Apple (s aapl) won over two new publishers to its iOS subscription plans late Wednesday, including newspaper The Daily Telegraph and the really big fish, major magazine publisher Hearst. Hearst is behind many popular magazine brands, including O (The Oprah Magazine), Esquire and Popular Mechanics. The iPad edition of those three magazines will be available for $1.99 per month or $19.99 per year beginning with July issues, and the free Telegraph for iPad app now offers £9.99 (approximately $16.41 U.S.) monthly subscriptions for UK customers.
The Telegraph has reportedly accepted Apple’s terms for digital subscriptions, which allows Apple to take
70 30 percent of all revenues made through in-app purchases and maintain exclusive access to customer information, unless the customer opts to share their info with the publisher too. Hearst didn’t specify what terms it agreed to with Apple, but did reveal that it was “comfortable with both the cut Apple will take, and the amount of customer data it would have access to,” according to the Financial Times.
Hearst’s Vice-President of Public Relations, Jessica Kleiman, made remarks that suggest some amount of negotiation was involved in the process:
It’s an equitable and fair deal for both sides. There was a lot of back and forth and we feel it’s a fair agreement in terms of sharing the data and owning the customers together.
While Kleiman seems to want to suggest there was give and take in the process, Apple is famously stubborn when it comes to the terms of its App Store agreements, and I find it highly unlikely that the company gave any ground regarding either its revenue share, or how it would handle customer information. More likely, Hearst realized that the only terms Apple had on the table were both “fair” and “equitable” in order to continue to reach the huge potential audience that is the iPad user base.
Hearst is the first major magazine publisher to come on board with Apple’s subscription plans. Time Inc. announced a deal which would allow print subscribers of its magazines access iPad digital editions for free, but it didn’t announce in-app subscriptions at the time. I suspect that deal is already made, and why Apple allowed the print subscription carry-over to begin with, but neither company has said anything to that effect yet. Hearst, unlike Time Inc., has no plans to offer iPad editions free to existing print subscribers, since it wants both sources to act as separate revenue streams.
Publishers may be privately outraged by Apple’s subscription terms, but they’re also slowly but surely accepting the agreement. Apple has all the negotiating power in this relationship, so don’t expect Hearst to be the last to succumb, either.