Apple's Subscription Model Ruffles Publishers' FeathersBy Channel Insider Staff | Posted 2011-02-16 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
Periodical publishers will have to agree to Apple’s terms if they want to play the subscription game on the iPad or iPhone -- but a few of them might grumble about it.
In a widely expected move, Apple is rolling out a subscription service for content-based apps such as magazines, videos, music and newspapers. The service is already present in News Corp’s The Daily, a publication tailored specially for the iPad.
Publishers will have the ability to set a subscription’s price and duration, while customers can select the length of their subscription. Beyond that, Apple has set a few more rules for the new service.
"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," Apple CEO Steve Jobs wrote in a Feb. 15 statement. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."
Apple’s subscription service appears at a transitional moment for digital periodicals. On Feb. 2, Apple and News Corp launched The Daily, a tablet-only newspaper, in New York City. Priced at 99 cents per week (and $39.99 per year), the publication offers built-in games, weather updates, a customizable sports dashboard, interactive video and photos, and stories read aloud. Whether or not The Daily succeeds, its model—combining text with interactive content, formatted to a 7-inch or 10-inch screen—will be one almost certainly followed by rivals in the near- and long-term.
From that perspective, the integration of an app subscription service seems a logical move. But Apple’s newfound insistence on in-app purchasing has the potential to complicate life for app creators, as the company’s relationship with e-book publishers has already demonstrated.
Earlier in February, Apple started ratcheting up its policy enforcement for e-book apps, stating that app-makers such as Sony and Amazon needed to offer in-app purchasing through Apple’s online storefront if they wanted to make e-books purchased on other devices available through the iPhone, iPad and other Apple products.
For more, read the eWeek article: Apple's App Subscription Model Could Lead to Publisher Grumbling.