The iPad has been on the market for a year now, and we’ve had a chance to see how it is being used in the market. Certainly games and videos are doing extremely well. Unfortunately, as it turns out, early optimism about the iPad saving the publishing industry, especially publishers of magazines and periodicals, has not panned out. Instead, early booms in purchase of such publications proved to be mere bubbles of one-off purchases.
Apple’s claims to saving the periodicals industry were initially revivified over the last few days as the technology company announced opportunity for iPad users to subscribe to e-periodicals, rather than buy each edition separately. Thus far, only The Daily, published by Rupert Murdoch’s NewsCorp, has signed up. Will others follow?
Early indications are ‘no.’
Many complaied that they had to buy this magazine twice
Part of the skepticism seems to come from the ‘history’ of sales of magazines on the iPad thus far: those sales plummeted by the fall of 2010, even as sales of the device soared. One of the causes of that fall likely was the irritation consumers showed in having to pay for individual e-magazines, even if they also subscribed to the hard copy.
If that irritation were the concern of the new subscription service, then one could easily imagine a few months of market adjustment that would indeed help the publishing industry: People would allow their paper subscriptions to lapse as they bought into solely e-subscriptions. Numbers (and customer ratings) would likely rebound by the end of this calendar year.
But demand is not the only issue. Suppliers are much more skeptical of Apple’s ‘willingness’ to allow subscription services, probably because Apple expects a 30% cut in subscriptions purchased via the App:
In this second coming of Apple, publishers will find a new figure to be disappointed by: 30 percent. That’s the cut Apple plans to take for itself. In the words of Apple CEO Steve Jobs, who took a break from his medical leave (at least in press release form) for this special announcement: “Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.” (From Nicholas Jackson’s post on The Atlantic.com)
But the publisher is not allowed to offer better deals outside the Apple app, which means the customer can do one of two things: click on the (free) app and have his/her already-established App-Store Account do the rest, or go to the website and enter name and billing information before returning to the magazine’s app to get the first issue.
Of course the subscriber will go through the app, and Apple will get its 30% cut. What’s not to like? What publisher would not be thrilled to lose 30% of the sale right off the bat, even as the publisher is producing all the value?
Alas, we probably should not be surprised by the 30% claw-back. A similar demand was put on any iOS application’s income that might have helped raise money for philanthropic organizations. As we have posted before: such demands have pretty much killed off any charitable activity on Apple’s iOS platform.
Just like in the charity-app market, Google responded to Apple’s strong-arm subscription tactics with its own service for Android phones: One Pass. One difference is that Google allows publishers to tap into its services like “Google Checkout,” but does not dictate how the subscription services are drawn up or what is charged for the content.
Then again, Android-driven hardware still does not enjoy the culturally-cool cachet that Apple’s products have. So though the service seems much more friendly to publishers, they might not see enough of a market to make significant moves in that direction.
Please let us know what your e-subscriptions experiences have been like. Have you begun reading e-publications? On which device?
