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Businesses The Almighty Buck Apple

Apple To Keep 30% of Magazine Subscription Revenue 381

Hugh Pickens writes writes "The Guardian reports that Apple has launched a new subscription service for magazines, newspapers and music bought through its App Store, expanding the model developed for Rupert Murdoch's iPad newspaper and will keep 30% of the revenue from subscriptions if the subscription is purchased through Apple. 'Our philosophy is simple – when Apple brings a new subscriber to the app, Apple earns a 30% share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing,' says Steve Jobs, Apple's chief executive, who is presently taking a medical leave of absence from the company. 'All we require is that, if a publisher is making a subscription offer outside of the app, the same – or better – offer be made inside the app, so that customers can easily subscribe with one click right in the app.' Apple's control over its App Store payments plan has long been a cause for concern for content companies. Publishers want to have access to subscriber data which can provide lucrative demographics on which to base advertising campaigns and targeted reader offers. Apple says customers purchasing a subscription through its App Store will be given the option of providing the publisher with their names, email addresses and zip codes. The use of such information will be governed by the publisher's privacy policy rather than Apple's."
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Apple To Keep 30% of Magazine Subscription Revenue

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  • by bigzoom ( 1996992 ) on Tuesday February 15, 2011 @03:26PM (#35213562)
    Publishers in the print world will happily sell subscriptions for less than the price of postage in order to increase their paid subscription count (and hence their ad dollars). To get 70% of the subscription money, all of the ad money, and have no printing/postage costs actually doesn't sound too bad for publishers. If Apple demanded that they get 30% of ad revenue too, that would start to be a much larger issue.
  • by eldavojohn ( 898314 ) * <eldavojohn AT gmail DOT com> on Tuesday February 15, 2011 @03:26PM (#35213570) Journal
    Did they just wait around for Murdoch's The Daily experiment for this []? Is this just round two of wait-for-third-parties-to-develop-apps-and-then-hold-them-ransom like with eBooks []? What's next?

    If I were a mobile app developer I'd be asking myself right now if it's a smart idea to try to plan a viable business plan around iOS right now. Any good will you build by bringing people to iOS with your app is totally overlooked by Apple while any customers "they bring" to you runs a hefty 30% Apple tax.

    I think it's highway robbery but I'm okay with it because I didn't buy into that bullshit. I bought into Android and instead of lording my decision over everybody I'm just going to remind everyone that the long run has been predicted [] by many industries []. Apple and Blackberry will remain as niche players but it's going to be an Android future. So go ahead and hold publisher's -- who already hemorrhage cash -- feet to the fire. It's just going to hasten your fall.

    Apple sits atop a crumbling marketshare (Schmidt claims 300,000 activations a day []) and their response is to turn the screws on the third parties that set them apart from the competition? Doesn't make a whole lot of sense to me ...
  • by eldavojohn ( 898314 ) * <eldavojohn AT gmail DOT com> on Tuesday February 15, 2011 @03:33PM (#35213642) Journal

    To get 70% of the subscription money, all of the ad money, and have no printing/postage costs actually doesn't sound too bad for publishers.

    Okay but why not just go to the Android Market where you get 100% of the subscription money, all of the ad money, and have no printing/postage costs?

  • 30% forever? (Score:5, Insightful)

    by jaymz666 ( 34050 ) on Tuesday February 15, 2011 @03:35PM (#35213652)

    Is that 30% for as long as they keep renewing or is it 30% for the initial term? How does one determine if it's a new subscriber?

    Also, charging the same price in and out of the apple verse could increase prices for all

  • by MyLongNickName ( 822545 ) on Tuesday February 15, 2011 @03:37PM (#35213668) Journal

    Because Apple does a much better job about delivering a large set of eyeballs attached to people who are already trained to pay out money for cool shiny things. Apple is primarilly a marketing company and they are damn good at it. I am not in their target demographic: young, trendy, willing to spend money for the cool factor. So Apple delivers the right audience for online magazines.

    I suspect most droid users would say "fuck it... I can get the same info for free if I just spend 10 seconds and Google it".

  • by elrous0 ( 869638 ) * on Tuesday February 15, 2011 @03:39PM (#35213694)

    I'd *like* to believe that developers and publishers will stand up to Steve Jobs in the end. I really would. But years of Jobs acting more and more like an thuggish autocrat doesn't seem to have hurt his indie cache in the slightest. Pretentious college students still act like owning an Apple makes than freedom fighters. Most people still associate buying an Apple with sticking it to the man, somehow. And no one seems to care about all the heavy-handed shit that Apple has been doing behind the scenes.

    Years after Bill Gates started doing charity work and Jobs started locking down all his new platforms, who is it that's still villainized on /. ? You don't see Steve Jobs as a Borg, do you?

    And now that you can buy an iPhone on Verizon, I think it will only get worse (since a lot of people I know only bought Android because they hated AT&T's shitty network).

  • by fuzzyfuzzyfungus ( 1223518 ) on Tuesday February 15, 2011 @03:45PM (#35213746) Journal
    Was anybody seriously expecting the app store not to degenerate into blatant rent seeking?

    The original deal, while compulsory(which is not a good sign) was a 30/70, where apple took 30 in exchange for hosting the thing, transaction handling, etc. The fact that that was the only deal in town was a bit skeezy; but it was certainly a boon for the indies who couldn't or didn't want to deal with logistics themselves.

