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Summary:

The Financial Times has struck out on its own against Apple, urging subscribers to switch away from iTunes in favor of a dedicated HTML5 app. It helps the venerable newspaper break free of Steve Jobs’s iron grip — but will others follow suit?

Financial Times HTML5 app

Financial Times HTML5 app

Ever since the iPhone and iPad arrived, publishers have spent millions building dedicated software to try to cash in on the app boom. Everyone who was anyone — from the Wall Street Journal  to Wired — just had to have an app — even though the business reasons weren’t that great.

Now, however, one of the biggest names in the news industry has decided it has spent enough time bowing to Steve Jobs — and thrown down the gauntlet.

The Financial Times, the newspaper beloved by the business community, has taken a direct shot at Apple by launching its own web-based reading app, which it hopes can bypass the need to work with iTunes.

The app — which uses techniques offered by HTML5 to produce a rich reading experience — is available now to FT subscribers. They can simply visit app.ft.com and enjoy. And what it has done looks good, as you can see in the promo video.

The FT isn’t making any bones about why it is doing this. The timing — coming just hours after Apple announced the launch of Newsstand, the company’s attempt to bring more magazine and newspaper outlets under its wing — is surely no coincidence. Publishers have long been irritated at Apple’s ownership of the customer relationship, as Mathew pointed out yesterday, and the FT has been one of the most strident critics of that situation.

Indeed, on its app page, the FT admits quite clearly that it wants the HTML5 app to become a long-term replacement for its iOS equivalent — urging users to switch away from the existing platform:

We’re encouraging our readers to switch immediately to the new FT web app, as many new features and sections will be added over the coming weeks. Make sure you don’t miss out on these updates.

But even if, as it seems, the publication was acting out of anger towards Steve Jobs and his staff, breaking away from Apple is an important strategic move in the long run. Information companies are locked in a David and Goliath struggle against the technology industry, but yet they seem to capitulate at every opportunity. While the momentum is clearly with the likes of Apple and Google (the FT’s parent company, Pearson, is the world’s largest publisher — yet its $15.14 billion market cap is dwarfed by Apple’s current value of $311.43 billion) the truth is that defending their corner may be the only way for publishers to stop being crushed completely.

It is not only about a philosophical battle, however. In fact, opting to route around the technology companies has a significant number of other real-world advantages over native apps.

For a start, it’s independent of anybody. This is important because it ends the possibility of content being blocked on spurious grounds, something writer and citizen media pioneer Dan Gillmor has been banging the drum about for some time. In effect, nobody owns the presses apart from the publisher. That also means updates — such as more types of content, technical tweaks, new features — can happen instantly, rather than require approval (as is the case with Apple).

It also allows publishers to stop worrying so much about specific devices. The hardware market is very broad, and only the craziest outfit would try to satisfy all device users simultaneously — yet, in the past, many publishers have done exactly that. However, even when the market is narrower and publishers only have to worry about a handful of download stores, they are still pulled in many different directions. Do you produce native apps for each of the different platforms, or focus on a couple? Do you try to satisfy your users on less-popular platforms like webOS or Windows Phone?

In fact, HTML5 offers creators an even easier option, since most high-end mobile browsing actually uses the same engine: WebKit. Using that as its basis, publishers can produce a single service that’s rich and highly readable on an iPhone, iPad, Android device, BlackBerry, Palm, Nokia S60. Even the Kindle uses WebKit. This makes Web compatibility easier than going through all those different download stores, each with their own requirements and demands.

This, in turn, allows publishers to take advantage of new developments as they happen, rather than rush to keep up with the secretive production cycles of the big technology firms. Who would prefer to work with native apps whose capabilities are dictated by companies when you can use HTML, where standards and development are open and well-documented? It can make apps as dynamic as the web itself — the sort of move that means publishers can say goodbye to huge, cumbersome, static magazine downloads.

On top of all of this, of course, you also have financial considerations. No worrying about how much the technology platform is going to take from your business. No more costly support of dying platforms. And much less separation between mobile and Web development. All good news for publishers with a bottom line.

Quite how this all plays out in the long run is no clearer today than before. Ultimately, the FT’s app may be just a tiny shot in the arm for publishers. But it’s an important step forward, and one that other publishers and outlets should sit up and take notice.

  1. Bryan Cheeba Tuesday, June 7, 2011

    Your reasoning is faulty. Your language says it all. Attempting to “bypass”? Bypass what exactly? The rules that apple set forward for it’s own platform? Apple isn’t trying to go into people’s homes and force them to use things they don’t want. The FT is attempting to do this. And it will fail spectacularly because of one main reason. Readers of this kind of content want a native and able to use offline solution. No matter what platform. In general the content is very similar, an the threshold for users to change sources is EXTREMELY low. So unless they make it so compellig that it will always work and work some offline, I just don’t see it working for them.

