The iPad (s aapl) seems well-designed for magazines, but Apple has had trouble working out a subscription model with publishers that works for all concerned. Might Jeff Bezos have stolen away the revenue potential represented by periodicals with Amazon’s (s amzn) latest move?
Amazon announced that it would be increasing the revenue split for newspapers and magazines sold in the Kindle store to 70/30 after delivery costs, with the larger chunk going to publishers. It’s the same deal Apple offers, so the Kindle store should see an influx of content, but it’s the not the part of the deal that hold the most promise for Amazon.
In exchange for the new distribution of revenue, Amazon now requires that all periodicals must be able to be read on any platform on which the Kindle application appears, including the iPhone, iPad and Android (s goog) devices. Currently, content delivered through newspaper and magazine subscriptions in the Kindle store can only be viewed on actual Kindle hardware. Extending the “buy once, read anywhere” strategy that’s helping Amazon win the e-book war will greatly increase its chances in this battle, too.
Making Kindle periodicals cross-platform will give Amazon the advantage when it comes to providing digital subscriptions on iOS devices. Since the Kindle reader is a proven success, and the Kindle Store has a much wider reach than the Apple iBookstore, that should translate into a big lead in the digital magazine market, too.
The New Yorker costs $4.99 per issue if bought as an iPad app. Subscriptions to the magazine in the Kindle Store only cost $2.99 per month. It’s a large gap, and users aren’t likely to be willing to pay the difference even if the iPad versions are specifically formatted for the platform and contain some extra interactive content. Kindle’s interactive digital editions, introduced back in February, may help narrow the feature gap anyway.
If Amazon can convince publishers to accept the new deal and provide cross-platform content, something it clearly hopes to encourage via the new, easier publishing tool it also announced alongside the new revenue model, then Apple might be stuck on the outside looking in when it comes to digital periodical sales.
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