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Publishers skeptical of Apple iPad business model

post #1 of 98
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Apple's revenue sharing plan and unwillingness to share consumer information with content providers have proven to be sticking points with the publishers the iPad-maker is attempting to court.

Apple co-founder Steve Jobs himself reached out to publishers in early February, attempting to convince them to provide their content in a digital form on his company's forthcoming iPad. But according to the Financial Times, those talks have "stumbled."

Another report from the publication noted that talks are "friendly and continuing," but said that Apple's business models would be a radical change for the print business. One unnamed newspaper senior media executive said Apple's reluctance to share consumer data beyond sales volume is "pretty damn close" to being a dealbreaker.

"Publishers have spent decades collecting information about subscribers that influence marketing plans and, in some cases, the content of the publication itself," the report said. "Apple's policy would separate them from their most valuable asset, publishing executives said."

Some publishers also said Apple's revenue model, which gives the content provider 70 percent of sales while Apple keeps 30 percent, does not make much sense for subscriptions. Publishers are also reportedly concerned that they will see the same impact iTunes had on the music industry in 2003, when individual song sales from Apple severely impacted consumer purchases of full albums.

The Financial Times noted that some publishers, such as News Corp's Wall Street Journal, have gotten around Apple's revenue sharing model by offering a free application that allows users to log in to the newspaper's Web site with their subscription. But that "complicated" method isn't as simple as the one-click purchasing of iTunes.

Apple's entrance into the e-reader market has already shaken up the industry before the iPad is even available for sale. The introduction of the iPad has driven publishers to force market leader Amazon into higher prices for new hardcover bestsellers. While books are currently priced at $9.99 on the Kindle, that is expected to rise to between $12.99 and $14.99 by the time the iPad launches in March.

Apple will serve books for the iPad through its iBookstore, due to be a part of the iBooks application for iPad. The software features a 3D virtual bookshelf displaying a user's personal collection, and allows the purchase of new content from major publishers. Like the Kindle, it will offer content from the New York Times Bestsellers list.
post #2 of 98
It might take a little time (the publishing industry is notoriously slow to move), but it will happen. Being so involved with a third party will make the industry nervous, but it really is just a matter of time.

Publishers know that in the years to come they will lose more and more readers to online and digital platforms.... but they, the publishers, will fight tooth and nail to get the best deal from Apple.

Just a matter of time... I can't wait to be able to subscribe to the mags I like via a true multi-media platform.
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post #3 of 98
Quote:
"Publishers have spent decades collecting information about subscribers that influence marketing plans and, in some cases, the content of the publication itself," the report said. "Apple's policy would separate them from their most valuable asset, publishing executives said."

I commend Apple for standing up for OUR RIGHTS! Let the "Publishers" establish their own relationship and extract their information, marketing plans, data, etc AFTER the individual subscribes via the iTunes Store. At that point, it is a personal decision between the individual and the publisher. Apple should in no way give out information about its own individual database!
post #4 of 98
And just what percentage of the price goes towards printing and distribution now? Is Apple's 30% cut that unreasonable compared to that?
post #5 of 98
Quote:
Originally Posted by Evangelist View Post

I commend Apple for standing up for OUR RIGHTS! Let the "Publishers" establish their own relationship and extract their information, marketing plans, data, etc AFTER the individual subscribes via the iTunes Store. At that point, it is a personal decision between the individual and the publisher. Apple should in no way give out information about its own individual database!

I hope you are being sarcastic here…

Otherwise you're saying that only Apple should have the right to access this marketing information. And why should Apple have this right when "we" are not using the iPad for the iPad but as a medium to access the content the providers offer to us ? The iPad is meant to be like a TV : when you're watching TV, you're not watching "Panasonic", you're watching (for instance) "ABC", the same ABC you'll find on a LG or Sanyo or Sony… So the people who should have information about their users are indeed the publishers, whether you like it or not : they are the one providing/finding the content you are interested to see.
post #6 of 98
Quote:
Originally Posted by AppleInsider View Post

Publishers are also reportedly concerned that they will see the same impact iTunes had on the music industry in 2003, when individual song sales from Apple severely impacted consumer purchases of full albums.

