MAD and other magazines subscriptions on the iPad are still a long way off…
Apple’s recent announcement of a subscription service within their App store seems like a step in the right direction towards the digital delivery of magazines and newspapers on iPad or similar devices, but as many are pointing out their business model is unworkable.
Back when the iPad came out, I wrote this post about how I saw the future of magazines and newspapers being tied to tablet devices like the iPad and it’s successors. The portability, form factor and ease of delivery of content solved most if not all of the inconveniences of switching from printed form to digital for the consumption of magazine and periodical content. The only holdup was a lack of an iMag Store, where tablet owners could go to get subscriptions to their favorite magazines, or browse for ones they might want to buy single issues of or subscribe to. There is still no such store, but Apple has finally decided to allow publishers to sell digital subscriptions through their apps. The caveats are that Apple gets 30% of all subscription revenues, that any subscription deals offered outside the app are matched or beaten by offers inside the app (no offering cheaper prices outside and cutting into Apple’s share), no mandatory acquiring of reader’s name, e-mail address or zipcode (advertising data) and no links in their content to outside places to buy stuff (i.e. no clickable ads to stuff not under Apple’s 30% umbrella).
Needless to say, publishers are not pleased. So far only Rubert Murdock and The Daily are on board. I don’t see anyone else joining the club.
The 30% arrangement is impossible. Some may argue that it’s no different than the overhead of real newsstand, but it is a lot different overall. Selling single issues on the news stand, which is priced at top dollar is meant only as an impulse buy to the browser, traveler or person looking for something to read while waiting for a meeting. Magazines don’t make money from single issue newsstand sales, even at those exorbitant prices. Cheap subscriptions and the ad revenues that come from a definable reader base are what magazines have been making their money from for decades. Apple’s business model makes that impossible.
There is a digital magazine subscription model that seems to be working. Zinio had been around for a decade and has a business model based on accommodating the needs of publishers, not dictating they conform to a computer company’s idea of how the publishing business should work. Zinio has had modest but very measurable success using their model. Right now Zinio has an app on the iPad, but that is likely doomed under Apple’s new subscription service.
Apple’s iPad has a big headstart on the tablet market as it was first to the scene and no one can argue that Apple does gadgets better than anyone. However tablet devices are going to be a lot more than portable movie machines and web browsers. They will be the way people carry their entertainment content around with them, and get it delivered to them, in the near future. Print media may be floundering but the desire for the content they provide is not… merely the way that content is delivered. Apple’s draconian demands on content providers like their latest subscription service and their refusal to allow Flash on their device browsers is going to be their downfall. If Google or some other company comes up with a digital newsstand allowing publishers/media to provide digital subscriptions to their magazines, newspapers, TV shows and the like in an iTunes Store type place, and allows the providers of the content a way to cash in on their wares, I think people will abandon the Apple device platform and follow the content. The “halo” effect of wanting to pair a Mac with an Apple device is already disappearing, with the devics themselves providing the gateway to the internet and content.
Need further proof this is or might be happening? The Richmond household is as Apple supportive as they get. We have under our roof 3 iMacs, 3 Macbooks, 1 MacBook Pro, 2 Apple TVs, 4 iPhones, 3 iPads and I lost count how many iPods. Steve Jobs should personally come to my house and make us dinner. Yet, when the time comes to consider a new tablet, I am going to start with anything that ISN’T the iPad and go from there. That should tell you something.
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