While Apple (NSDQ: AAPL) and Google (NSDQ: GOOG) are battling it out to woo publishers with their in-app payment services, I asked major content publishers at Mobile World Congress for their take on native in-app payments, and what it might mean to their own business models. The bottom line: of course they want more options for revenue streams — what publisher wouldn’t? — but no one is jumping wholesale into any payment system yet.
Nate Simmons, SVP consumer marketing, Time (NYSE: TWX) Inc.: “We do have apps in the iPhone and iPad — Time, People and Sports Illustrated for example — which we sell on a single-copy basis. We were interested to read the release. We are in active talks with them about the subscription model. We love the iPad and it’s a great product that has a great consumer base.” Time has made significant inroads into publishing apps with Android, earlier this week launching subscriptions that bundle access to the content on multiple platforms — print, smartphone, tablet and computer — for a single annual price of $48.
Louis Gump, VP of Mobile for CNN: [On whether the Apple revenue share of 30:70 is too much.] “It really depends on your point of view. Do publishers — regardless of whether they are TV or magazine or newspaper publishers, print or digitally-based — have other options that can keep them running in a sustainable way? Apple has given publishers an option and it is sustainable, and that is positive. As a general rule, having subscriptions is a great way to sustain a business. Lastly, we see this as an option, not a mandate. A large portion of the market will continue to offer content funded in other ways, such as advertising.” Like Time Inc., CNN has been a strong Android supporter so far, launching a new version of its tablet app that Gump previewed at Google’s Honeycomb launch event earlier this month. So far the service is ad-supported.
Juan Lopez-Valcarcel, director of digital products, Pearson: We are also evaluating the charges and have no further comment at this time. Yesterday we outlined the situation as it could stand for the FT were it required to pay up to Apple under the new system: a potential loss of $1 million.
Adam Smith, Futures Director, Group M, a division of advertising giant WPP: “Payment is a competitive area, and we need a lot more competition on that service, so we will have to see what these announcements will bring.” Indeed, the likes of PayPal, Zuora, Zong and many others have enabled payments, and are driving for more business in this area too — will they now get shut out?
Alejandro Romero, VP of Digital Media & Affiliates, Southern Europe, MTV Networks: “We love media transactions and we love the idea of in-app billing. We have been testing this out already with Apple. We are looking into it seriously. In-app charging enables us to explore the freemium model and the barriers to trying out new things are lowered.” He gave me a no comment yet on whether MTV thinks the revenue share is fair or workable with content that itself is acquired and used by MTV on a revenue-shared basis.
Simon Shaps, Chairman, A Brand Apart TV/Ignite Productions (and formerly director of television for UK commercial broadcaster ITV): “I launched a Lauren Luke makeup app, for the makeup artist who has had 105 million YouTube, and I would say those margins of Apple’s are quite tricky. I think it would be a pity if it served to depress the supply of apps in the App Store. Apps have been a vibrant and creative solution for mobile content.”
Ralph Rivera, Director of Future Media & Technology, BBC: Rivera only covers the UK, which offers only non-commercial apps, so no comment from him. But it will be an issue, however, for BBC Worldwide, which operates commercially abroad. Pay-TV channels will potentially face similar issues to magazines keen to bundle paid access across different platforms.