Will Publishers Show some Spine with Apple? The Jury is Out

Is it finally dawning on the news business that Apple is not a friend, nor an ally, nor even a partner in any true sense of the world?There are some signs of sanity emerging in the week since Apple announced its terms of engagement for offering subscriptions via mobile apps, rules that were arrogant even by that company’s standard.

To recap: The company’s new in-app subscription rules, issued a week ago in a press release purporting to quote Supreme Leader Steve Jobs, reinforced Apple’s determination to be publications’ gatekeeper in every sense of that word. What took publishers aback was the financial part of the rules: To publish via Apple’s iOS ecosystem — currently the iPhone, iPod Touch and iPad) — news organizations must agree to give Apple a 30 percent cut of every transaction with audiences. Apple had already made it clear that it would take a cut of in-app advertising sales. Moreover, publishers were not allowed to charge a higher price for the app subscription than they do in any other format — and they couldn’t even put a link into the app showing potential customers how to buy subscriptions elsewhere.

This was too much even for some of Apple’s many media-business acolytes. Even so, the most serious protests have come not for news organizations but rather from companies like Rhapsody, which sells music subscriptions and realized that Apple’s plan was either to kill or own their businesses. News organizations, whether out of fear or caution or both, have been largely silent. A few have already acceded to Apple’s demands.

Meanwhile, after having adapted Readability software as part of its Safari browser, Apple refused to allow this tiny startup to offer the same functionality as an app — because that would interfere with Apple’s insistence that it alone will control how anyone makes money.

All of this goes to the bigger picture in the new publishing environment: the need for content creators to recognize that they need to actively seek options. One of the most interesting is Google’s One Pass system, which is more in the category of announcement-ware than reality at this point. The much lower cost to publishers — 10 percent instead of 30 percent — is the most obvious lure. Another, for publishers, is sharing key subscriber information, but if Google is smart it will offer users an opt-out in at least some circumstances.

An interesting experiment is Time’s Sports Illustrated mega-approach, called “All Access,” or a subscription to print plus online versions (other than iPad). The mistake here, I believe, is charging more for a digital-only subscription than a print one. The economics of that approach are good only for Time, not its customers who are not as stupid as the company thinks they are.

The All Access system also gives Time editorial control over what it produces. What remains the most publisher-antagonistic element of the Apple ecosystem is the one thing that most media companies still hate to discuss: To even exist in that ecosystem, they must give Apple — not their own editors — final say over whether the content they produce is acceptable under Apple’s “we’ll disallow or remove it if we don’t like it” rules.

You find not a hint of this, for example, in this week’s “Media Equation” column by the New York Times’ normally sensible David Carr. This isn’t the first time he’s neglected that particular elephant in the room (and the New York Times Co.’s dealings with Apple remain a mystery that gets no comment from the company), but I wish he’d address the issue one of these days, as it’s not trivial and goes to the heart of free speech in an online world.

8 thoughts on “Will Publishers Show some Spine with Apple? The Jury is Out”

  1. But don’t you also think that this is just the beginning. I am assuming that all SaaS companies that have apps in the app store are also going to get taxed by Apple.

    The next step will be to demand a cut of the advert revenue that free/ad supported apps have.

    And it just goes on and on…

    As you know we built ActiveWords on the Windows stack. If Microsoft tried to do this the Apple faithful will be throwing the digital equivalents of Molotov cocktails and would be storming the barricades.

    1. Of course it is. Apple already demands a cut of the ad revenue, as far as I know, by prohibiting the use of in-app advertising that doesn’t go through its own ad system.

      I’m part of the Apple faithful when it comes to the Mac, which has been a terrific computer (not the absolute best hardware, but by far the best combination of hardware, software and service) to own. I’m working on a migration to LInux, now that Apple has dropped one shoe regarding its obvious intention to convert the Mac applications business to an app business.

      And you’re absolutely right: If Microsoft was doing this, it would be universally — and correctly — regarded as unacceptable.

      1. When you migrate back to W7, let me know, ActiveWords is better than ever, and we are a few months away from a really major new version, incorporating all the things we have learned.

        Do you want to connect with my pals at Swype?

        1. My migration path is toward Linux (Ubuntu)…it’s a tough haul to get all the apps running that I need, but I’m getting closer.

  2. Of course Google won’t give people the ability to opt out of having their personal data mined and handed over to publishers. Their entire business model is built on collecting vast amounts of data and selling it to advertisers.

    Apple is trying to sell products. Google is trying to sell me as its product.

    1. Travis…

      Seems to me there are four parts of the Apple transaction.
      a. The hardware, which they have been paid for
      b. The app which they have been paid for
      c. The internet which they didn’t invent/nor should they even dream of charging for.
      d. Products which they didn’t assemble/build/edit or do anything with, and now they are trying to charge for.

      Just curious, is it your custom and practice to either charge for or pay for products that you didn’t create or that someone else didn’t create?

      Or do you think that someone should assert an economic right just because they can? Just curious.

  3. “d. Products which they didn’t assemble/build/edit or do anything with, and now they are trying to charge for.” This is nothing special, it’s called “reselling” — it’s all that most retailers do, with rare exceptions like Sears and grocery store “house brands”. I know it feels good to get all righteous about equal pricing for equal products, but that’s not how a free market works. Apple is selling a purchasing experience, and they have every right to charge “all that the market will bear” to people who want that experience.

    Conventional publishers do far more draconian things to get in between authors and readers every day. It doesn’t take much searching to find newsbites like “Houghton Mifflin Harcourt (HMH), today announced an agreement with Big Ideas Learning, giving HMH exclusive rights to distribute the renowned, researched-based middle school mathematics program Big Ideas Math.” Not a 30% premium, but completely shutting out every other distributor! Can you spell “copyright assignment”?

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