Nothing is more important to the digital future of publishers than the ability to sell subscriptions to iPad- and iPhone-based editions of their periodicals. Now Apple has given them that ability, while imposing a restriction that’s likely to dampen their joy somewhat, Forbes.com reported Tuesday (2/15).
The new service allows publishers (and purveyors of all types of media, in fact) to sell subscriptions both from within the App Store and from outside it. According to Techcrunch, publishers aren’t exactly pleasedas they feel consumers will opt for the simple iTunes route rather than hand out their information to yet another website. (The rules require companies “to offer the same subscription in the App Store at the same price or less.”)
“Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” CEO Steve Jobs, who is on medical leave, said in the announcement.
As TechCrunch predicted, however, Apple is insisting that, for every subscription offer, customers have the choice of which way they want to buy it. This is a blow to publishers, who fear that anyone who’s already an iTunes customer would rather go that route than give out his credit card number again to a new vendor. Not only will publishers forfeit 30 percent of the proceeds to Apple on those transactions; they’ll also have to invite customers to “opt in” to share their personal information. Without that information, they’re far less valuable to advertisers.
Apple’s rules also forbid publishers from directing customers within an app to an external website to complete the transaction, the Forbes.com reporte said.
WEDNESDAY UPDATES: Apple’s new subscription service could draw antitrust scrutiny, according to law professors quoted by the Wall Street Journal. The Silicon Valley Insider chimed in: Is Apple really allowed to do this? Absolutely. As both professors quoted in the Journal piece note, any antitrust claim would have to start by proving that Apple has a dominant position in the relevant market. Right now, it’s not even close. minOnline: The dearth of launch partners for the model suggests that many publishers either were caught unprepared by the announcement or remain ambivalent about Apple’s terms. Notable exceptions included Bonnier’s Popular Science, Hachette Filipacchi’s ELLE and Nylon magazine.
And more: CNET: Apple was expected to roll out a subscription service, sure, but the company doesn’t appear to have sought any early feedback from some of the nation’s top media companies. TechCrunch: This latest maneuver by Apple, and several other of its recent “evil” moves, can actually be explained quite easily. Apple isn’t out to trick everyone and eventually screw them over. Instead, Apple has perfected the art of making money.
Also from TechCrunch: Simply put: This is one of the boldest bets Apple has ever made. And it could backfire. Or it could be huge beyond belief. Either way, it’s going to be very controversial. Silicon Alley Insider: Music subscription service Rhapsody says Apple’s new plans are “economically untenable,” and it has teamed up with other music services to consider options, possibly including legal action.
