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This week Apple, (s aapl) caused a storm by announcing their new iOS App Store terms and conditions for publishers. In a nutshell: Long-awaited in-app subscriptions are here, and the service brings with it the usual 70/30 revenue split common to Apple’s other content channels, like music and apps.
So why the controversy? Apple prohibits publishers from offering more attractive (read: cheaper) subscription deals to customers outside the walls of the iOS App Store. Whatever publishers offer outside the App Store must be matched (or bettered) inside the App Store. Oh and just one more thing; Apple will not hand over to publishers the personal details of customers making in-app purchases/subscriptions without the permission of those customers. This last point is great news for consumer privacy, but another nail in the coffin for publishers accustomed to using said data in valuable advertising deals.
If you’ve ever subscribed to a magazine or newspaper you know how it works: A subscription card often asks for far more than just your name, address and credit card number. Those mini questionnaires publishers require of their subscribers supply them with a huge variety of valuable information they can use when selling space to advertisers. In fact, advertisers now demand it; after all, they want to be sure they’re placing their ads strategically — and therefore, spending their money wisely.
It matters not one jot if a publication acquires a few thousand subscribers through the App Store; without the typically-concomitant subscriber data, advertisers will be less inclined to buy space in any iOS publication.
How Did We Get Here?
Much publishing today is less concerned with quality than it is with quantity. The more copies there are of a magazine in circulation — or clicks on a web page — the more eyeballs see accompanying ads. In a world where, more than ever before, readers have more choice of content, but less time to engage with it, for many publishers, the key to generating appreciable revenue lies not in value, but in volume.
And I’m not talking small-time publishers here; in early February, Business Insider revealed AOL (s aol) CEO Tim Armstrong’s guide to his network’s editors, titled “The AOL Way”, in which the editorial priorities of the company are laid-bare; on a page directing editors in how to decide what topics should be covered, “Editorial Integrity” (in other words, editorial quality) is ranked last, after “Traffic Potential,” “Revenue/Profit” and “Turnaround Time.”
Changing the Game
Online publishing’s focus on advertising, sponsorship and syndication is problematic, for viewers and for Apple as a company that wants to provide worthwhile content for users of its platforms. Great quality content, in this model, is of little use to publishers, despite the fact that it happens to be precisely the thing readers actually want.
Apple, I think, has noticed this problem, and is now taking positive steps to solve it. Apple wants to ensure that publishing on the iPad is never anything less than top quality, where the paramount priorities of publishers lie always in ensuring the quality of their content.
Hard Work for Big Returns
You see, with the rules as they stand today, the only way publishers can be successful in the App Store is by concentrating on producing the very best content. And that won’t happen because they place “Editorial Integrity” in first place on a PowerPoint (s msft) slide. Publishers will have to commit themselves to produce nothing less than the very best content in the industry. It will take a lot of investment, a lot of insanely hard work and, for some publishers, a serious restructuring of their editorial staff and policies. None of that is easy or cheap, and, for publishers used to and dependent upon advertising revenue, it must seem a ludicrous proposition.
Apple has established a sales and distribution platform that emphasizes content sales and subscriptions over advertising, but if the company really wants to help publishers embrace the “content is king” philosophy, I think they need to do much more to assist in content creation and promotion. However, it begins with giving publishers with something that is still sorely-missing; top-flight iOS publishing tools made available — for free — to all publishers and authors everywhere. iOS is a publishing platform bursting with potential. Apple needs to give content creators an easy — and powerful — set of tools for leveraging it. Its iAd Producer application for the Mac might be a good place to start.
In the end, I believe most publishers genuinely respect their readers and care about the quality of their content; and I suspect they would happily unshackle themselves from their reliance on advertising revenue if only subscriptions and sales revenues could take its place. Apple has provided a tantalizing new path for publishers to tread, provided they don’t just throw their hands up and walk away citing Apple’s greed as a way to take the easy way out.
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