Money Matters, Simplified.
Apple details terms for newspaper, magazine subscription
by Anter Prakash Singh - February 16, 2011 - comments
Apple will play no role in fixing the prices of these apps by the publishers. The company will just process the payments.
Apple Inc. announced Tuesday the terms for newspapers and magazines who wish to sell subscription through its app store. Apple said it will be taking 30 percent of the revenue, the same as it is taking from News Corp’s ‘The Daily’ which is available exclusively on iPad.
In fact, the deal remains the same for almost everything sold through Apple store iTunes.
Terms same as for ‘The Daily’
Thirty percent remains the standard cut for Apple. This will be charged by Apple for selling subscription through iTunes.
However, Apple will play no role in fixing the prices of these apps by the publishers. The company will just process the payments.
“The advantage that Apple has here isn’t just having a large install base of iPads and iPhones, it has a pre existing payment system that it’s letting content companies tap into.”--Yair Reiner, analyst, Oppenheimer and Co.
Apple's CEO, Steve Jobs, said in a statement which was released on Tuesday that their philosophy is simple. “When Apple brings a new subscriber to the app, Apple will earn 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.”
This way, Apple is not preventing the publishers from selling their apps through other sites or on their own sites.
Apple’s large customer base could help publishers
Earlier, Apple offered magazines and periodicals only on a single issue basis.
Now the tech giant has sold millions iPads, iPhones and iPad Touches, and these can be used to read newspapers, magazines and books.
Yair Reiner, an analyst with the Oppenheimer and Co. said, “The advantage that Apple has here isn’t just having a large install base of iPads and iPhones, it has a pre existing payment system that it’s letting content companies tap into.”
Chuck McCullagh, former senior vice president of the Magazine Association of America said that this latest offer from Apple is more publisher friendly.
The one problem McCullagh saw was the insistence by Apple that the publisher should offer the outside subscription for the same price.
This could, “bump into the common publisher practise of selling subscription at different prices across [distribution] channels.”