Funny, I thought the impact of iTunes was to save the music industry that was at the time on the bones of it's arse. Individual song sales may have impacted album sales, but illegal downloads which people were using because the music industry had ignored digital downloads which the market was ready for were killing them.

Publishing is in a similar position now, but they are doing it themselves. They put all their content on-line for free and have proven unable to find a way to make that pay. Maybe iPad will be the solution to that.

Businesses that are slow to react to what the market want will surely die.
post #7 of 98
Once the ipad is released they will change their tune.
Once people experience it they will be demanding digital copies from publishers.

If that doesn't convince them then the sharp drop in sales over the next year or two should.
post #8 of 98
Quote:
Originally Posted by PaulMJohnson View Post

Funny, I thought the impact of iTunes was to save the music industry that was at the time on the bones of it's arse.

No, iTunes saving the music industry was and still is a BS claim made mostly (and not surprisingly) by Apple fan sites like this one. Traditional sales formats (i.e., CD) are still by and large the most popular format to consume music. If the music industry needed saving as some sites like to claim, they would already be dead in the water considering how small a percentage downloads have accounted for thus far. I haven't heard of a single major record label going under though.
post #9 of 98
Quote:
Originally Posted by Pascal007 View Post

I hope you are being sarcastic here…

Otherwise you're saying that only Apple should have the right to access this marketing information. And why should Apple have this right when "we" are not using the iPad for the iPad but as a medium to access the content the providers offer to us ? The iPad is meant to be like a TV : when you're watching TV, you're not watching "Panasonic", you're watching (for instance) "ABC", the same ABC you'll find on a LG or Sanyo or Sony… So the people who should have information about their users are indeed the publishers, whether you like it or not : they are the one providing/finding the content you are interested to see.

Your comparison is flawed. Please give me an example of how ABC knows who is watching, outside of surveys such as Nielsen. They don't have subscriber or audience member specific information like that. For that matter, Panasonic doesn't have any idea. I don't see how the publisher has earned the right to information that isn't necessary to carry out the transaction. They sold a product, once the money and product has changed hands, that's it as far as I'm concerned. If people want to fill out surveys or log into the publisher's web site, that's fine.
post #10 of 98
This is rich, "...Apple's business models would be a radical change for the print business." This coming from an industry that is basically bankrupt. Magazines are falling left and right. Most newspapers are essentially broke. The Wall Street Journal is one of the few papers that still make money.

The newspaper and magazine NEEDS a new model, if it is to survive. And frankly, I hate newsprint ink on my fingers.
post #11 of 98
Quote:
Originally Posted by Pascal007 View Post

I hope you are being sarcastic here

Otherwise you're saying that only Apple should have the right to access this marketing information. And why should Apple have this right when "we" are not using the iPad for the iPad but as a medium to access the content the providers offer to us ? The iPad is meant to be like a TV : when you're watching TV, you're not watching "Panasonic", you're watching (for instance) "ABC", the same ABC you'll find on a LG or Sanyo or Sony So the people who should have information about their users are indeed the publishers, whether you like it or not : they are the one providing/finding the content you are interested to see.

Perhaps so, but I don't think my TV reports who I am to the channel I'm watching. Cable Networks may at best be able to measure the volume of people watching a show, but not the demographics. I think that's what the Neilsons are for.

Publishers are free to inquire about the demographic information of their subscribers, and readers are free to provide it if they choose, but they are not required to provide it as a prerequisite of accessing that publication.
post #12 of 98
Quote:
Originally Posted by Pascal007 View Post

I hope you are being sarcastic here

Otherwise you're saying that only Apple should have the right to access this marketing information. And why should Apple have this right when "we" are not using the iPad for the iPad but as a medium to access the content the providers offer to us ? The iPad is meant to be like a TV : when you're watching TV, you're not watching "Panasonic", you're watching (for instance) "ABC", the same ABC you'll find on a LG or Sanyo or Sony So the people who should have information about their users are indeed the publishers, whether you like it or not : they are the one providing/finding the content you are interested to see.

