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One way publishers could skirt Apple’s 30 percent commission – just don’t offer new subscriptions through apps. That’s what Time (NYSE: TWX) Inc.’s Sports Illustrated, Fortune and Time – like People before them – did last week, meaning their app editions merely grant access to existing print subscribers.
“The pay model is what we’re searching for,” Sports Illustrated‘s editor-in-chief Terry McDonell told me on Wednesday, “- the magical equation that takes everything we need into consideration.
“This is all evolving. We’re very happy to have this arrangement now where our subscribers, which is the most important thing to us, can sign in and get Sports Illustrated on an iPad.
“We reach 30 million people, we have mass subscribers, we need them to be able to get a digital edition of the magazine downloadable on their iPad or whatever as part of that subscription – that will be the evolution of Sports Illustrated. All our research tells us they want it and they’re going to like it.”
Although some publishers like The Telegraph and Conde Nast are beginning to both grant access to existing subscribers and take new in-app subs in a transaction in which Apple (NSDQ: AAPL) will share, some like Time Inc are clearly unwilling to yet go beyond this step.
This method, of course, means both publishers and Apple miss out on a potentially huge new opportunity to sign up new customers. Last year, iPad contributed a tenth of new digital Financial Times subscribers.
But publishers’ keenness to hold on to customer relationships (and their money) may yet nobble that opportunity. Digital magazine software vendor Yudu made a pitch to publishers with technology for exactly this purpose.
This method may yet turn out to be a phase one, a step which buys publishers time to negotiate further with Apple.