Apple’s Unfriendly Magazine App

It was just a question of time before Apple staked out online turf to grab a percentage of magazine sub revenues, and today the company did just that.  Unfortunately Apple’s terms of engagement are stacked against publishers.

Those participating in the program will be required to fork over a 30% cut for each sale. Okay, I can live with that since 70% is better than no percent. However, unless consumers purchasing digital subs opt in and furnish contact information, the publisher has no direct access to those readers. Given very nature of the ordering interface, it’s unlikely many iPad consumers will go the distance and offer name and address data, leaving publishers unable to control their mailing lists (circ managers out there must be pulling out their hairs by the follicles). And finally, publishers selling subs outside of the app as in their own websites (!) must offer the same deal or less within the app.

Well, it sure is consumer-friendly, but publishers are in the difficult position of lacking much bargaining power to obtain a better deal from Apple. Yet some observers have suggested Apple’s policy may in fact trigger anti-trust scrutiny given the anti-competitive nature of the program.

Brings me back to the good ol days of iTunes 1.0 when the cursed Digital Rights Management (DRM) conspired to effectively ruin the very flexibility inherent from purchased music. In a nutshell, those early downloads were laced with code that prevented the rightful user from making tag changes and moving clips to other devices. Fortunately, the outcry against DRM prevailed and it is no more but the damage is done and many users have opted to acquire digital downloads elsewhere, Amazon chiefly among them.

Bottom line: Apple is in a win/win situation. They have the ecosystem from which to sell more stuff, have no inventory nor production costs, and are able to grab nearly one-third of the sale. Personally, I don’t buy from iTunes (see DRM above) and have an aversion anyway to “digital editions.” But some publishers including Hachette are frothing to get involved in Apple’s new deal no doubt out of desperation. Consumer titles may as well get on board as their life expectancies are limited so grab what you can. But my advice to niche mags…. stay the course and do your own thing.

Official Apple announcement.

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  1. Apple could care less if publishers whine about the deal. Jobs knows they are desparate and will sign any deal so Apple gets content for a third slice. Pretty smart.

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