Hulu drops subscription button from iPad app, more apps could do same

by Phil Hornshaw

It’s a mere nine days before Apple’s subscription rules kick in for content-providing iOS apps in the iTunes App Store, and among those to acquiesce to Apple’s guidelines is streaming video app, Hulu.

Those subscription rules bar Hulu from posting a link on the front page of the app that directs users to Hulu.com in order to purchase a monthly subscription to Hulu Plus. Apple’s (AAPL) subscription rules say that any app directing users to an outside site to purchase subscription content will be banned from the App Store. If Hulu wants to sell subscriptions through its app, it has to do so through in-app purchases – with Apple getting a cut of 30 percent with each subscription sold.

So, in order to avoid giving away that cut, Hulu has decided against going the in-app purchase route, and that has cost it the ability to sell subscriptions at all through its iOS apps. Hulu’s link to the subscriptions online has been removed from its app, according to All Things Digital. That’s certainly a bummer for Hulu, but it could be worse – Apple could have demanded Hulu sell subscriptions through in-app purchases, or refuse Hulu’s app entirely.

That’s what the original subscription rules said back in February when Apple first rolled them out. Originally, any developers that sold content that could be accessed by their iOS apps had to make that content available through in-app purchases, with Apple getting its 30 percent, if they wanted to offer those apps in the App Store. What’s more, Apple’s rules stated that subscriptions sold through its App Store had to be offered at an equal or lower price to the subscription available anyplace else. Basically, Apple wanted to force developers to sell content through the App Store and to make sure it was the most desirable way for users to purchase that content.

A lot of developers were annoyed (and some even infuriated) by the rules, and a few even pulled their apps from the App Store altogether in protest. Then, earlier this month, with the June 30 deadline approaching for developers to bring their apps in line with the subscription rules, Apple relented. They altered the rules to do away with the low-price edict and the requirement that all subscriptions be available through in-app purchases; instead, Apple’s new rules basically limit developers from offering alternatives to in-app purchases in apps. If you want to sell subscriptions through apps, then Apple gets a cut. That seems like a fair compromise.

As Hulu goes, so will lots of other apps in the next week, it seems. Apps such as Pandora (P) and Rhapsody, which distribute music, and Netflix (NFLX), another streaming video app, will be stripping-out links to subscriptions if they want to stay in the App Store. Other content providers, like some newspapers and magazines, have already gone forward with adding in-app purchases to their setups.

But one of the big apps to watch is Amazon’s Kindle app, as well as other e-book sellers. Amazon (AMZN) sells book for its Kindle app through its web store, but under Apple’s rules, the app will get bounced from the App Store if it includes that web link. It’s doubtful Amazon will want to share its e-book profits with Apple, so that either means no more Kindle on iOS, or at least a more convoluted method of purchasing new books.

Certainly it won’t just be Amazon that has to rework its business model come June 30.