I agree with the original poster, publishers should not have access to my information. And plenty of people get that model today when they buy newspapers from newsstands or grocery stores.
post #13 of 98
Quote:
Originally Posted by caliminius View Post

No, iTunes saving the music industry was and still is a BS claim made mostly (and not surprisingly) by Apple fan sites like this one. Traditional sales formats (i.e., CD) are still by and large the most popular format to consume music. If the music industry needed saving as some sites like to claim, they would already be dead in the water considering how small a percentage downloads have accounted for thus far. I haven't heard of a single major record label going under though.

Hmm... Well the statistics I've read say that with the advent of iTunes, digital sales have skyrocketed by 940% since 2004. iTunes has become the largest music retailer in the world. And though no majors have gone under yet, as of today, EMI is on the verge of bankruptcy. Google it.
post #14 of 98
I'm glad they're not getting my info, Apple isn't the only company that she able to access my information but it is the only company that I have allowed to do it. Therefore I have to agree with the above poster, I don't want media organizations allowed to compile me into their marketing strategy using my iTunes information.
post #15 of 98
Quote:
Originally Posted by solsun View Post

Hmm... Well the statistics I've read say that with the advent of iTunes, digital sales have skyrocketed by 940% since 2004. iTunes has become the largest music retailer in the world. And though no majors have gone under yet, as of today, EMI is on the verge of bankruptcy. Google it.

Not sure I'm picking up on what you may be implying. Are you suggesting that digital sales (which have perhaps surpassed CD's in sales) is the reason why EMI is failing? Is there something unique about EMI that I'm not aware of? Are they not making their catalog available for digital download?
post #16 of 98
Quote:
Originally Posted by caliminius View Post

No, iTunes saving the music industry was and still is a BS claim made mostly (and not surprisingly) by Apple fan sites like this one. Traditional sales formats (i.e., CD) are still by and large the most popular format to consume music. If the music industry needed saving as some sites like to claim, they would already be dead in the water considering how small a percentage downloads have accounted for thus far.

I'm a music nut who makes 30-50 purchases a month. The piles of CDs that I own are enormous. And since iTunes and/or Amazon started selling mp3 downloads (not to mention a few other, smaller sites, some of which also provide music in FLAC format), I REFUSE to buy CDs unless absolutely necessary (e.g., small-label classical and electronic artists with no online download outlet -- yet...). The vast bulk of my purchases have come from Amazon, since their prices are typically cheaper than iTunes and the selection is probably a bit larger (though gaps in one store are often covered by the other).

The question of whether or not iTunes "saved" the music industry is misguided; rather, I think iTunes opened the floodgates to online distribution in a manner which had not yet existed. They facilitated a system (as well as competition to that system) which has proved to be very healthy for consumers. (One could obviously argue its "healthiness" for musicians' wallets, though I know a few people who are quite satisfied with their end of the bargain.)

Quote:
Originally Posted by caliminius View Post

I haven't heard of a single major record label going under though.

You can't kill that which is already the living dead. ;^)
post #17 of 98
Quote:
Originally Posted by solsun View Post

Hmm... Well the statistics I've read say that with the advent of iTunes, digital sales have skyrocketed by 940% since 2004. iTunes has become the largest music retailer in the world. And though no majors have gone under yet, as of today, EMI is on the verge of bankruptcy. Google it.

A more important piece of information is the current market share. In the US, iTunes sells 25% of the music, more than the previous market first place, Walmart. So sure, 75% of the music sold isn't iTunes, but it's a good share. However, that's just music, we don't know if it will carry over into books, magazines and newspapers. So far, it still doesn't look like it's carried over into video sales & rentals, otherwise Apple would be spending some time telling us how well that business is going, they haven't in a long time.
post #18 of 98
Quote:
Originally Posted by Curmudgeon View Post

Not sure I'm picking up on what you may be implying. Are you suggesting that digital sales (which have perhaps surpassed CD's in sales) is the reason why EMI is failing? Is there something unique about EMI that I'm not aware of? Are they not making their catalog available for digital download?


No, I'm replying to your comment where you said: "I haven't heard of a single major record label going under though."

I was simply pointing out that EMI is pretty darn close.. That's all.
post #19 of 98
Quote:
Originally Posted by solsun View Post

No, I'm replying to your comment where you said: "I haven't heard of a single major record label going under though."