    At this point, though, it's a pure money grab. Hey, Amazon, want to offer customers the ability to purchase ebooks(downloaded from your server, linked to their amazon accounts, through the kindle application)? 30% of that is ours, and you aren't allowed to charge a higher price in-app to make up for that. You don't like that? Well, it's a nice app you've got there. It'd be a pity if it were to suffer a cryptographic revocation accident, Capiche?
  • by Albanach ( 527650 ) on Tuesday February 15, 2011 @03:51PM (#35213840) Homepage

    A magazine has much better control of their costs as they are typically being distributed by the publisher directly.

    This move by Apple is intended to punish Apple's competitors, that's other distributors and in particular Amazon. There's no way Amazon can afford to give Apple a 30% cut of sales, since their margin is significantly lower than that.

    Other subscription services could also suffer. Will this extend to Pandora/Spotify etc? Again there's no way they could afford to give apple 1/3 of their subscription fee as their margin is going to be lower than that.

    Apple really want content producers to make direct deals with them, cutting out the middlemen that are making money on Apple's platform. Cutting competition lets them keep prices, margins and profits high.

  • by h4rr4r ( 612664 ) on Tuesday February 15, 2011 @03:56PM (#35213902)

    The Best OS? Which one? And based on what?

    The best manufactured hardware? Foxxcon will build at whatever quality you want for anyone. Product Engineering is just slapping COTS stuff together in a shiny case.

  • by Nerdfest ( 867930 ) on Tuesday February 15, 2011 @04:05PM (#35213980)
    The fact I can't charge less for it somewhere else? While not quite a monopoly, they're abusing their market position.
  • by jpmorgan ( 517966 ) on Tuesday February 15, 2011 @04:55PM (#35214534) Homepage

    70% revenue for a customer pool of millions of iPhone and iPad users is better than 100% revenue for zero of them.

    It's not when you only have a 5% profit margin. When you're losing money on every unit sold, you can't "make it up in volume."

  • by BasilBrush ( 643681 ) on Tuesday February 15, 2011 @05:01PM (#35214610)

    It's certainly the best mobile OS. And it's a variant of the best desktop OS.

  • by node 3 ( 115640 ) on Tuesday February 15, 2011 @05:22PM (#35214858)

    "Crumbling market share"?

    Android is not going to ever be a coherent, lucrative market. Very few people buy an Android phone specifically for Android. They buy it because it's the best phone on their carrier (Verizon), or because it's the cheapest option that provides an app phone.

    That is not a good foundation upon which to build a thriving market.

    Apple, on the other hand, is making each and every decision which this in mind. And because they can exert greater control over their system than Google can over theirs, they can succeed in ways that Google cannot. That also means they can fail in ways Google cannot, but looking at Apple's track record, it's not exactly rational to bet against Apple.

    Every loudly proclaimed complaint about Apple is based on one of the only two strengths of Android. Specifically, "freedom from control". That definitely appeals to geeks, who love to customize the shit out of everything. But 99+% of everyone else not only doesn't care about that, but is glad to let someone else take care of those details for them. This in-app requirement is a perfect example of this. As an end-user, I'd much rather have a simple, single, built-in system that I can use to buy everything on iOS, rather than have to keep track of dozens of different accounts, subscriptions, and logins.

    This thing that you are imagining is only going to hasten iOS's demise is a perfect example of the very thing that strengthens iOS. How many sales do you think Amazon and Hulu and the rest lose because of the added annoyance of signing up for yet another account? Using in-app purchasing removes that roadblock. But it goes further and adds a boost to sales as well by being so convenient that there will be people who make spur-of-the-moment sales (such as Hulu+, thinking "what the hell, it's only $10, and I can easily cancel, why not give it a try?").

    That's something most geeks cannot seem to understand, or worse, they deride it as avarice (on Apple's part) and stupidity on the consumer's part.

    For completeness, the other advantage of Android is hardware choice, and Apple has absolutely nothing to fear here. Any advantage in hardware choice is all but entirely theoretical outside of the geek crowd.

  • by BasilBrush ( 643681 ) on Tuesday February 15, 2011 @05:45PM (#35215092)

    I've taken apart an iMac a Macbook and an iPod. I'm well aware what's in them.

    And no, they are NOT the same as everything else. In the same way that all buildings are not the same just because they all use off the shelf construction materials.

  • by aztektum ( 170569 ) on Tuesday February 15, 2011 @06:34PM (#35215606)

    I'm more OK with how Jobs acts than MS.

    Apple has real competition in Android, webOS maybe and diehard BB users will only switch when you pry it from their cold dead hands.

    The tight control Jobs likes to have over at Apple, for the most part, only impacts Apple users. Don't like it? Go elsewhere.

    OTOH, MS used its position to control, or attempt to anyway, the entire consumer computer industry and more. Don't like it? Well fuckin' tough.

    If you don't like the policies don't buy the phone. You have no room to complain if you haven't bought in. If you did buy in, well you did so of your own accord. Enjoy the Kool Aid.

  • by digitallife ( 805599 ) on Tuesday February 15, 2011 @06:36PM (#35215622)

    Yes, that is why my wife just gave our daughter her iBook from 2003, still in perfect working order. I don't know about you, but my non-apple laptops from 2003 have held up much better. Wait...

Houston, Tranquillity Base here. The Eagle has landed. -- Neil Armstrong