Apple Squashing iPad Magazine Subscription Plans [Updated]
All Things Digital reports on Time Inc.'s struggles with Apple as it has tried to roll out a true subscription program for its Sports Illustrated iPad application, an option that Apple continues to be unwilling to support.
Last month, the publisher was set to launch a subscription version of its Sports Illustrated iPad app, where consumers would download the magazines via Apple's iTunes, but would pay Time Inc. directly. But Apple rejected the app at the last minute, forcing the Time Warner (TWX) unit to sell single copies, using iTunes as a middleman, multiple sources tell me.
Since then, Time Inc. executives "have been going nuts", trying to figure out how to get Apple (AAPL) to approve a subscription plan. One of the more desperate suggestions, which apparently didn't get traction: Pulling the publisher's apps out of the iTunes store altogether.
As the report notes, other entities such as The Wall Street Journal are permitted to bill users directly for iPad subscriptions to their content, and thus it is unclear exactly why Apple is targeting magazine subscriptions so closely. But until the stalemate is broken to allow publishers to offer subscription packages or print-electroinic bundles in some way as most parties seems to desire, it appears that magazine users will be limited to the single-issue purchases prevalent in the App Store today.
Update: We have heard that the holdup, at least in the case of the Sports Illustrated subscription plan, is in fact a dispute over revenue, with Apple maintaining that it should be able to collect a 30% cut of revenue as it does for content distributed through the App Store. Publishers, understandably, would prefer to move out from under the App Store umbrella for their subscriptions and keep 100% of the revenue for themselves.
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As far as the WSJ being able to bill directly and have a subscription app, magazines are new and the WSJ app has been approved. Who is to say that Apple won't force them to follow the same rules that they're putting on magazines?
What is wrong with you all, just greedy little pigs!
As for the 30% cut, I really don't think Apple cares about it. It's just to cover costs. They make their money on the devices and the App store is just to sell more of those.
It's a little suspicious considering the ties Apple has to Disney and Disney to ESPN. Sports Illustrated is likely ESPN's biggest competitor.
Apple likes end to end integration, especially when it not only reduces confusion for users, but makes them money.
They're going to mandate subscription billing goes through iTunes.
Apple would be insane not to work on this right now. Subscriptions are big money and are very consistent. There are a lot of benefits to mandating Apple has some degree of control over subscription signup:
[LIST]
[*]Apple can create a consistent, convenient interface that's consistent for every magazine.
[*]Since the credit card is tied to the iTunes account consumers are always ready to make purchases, and they already trusted Apple enough to give it (and, for the majority, to buy something). They also get a cut.
[*]All sorts of things that could make people upset regarding funky billing or not being able to cancel get put in Apple's lap. Subscriptions under your account in iTunes.
[*]They can mandate a standard way to put out subscriptions, and that'll probably use an API that will allow the iPad to get pushed the magazines automatically.
[/LIST]
Apple, you don't have to do everything, you know. Trying to be the only publisher, distributer, profiter, etc is not the way to go. It's ok to allow other companies to make some money out of the iOS ecosystem. It'll be better for you in the long run if you do.
I know people are going to freak out about Apple being "draconian" and "money-grubbing" but I see this as a legitimate debate because Apple is, in effect, becoming the publisher of the iPad edition of SI or whatever other magazines. Therefore, they have a right to claim money that would otherwise go to the (print) publisher. I'm sure they'll work out a deal -- we'll just have to be patient.
My computer and monitor are "publishers"? :confused:
That's a bit of a stretch.
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