Why you don’t need In-app Purchases in your MobiLoud app

For many years now Apple and Google have both imposed the use of in-app purchases for apps available in their app stores. This means that app developers, startups, and site publishers with a mobile app must use in-app purchases as a way to charge for in-app content or functionality.

This has been met with lots of criticism, especially in recent years, from small developers and large web companies alike. Both complain it is too difficult to use in-app purchases alongside other payment methods and that it limits how they can monetize their apps. On top of that, clearly, everyone is tired of paying Apple and Google 15-30% of their revenue – for companies that have an existing web presence, it’s hard to argue in-app purchase is a better user experience. It’s usually a hassle for the companies and the users!

If you’re selling digital content or functionality in your app e.g. unlocking premium articles, courses, or parts of your app, there’s no way around it. To sell in your app, you must use in-app purchase.

You can’t use Paypal, Stripe or any other payment processor to directly sell access to your app’s content. Even if that’s what you’re doing on your website and the only method your website or platform supports.

If you’re using our News platform for WordPress content sites and digital magazines, we do support in-app purchase and can make it part of your app’s experience. Consider this though as a way to unlock premium content for mobile app users, and not a way to sell them access to the website and other membership benefits. If you accept the downside of having two types of subscribers – app subscribers and site subscribers – then this can work quite simply and provide additional revenue directly generated by the app.

In the context of a MobiLoud mobile app, so a mobile app that leverages your website or web app for its content and functionality, there’s a few solutions or workarounds in this situation, though none allows you to sell content within your mobile app:

  1. Offer users only the option to log in to access an existing content and what they’ve purchased. All purchases will need to happen outside the app.
  1. Allow free user registrations and offer free content and functionality. Lock down premium features and content without the ability to purchase in the app. Contact users outside of the app to upsell them to a subscription. This has only recently been allowed by Apple.
  1. Don’t sell inside the app, sell the app. That means making your app a paid application, with a one-time fee, offering access to all (or a subset) of your premium features or content. This is straightforward on the app-side of things and is much simpler to manage compared to subscriptions. It’s not recurring, but one-time app sales could be a nice addition to your revenue streams, if compatible with your business model. The only difficulty might be for you to create an alternative view for app users that gives users access to premium content – this is something you should build on your site, we can provide more guidance if needed.

For Apple to accept the solution 1 and 2 above, your app needs to be considered a “reader” app. That’s an app that displays outside content on iOS devices, like videos, music, magazines, newspapers, and books that have been previously purchased.

If you have already subscribed to a service like Netflix or Spotify, then you can use their app on your iPhone and enjoy your premium content. But you won’t be able to subscribe to either service directly from the app.

This might sound very inconvenient, and it is. You might think you’d want to find a solution allowing you to sell content or functionality in your app using in-app purchase alongside direct sales on your website, but here’s a few reasons why we think you really shouldn’t.

Why you don’t want to sell on your website AND with in-app purchase in your app

  1. If you have both a site and a mobile app (like all MobiLoud customers), selling on the web and in the app using in-app purchases would create a lot of extra complexity you don’t want. It’s not just the app that should integrate with Apple and Google, your website platform should integrate with Google and Apple to validate subscriptions and handle cancellations correctly (e.g. what happens when an Apple subscriber cancels your subscription with Apple? The information needs to be updated on your site’s database…) – this means a lot of additional investment for almost no return.
  1. In addition to what it would cost to integrate Apple and Google in-app purchases, you’ll also pay a 15-30% fee to Apple and Google for the privilege. So the economics will always be better on the web. It keeps getting harder and harder to justify investing in supporting in-app purchase payment methods on top of what you’re already using on the web.
  1. This is not something specific to MobiLoud or MobiLoud. It would be the same with any other platform or service you’d use or if you built an app with an agency.
  1. Even if a competing app platform offers in-app purchase and it works out of the box with your back-end (unlikely), using in-app purchases would still be a lot of extra complexity your business really doesn’t need. Think about having to deal with subscribers on three different platforms (Web e.g. Stripe, Google, Apple…). That alone sounds like a situation a small business should avoid.
  1. Adding to that, you’ll have zero visibility into customer data and subscriptions with Apple and Google, making supporting your users with billing issues a real nightmare. It doesn’t look like Stripe. Apple doesn’t let you search by customer name and handle a customer’s subscription. The only information they share is a token (imagine a number) representing a transaction. Your systems need to tie that information to your user and subscription records.

Your app is about engagement and retention

This is not necessarily as bad as it sounds. Your mobile app could help with user/customer acquisition, but the main function it serves is to provide convenience to your users/students/readers when consuming your content or making use of what you’ve built – ideally after they’ve purchased with you.

Your mobile app will keep people engaged, returning to the content, and getting value from it and so helps you improve retention, course completion rates, engagement rates, return traffic, etc.

Ultimately, you’ll have a simpler, better business if you focus on selling on the web and use your mobile app as an additional benefit for users/subscribers and a tool to grow engagement and retention.

Things might change in the future

Things will change in coming years, mostly through litigation and pressure from large web companies like Netflix and Spotify and gamig companies. It’s possible Apple will eventually be forced to allow payment systems different from their in-app purchase system. They might still impose a fee, but at least on the technical front it might soon be possible to charge users using the same payment methods and user flows you’re using on the web.

Overall, in most cases, a mobile app is valuable even without the ability to sell subscriptions and content within the application. After all, the workarounds listed above are the same used by Netflix, Spotify, Kindle and hundreds of other big web brands. The app provides a reader or companion experience to the site, gives access to the content and convenience, but it’s not a storefront.

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