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    1. The new FT app allows you to bypass itunes, which the article states, exactly. You don’t have to buy or download an app from itunes, you go to the FT’s website, and install it from there (as a dedicated browser app).

      As a subscriber to both FT’s print and internet editions, I can say it works for me. It’s actually really good. I don’t think it will fail spectacularly, or even at all. And it does work off-line, once you install the app, as it allows you to download the content, and refresh it at your convenience (which you would have to do anyway if you were using an official, Apple-gets-30% app).

      My take is that other publishers will follow the FT’s lead, if they are smart.

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    2. Bobbie Johnson Tuesday, June 7, 2011

      I’m not sure what you’re talking about really, Bryan. The FT says it wants to allow users an app-like system without having to use iTunes (or another app store). That’s “bypassing” in almost anyone’s language. And it’s an offer for existing subscribers, of which there are many.

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  2. The critical question for publishers is: How do you get people to your web based app? There is no doubt that wonderful device independent applications can be built in HTML5, but how will readers find all these sites / applications.

    What is needed is a news stand, but not the toll taking type advocated by Apple, where magazine and newspaper publishers form a consortium and have a single site like read.com (which looks to be “parked” waiting for a deep pocketed bidder to come along) that has its own slick HTML5 interface (think Flipboard) that serves as a portal to all the member content. The portal could also handle billing for those publications that wish to charge for their content.

    With only a single web site to bookmark and go to (maybe they can work out a deal with browser developers to get shelf space) readers might adopt the stand alone model as opposed to toll taking news stands and complicated platform specific apps for each publication.

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    1. This is exactly the right question and is the reason Apple can charge 30%. They are acting as a customer friendly easy to use portal for finding and impulsively buying content with as little difficulty to the consumer as possible.

      How many people have spent 99 cents (or even $4.99) on a stupid app that they never use? Answer: Everyone with an iPhone. Why? Because Apple makes it really easy to make impulsive purchases.

      If publishers don’t like it, then they can go many different routes. If they are big enough or important enough, they can use their size to try to negotiate special deals with Apple (look at apple records). They can decide to forgo the app store entirely like FT.

      Apple is simply playing the part of a very strong negotiator operating from a very strong negotiating position as the owner of the most popular technical delivery platform. Good for them.

      Frankly, publishers should quit their bitching and focus on their product. Kudos to FT and the NYT for doing exactly that and thinking creatively.

      As for the 30% whiners out their? What is the cost overhead of the print edition? Get over it. There are many routes to success out their. Focus on your core business and deliver the best product you can. Most App developers are pretty happy with the terms of the deal, as they get a great delivery channel from Apple.

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      1. Bobbie Johnson Tuesday, June 7, 2011

        Great point. One problem with the newsstand is that a consortium of publishers working together would probably face antitrust investigation in their attempt to build a single solution. Meanwhile Apple, or another technology player, already has the digital distribution.

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      2. The 30% cut that Apple takes is defensible if they are finding customers for the publishers – if you are selling an app that people don’t really know about, then paying Apple to direct people to your app makes sense. However, if you just want to use Apple for digital distribution, a 30% cut is exorbitant. Neither the FT nor the NYT needs Apple to reach new customers. They, along with many other publishers, would be happy to give away apps that enable paid subscriptions that they manage, but Apple doesn’t allow it. Once Android has a viable periodical distribution system, Apple will be forced to compete, or cede that market.

        Yes, the cost of printing and distributing physical copies is a lot more than 30%, but also their revenue is less. This is not a fair comparison, what should be compared is how much it costs any company to run a content distribution network. However, Apple doesn’t allow publishers to do that, and that is what upsets them. the FT has implemented a work-around, and while it’s not the best solution possible, it is pretty good given Apple’s restrictions.

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  3. “the truth is that defending their corner may be the only way for publishers to stop being crushed completely”… if it wasn’t for the App Store (or even WebKit, which I might remind you Apple developed) they probably WOULD have been crushed completely by now… For all this the bunch of ingrates, collectively known as the Financial Times, still don’t want to acknowledge Apple’s contribution to their business sustenance but, also, brazenly thumb their noses at them. For a business publication, FT sure isn’t business-savvy!

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  4. Woosh… Right over his head.

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  5. Hasn’t Apple been pushing HTML% for months. Apple’s 30% hardly pays for much more than costs to manage the process. Apple makes its money selling hardware, not magazines. It cares little whether you use an app or the browser. It just wants you to use an Apple product. The FT web apps is better than the average browser experience. Good web apps will thrive; bad apps, web or native, will fail. Either way if it’s used on anApple product Apple thrives.

