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Apple Subs: Some Publishers Relieved They Dodged A Bullet

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Despite concern, many publishers are actually “relieved” – they feared Apple’s new subscription rules would be a lot more damaging.

The overall reaction from them is positive,” Nic Newman of digital design agency Tigerspike – which makes apps for over 20 publishers including The Economist, The Telegraph, News Corp, NBC (NSDQ: CMCSA) and ESPN (NYSE: DIS) – tells paidContent:UK.

Publishers were bracing themselves for the fact that Apple might turn off any subscriptions from outside of Apple (NSDQ: AAPL). But, if you go to the detail of what they’re saying, you can still have your own subscription mechanism outside the app, as long as you also have something inside the app. So they’re giving flexibility.”

It now seems like those January reports of radical Apple demands, that publishers could not grant app access to their existing subscribers, gave newspaper and magazine companies heart tremors.

They turned out to be over-stated (existing subscribers can continue authenticating in apps). But several publishers which had been planning version-two or -three updates to their rudimentary debut iPad apps had delayed their strategic decisions by one or two months while awaiting Apple’s news, Newman told me.

On the whole, they see the new scheme as a net positive, he says, considering: “Why on earth would I leave an app to enter my credit card details when I could just do it in the app?” It took less than 24 hours for Future to announce it’s moving the iPad version of its its T3 gadget mag to the new subscription model.

But that’s unlikely to be the feeling across the board – many will baulk at the 30 percent rate if they’re not reassured that, whilst it will give Apple considerable margin, it will also grow publishers’ pies significantly.

What’s surprisingly clear, from reaching out to publishers, is that many are quite in the dark about just what the net impact will be, even though this story has been live for weeks. Some of those I contacted said they could not comment because they were seeking clarification from Apple on exactly that question.

The issue giving publishers most uncertainty, Newman says, is a clause in revised terms that would regard their subscriptions apps as “non-consumables’, a category Apple apparently says must include archive, as well as current, content. Publishers are seeking clarity from Apple on whether this means they must now include back issues in their subscription apps.

8 Responses to “Apple Subs: Some Publishers Relieved They Dodged A Bullet”

  1. jmatazzoni

    This is a one-source story that sounds weak on specifics. The idea that publishers don’t mind handing over 30% of their revenue in perpetuity is not believable. I’d like to hear it from the publishers themselves if it’s so.

  2. You’ve gotta love Google.

    Android still doesn’t have in-app purchases and they’re making these announcements.

    Hey, all you need to work at Google is the ability to pull your head out of your ass!

  3. G Robertson

    Totally agree with hahnchen. The margins are just not there. Even if you look at the margin on iTunes download sales Apple could not do this deal themselves. All the licensing is already in place with the labels and music publishers so the subscription services essentially have to lose money on every iPad customer or bail out and concentrate on Android et al. Rhapsody have already said the deal is ‘economically untenable’. Real shame as this market was just getting interesting for the music industry.

  4. Robert, don’t know. It’s in the In-App-Purchase Guidelines which i think are only accessible to paying developers.

    Might have been that somebody has published the section on the web.

    Oh.: BTW i Think that 30% is to high a cut also for publishers since other than with the apps, the publisher itself has to provide and maintain all the infrastructure for downloading the content etc.

    Apple is merely a billing provider in that case. But hey, market forces :-) My guess: Eventually this will come down to a Paypal, Creditcard company pricing scheme for IAP

  5. quick correction: it’s non-consumables. And that does indeed mean that a subscriber has to be able to download every single issue that he bought for the foreseeable future on every device he owns an runs the app.

    This is alsp pretty much what consumers expect.

    The Apple guidelines are very clear on this. This was alerady the case for the single item downloads, but not every publisher implemented it :-(

    There also long have been so called subscriptions as a product category within iTunes. For clarification the new ones are called auto-renewabe subscriptions. The old ones were not subscriptions in the publishers sens but more or less access tokens for a period of time.

    They are stll there and can be used, but with this you have to handle the subscription management yourself, e.g. has user x still the right to access the content etc.

  6. It might work for print publishers who have never managed to charge for their content online, but it’s a killer for subscription streaming services.

    Music and video services do not have a 30% margin to give away to Apple. Apple’s terms mean that they cannot charge extra for iOS devices even though it costs them extra. It means you’ll see them exit the market on iOS devices, paving the way for Apple’s own iTunes streaming.