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Condé Nast is the latest publisher to announce digital subscriptions for Apple’s iPad(s aapl), and the deal represents a big victory for Cupertino. The publishers will begin offering The New Yorker via iPad subscription today, with seven other titles to follow by the end of May.
Condé Nast is the second major magazine publisher to sign on with Apple in-app subscriptions. Hearst announced a deal just last week, and while Time Inc. (s twx) appears to be the last official holdout among the big publishers, it did just announce a deal to bring iPad editions of its titles to print subscribers for free. That deal had to come with a cost, and I maintain my belief that the company has agreed to fall in line with Apple’s in-app subscription terms at a later date.
All three companies have taken slightly different approaches to Apple’s tablet platform, but none came out immediately in support of Apple’s proposed in-app subscription terms, which required that Apple take its 30 percent cut and maintain full control of the subscriber relationship. Customer info, which is like gold to magazine companies because of its value for marketing efforts, is only given to magazine companies through Apple subscriptions if a customer opts in, which seems unlikely to happen often given the way iOS asks a user to share said info (see below).
Of the three major magazine publishers, Condé Nast’s approach seems best designed to benefit consumers. That’s because in addition to offering reasonable rates for in-app subscriptions ($59.99 for one year of The New Yorker, or $5.99 for a one month, four-issue subscription), the publisher is also planning to offer free access to iPad content for existing print subscribers. Hearst will offer in-app subscriptions, but those will be distinct from print subscriptions, as the company sees both as separate revenue streams. Time Inc. as mentioned, has so far only announced access of free in-app content for existing subscribers, with no digital subscriptions.
Apple’s ability to win over these publishers (and a growing number of smaller publishers, too) will ultimately be great for consumers, many of whom had balked at high per-issue pricing even on magazines apps that were widely praised, like Condé Nast’s Wired. A reasonable pricing structure should attract more subscribers, which should in turn benefit publishers, too, but it remains to be seen whether that payoff will be enough to shore up the magazine industry’s declining fortunes.
News Corp.’s (s nws) The Daily lost $10 million over its first three months on the App Store, though it also saw more than 800,000 downloads. News Corp. has said its losses are due mostly to expensive initial investment costs, and it’s worth noting that The Daily had an extensive free trial period and was only a paid app for fraction of those first three months. Still, it does raise questions regarding the iPad’s ability to make digital periodical publishing profitable.
Affordable in-app subscriptions will provide a much-needed shot in the arm for the iPad magazine in general, but long-lasting value still depends on innovative and effective use of the platform and high-quality content. One-time subscribers are better than one-time buyers, but still more valuable repeat customers will only come when publishers nail down the one-two punch of truly outstanding package and content, something which has been tricky so far for iOS periodicals.