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    1. I won’t debate what the appropriate commission should be for providing a storefront, but it is a highly scalable model and the economies of scale Apple enjoys are huge. Apple cares deeply where you get the content. Yes, they make money from hardware, but the content sales provide an ongoing high margin annuity business for them. It’s the classic two part tariff: Buy the hardware today (iPhone, razor, old fashioned camera) and continue buying the supporting layer (music/books/content, blades, film) as long as you have the hardware

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  6. “the truth is that defending their corner may be the only way for publishers to stop being crushed completely”… if it wasn’t for the App Store (or even WebKit, which I might remind you Apple developed) they probably WOULD have been crushed completely by now… For all this, the bunch of ingrates collectively known as the Financial Times, still don’t want to acknowledge Apple’s contribution to their business sustenance but, also, brazenly thumb their noses at them. For a business publication, FT sure isn’t business-savvy!

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    1. From Wikipedia “WebKit was originally derived by Apple Inc. from the Konqueror browser’s KHTML software library for use as the engine of Safari web browser, and has now been further developed by individuals from the KDE project, Apple Inc., Nokia, Google, Bitstream, Torch Mobile, Samsung and others.”

      Far from being a “bunch of ingrates” FT has had a very successful subscription system for years. It thus has no reliance on Apple and certainly no reason the be grateful.

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      1. But, if Apple hadn’t adopted it, enhanced it, and used it in Safari, we wouldn’t have heard of Konqueror and the KDE folk would be toiling in obscurity. Apple put some great people on it and got the ball rolling.

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      2. Important: if you’re going to search for information never stop at the abridged “Wikipedia” page for dummies. Go to the source…

        “Apple employees have contributed the majority of work on WebKit since it became an independent project. Apple uses WebKit for Safari on Mac OS X, iPhone and Windows; on the former two it is also a system framework and used by many other applications. Apple’s contribution has included extensive work on standards compliance, Web compatibility, performance, security, robustness, testing infrastructure and development of major new features.”

        I’m so happy to learn that FT enjoys such a successful subscription system; I guess they don’t need anybody’s help then…

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  7. This is exactly what Apple wanted developers to do before the App Store launched like a rocket. Either way, Apple wins another round as FT’s move obviates Flash for readers.

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    1. I am not sure how this move by FT obviates Flash for readers. I think we can all agree that Flash has some issues, but at the present time browsing the web without it isn’t a complete experience.

      I won’t debate whether Flash should be a part of the web in the future (the market will sort that out), but right now it is. When I browse on my iPad it’s not rare to run across elements that just don’t render properly, or at all. Yes, some are those dreaded Flash based ads, but on many sites it’s actual segments of the content that are missing.

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  8. The one-sidedness in this article is amazing. Reading it, you would think there’s no value whatsoever in being part of a virtual newsstand, and that any company would be crazy not to go it alone on the web.
    In the real world, those potential customers that the newsstand brings may have a lot of value, and if you go it alone, you’ve got to somehow drive new customers to your web app by yourself.
    No recognition of this at all.

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    1. I don’t think anyone disputes the value of a newsstand. Being a content aggregator definitely adds value and the question for publishers is how to best capture that value. It may be in the Apple or Android marketplaces, it may be in some other model.

      By the same token, “marquee” publications have substantial value to the newsstand as anchor tenants that should be accounted for. It would be premature for a publication, especially one like the FT with a substantial following, to put all their chips down with a single solution at this point. Only with actual usage data over time and a full knowledge of revenue and cost economics can decisions be made. Exploring options like FT is doing seems pretty smart.

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  9. Oh, this makes me so happy. I really hope more magazine publishers make this kind of move — or perhaps form an association to create a cooperative newsstand that circumvents the App Store and iTunes. Unless publishers have millions of faithful readers who will come looking for their content, I think it’ll be difficult for individual magazines to go it alone. More outlets equals more competition, and that can only be a good thing for readers.

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  10. John Dingler Tuesday, June 7, 2011

    You are lying; Apple does not preclude subscribers from opting in to giving personal info. to the publisher.

    Read the Apple guidelines again.

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  11. I think this will fail. The app does not work well, and does not work offline (for me and many other readers it seems as of today).

    What the FT and other publishers want is to distribute their content and make users pay for it while not paying anyone for distribution costs? Can’t work! There is no such thing as free distribution – Apple is providing the paper, printing presses, distribution channels, and if you subscribe within iTunes, payment systems etc.

    FT readers can always subscribe online (and FT can promote that in app) in which case Apple would get 0 revenue.

    I don’t understand the economic logic of people. I have experience in the content world and there always has to be a revenue split between the various actors in the value chain! Apple’s 30%, contrary to common perception, is far from being outrageously high.

    What the FT could have done would be to be smart to continue partnership with Apple to ensure superior user experience (like on their iPad app) and negotiate a better deal than 30%, conditional on revenue brought by FT for example. Maybe Apple was tough in negotiations, but rightly so.

    As an FT premium subscriber if the FT goes the web app route only I’d be hugely disappointed unless the web app manages to be on part with native app.

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