Apple readying newspaper subscription support, say sources
updated 01:10 pm EDT, Wed September 15, 2010
Could circumvent obstacles to industry
Apple will soon announce formal subscription support for newspapers distributed through the App Store, says the San Jose Mercury News. While most of the details are not clear, industry sources claim that Apple has agreed to provide an opt-in clause for subscribers willing to share information with publishers. Newspapers have traditionally relied on subscriber data to sell the ads that keep a publication afloat.
The structure of the App Store has served to deter publishers from producing iOS apps, particularly for the iPad. While some magazines have come up with workarounds for enabling subscriptions, there is no Apple-backed system, and privacy rules prevent companies from harvesting data for marketing. By contrast, subscription options are already available on e-readers from Amazon and Sony.
Several risks may be present for publishers turning to the iPad. Although the tablet is seen as a potential savior of the newspaper industry, switching over from print to apps before ad revenue is high enough could cause serious financial damage. Similarly, Apple could potentially demand large cuts of both ad and subscription revenue, in the same way that it claims 30 percent from all app sales.
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While some magazines have come up with workarounds for enabling subscriptions, there is no Apple-backed system, and privacy rules prevent companies from harvesting data for marketing.
Note those rules only apply to non-Apple companies. Apple run advertising has no problem to get access to such data.
Several risks may be present for publishers turning to the iPad. Although the tablet is seen as a potential savior of the newspaper industry, switching over from print to apps before ad revenue is high enough could cause serious financial damage.
No more so than putting all your content on a free web site. Ad revenue on those sites are nowhere close to the financial damage they've caused.
And wouldn't the ad revenue on an app grow as more people used the app to read the paper?
Similarly, Apple could potentially demand large cuts of both ad and subscription revenue, in the same way that it claims 30 percent from all app sales.
Um, Apple has demanded 30% cuts from subscription revenue. They have no basis to demand cuts in ad revenue (unless they somehow demand they use iAd). And that's just if the papers deliver the subscription via the app store. If they just created their apps to download the content directly from the internet via their app, there'd be no cut to apple.