback of the original content inside the app was determined to be too close to violating Apple’s terms.

One real-world example of this two app model is Uber + Uber Driver.

Startup tips to make the Apple app store review process easier

  • Provide good App Store details and metadata. From Apple’s Terms:
  • There are many ways to monetize your app on the App Store. If your business model isn’t obvious, make sure to explain in its metadata and App Review notes. If we can’t understand how your app works or your in-app purchases aren’t immediately obvious, it will delay your review and may trigger a rejection.
  • Add good images to highlight your app’s functionality.
  • Don’t check the “available on iPad” checkbox unless you want to be locked into making the app work on iPad for the life of the app.
  • In general, App Store Reviews aren’t 100% consistent as they’re done by a group of humans. Something that works today might get flagged in the future.

Not sure which business model is best for your product?

There are a lot of options out there for startups to choose from when designing and building a product. Our Compass process will help you gain a better understanding of your market, improve your product experience, and choose the best business model for you. Contact us today to see how we can get you moving forward with a personalized plan for your product.

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