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Summary:

Two months after the deadline for compliance hit, it’s now clear The Financial Times and Apple (NSDQ: AAPL) can’t come to a compromise over…

Financial Times iPad

Two months after the deadline for compliance hit, it’s now clear The Financial Times and Apple (NSDQ: AAPL) can’t come to a compromise over the new requirement that in-app subscription payments must go through iTunes Store.

The paper’s iPad and iPhone apps have disappeared from iTunes Store. Apple says the FT took them down to comply with its new terms.

It is a blow to the FT, whose apps had processed subscription transactions independently. Last year, 10 percent of its new digital subscriptions were taken out on iPads. But the publisher says its model is premised on owning data about customers that goes through along with transactions. This was more important to it than Apple’s 30 percent take, CEO John Ridding told me recently.

It’s a more drastic move than many, including rival WSJ, had employed to work around Apple – that is, allowing iPad read access to existing subscribers but ending new in-app transactions.

It’s not clear how many users there are of the FT‘s iPad app, but the FT has added around 100,000 new subs since iPad came out, so it may have up to 10,000 users.

In June, the FT launched a well-functioning web app as a replacement. It soon began urging subscribers to that instead.

It’s not yet clear if use of the web app will be mandatory for users of the proper iPad app. Nor is it clear how many users of the proper iPad app have migrated to the web version.

The FT claims 550,000 users of the web app – but that is likely because it was free for a few weeks after launch (and that number is actually likely unique users, since the new app is effectively a website). The publisher now will likely have to market the web version harder than ever, especially to users of the full iPad app.

“The FT iPad and iPhone apps will no longer be available to new users through iTunes,” an FT spokesperson tells paidContent. “We are directing readers to the FT‘s new web app available at app.ft.com. iTunes will remain an important channel for new and existing advertising based apps.”

The Chinese edition of the Financial Times (free) and Financial Times Deutschland (£1.49 sub), of which FT Group no longer owns a stake, remain on iTunes Store.

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  1. Greg Golebiewski @znakit Tuesday, August 30, 2011

    Good for FT. A 30% cut plus subscribers’ data (plus free marketing for Apple).. it is a lot! Especially that there are other, better options. http://bit.ly/r6jFzl

  2. I wonder who needs who more?

  3. Stefan Constantinescu Wednesday, August 31, 2011

    There’s no other way to say this, but the FT is dumb. How easy would it be to just sell subs through their site and then make their app accessible via a login, similar to how The Economist works?

    While the FT web app is nice, it’s no where near as polished as their app once was.

    1. If it was only the FT, but there are hundreds of content providers in line to get exploit by Apple, and happy about it. I really do not underspend it. Are the publishers and editors responsible for revenue generation unable to do a little research and find out alternative solutions?

      As you say Stefan, nothing simpler than have a sub or on-demand payment gate on their own sites. It can be done in a few minutes using technologies and payment services available now. Why to give away 30% of one’s possible income? Why to become one more subject in Apple’s user farm?

    2. Come on, be honest, if Apple were in FT’s shoes, they would have exactly the same reaction.  Both want to “own” and be able to communicate directly with their primary customer.  With all that iTunes offers that is good (marketing, if you are lucky, one-stop shopping, etc.), the pale in terms of customer contact and the 30% commission.  30% along for someone like the FT is probably double their current marketing spend.

      For us small developers, it is a deal, but if we every become big enough, we will likely all feel the same as the FT.  Just smart business.  Apple can be greedy now, not for every though.

  4. Apple is playing a risky game alienating the very content providers that made their hardware useful. Many Android Tablets and the new Amazon Tablet have better hardware than the iPad and their operating systems/UI are not far off from competing with IOS. These competitors are looking for the chinks in Apple’s armor and in-app subs and data hoarding could be two areas worth targeting. Lose the support of the major publishers and the value of the iPad, IPhone and iPod could be seriously undermined.

    Dominant players, driven by arrogance and greed, are usually the architects of their own downfall.

  5. Woooooo! Sick to death of crApple greed to be honest!

  6. What “compromise?” Apple has simply stuck to its “30% or you don’t play” and clearly the FT has decided to take its ball back. Apple may well be able to make money with a flat-rate tax on all “content” but most other businesses cannot afford to give up 30% of their margins and remain profitable. Kudos to the FT for standing up to the neo-monopolists in Cupertino. I’ll subscribe to it on my Galaxy tab and the FT can skip the whole “apptax” thing that Apple have created.

    1. “I’ll subscribe to it on my Galaxy tab and the FT can skip the whole “apptax” thing that Apple have created.”

      No they won’t – Google also take 30% 
      https://www.google.com/support/androidmarket/developer/bin/answer.py?&&answer=112622

      1. Argghh! OK, so I’ll wait until I can download it directly from the FT site ;) Thanks for the heads up!!

  7. Subscription Insider Wednesday, August 31, 2011

    Curious to see how FT will do with new web app

  8. Well done Apple. FT wanted Apple to give them details about me I’d given on the strict understanding that it would not be passed to any third parties.

    By not giving in to the demand, I still have faith in Apple and trust that they will stick to what they promised when I signed up with iTunes.

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