I was simply pointing out that EMI is pretty darn close.. That's all.

Is there a reason for this? Bad management, recession, or is there a direct link to going digital and DRM-free that the problem?
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post #20 of 98
I'm surprised the talks have stumbled. Obviously the publishers are short-sighted.
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post #21 of 98
Quote:
Originally Posted by Wiggin View Post

And just what percentage of the price goes towards printing and distribution now? Is Apple's 30% cut that unreasonable compared to that?

Amazon earns 65% from each ebook sale, but Amazon agreed to take only 30% under certain conditions. As for printing and distribution for physical books... perhaps someone in-the-know can share some numbers. (I did find some good info on the web: 1, 2)
post #22 of 98
Quote:
Originally Posted by ilogic View Post

I'm glad they're not getting my info, Apple isn't the only company that she able to access my information but it is the only company that I have allowed to do it. Therefore I have to agree with the above poster, I don't want media organizations allowed to compile me into their marketing strategy using my iTunes information.

Are you certain that Apple would not sell that info to the publisher? ISTM that Apple will have something of value, and would be foolish not to sell it.

Apple is no different from any other multi-national corporation.
post #23 of 98
Quote:
Originally Posted by solipsism View Post

Is there a reason for this? Bad management, recession, or is there a direct link to going digital and DRM-free that the problem?


This story has been big in the news recently.. If you'd like to know more, just do a search, you will find plenty of info as to why EMI is in so much trouble.
post #24 of 98
Quote:
Originally Posted by Pascal007 View Post

I hope you are being sarcastic here

Otherwise you're saying that only Apple should have the right to access this marketing information. And why should Apple have this right when "we" are not using the iPad for the iPad but as a medium to access the content the providers offer to us ? The iPad is meant to be like a TV : when you're watching TV, you're not watching "Panasonic", you're watching (for instance) "ABC", the same ABC you'll find on a LG or Sanyo or Sony So the people who should have information about their users are indeed the publishers, whether you like it or not : they are the one providing/finding the content you are interested to see.

I doubt that he was being sarcastic.
Why should they be entitled to my information just because I buy a magazine from them?
In the past, they got this info by having people fill out cards, and by looking at the location of their subscribers.
If Apple started sharing this information without my consent, I'd be pissed.
If the publishers want my info, they can ask for it. I might be willing to share in some cases.
post #25 of 98
Quote:
Originally Posted by JeffDM View Post

Your comparison is flawed. Please give me an example of how ABC knows who is watching, outside of surveys such as Nielsen. They don't have subscriber or audience member specific information like that...

You don't think that cable providers aren't selling viewer information to content providers and cable TV channels?

It may not be specific... which person in a specific place is watching what... but certainly there're plenty of other sources that can be cross-reference with viewing info.

We in the US stopped being referred to as citizens years ago. We're now all consumers.
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post #26 of 98
Quote:
Originally Posted by jeffharris View Post

You don't think that cable providers aren't selling viewer information to content providers and cable TV channels?

It may not be specific... which person in a specific place is watching what... but certainly there're plenty of other sources that can be cross-reference with viewing info.

We in the US stopped being referred to as citizens years ago. We're now all consumers.

The main ABC network itself isn't cable though.

I can see it being done for cable/sat subscribers but I don't go that way.
post #27 of 98
Quote:
Originally Posted by CU10 View Post

Amazon earns 65% from each ebook sale, but Amazon agreed to take only 30% under certain conditions. As for printing and distribution for physical books... perhaps someone in-the-know can share some numbers. (I did find some good info on the web: 1, 2)

I don't think Amazon gets anywhere near 65% of the revenue from eBooks. In fact, at $9.99 for best sellers, they lose about $5.00.

Here is one author's take on eBooks and Amazon. Well worth the read, although it is a bit long.
http://www.tobiasbuckell.com/2010/01...le-via-amazon/
post #28 of 98
Quote:
Originally Posted by LTMP View Post

If Apple started sharing this information without my consent, I'd be pissed.

Oops! You already gave your consent to them. Look at the Privacy Policy:

http://www.apple.com/legal/privacy/

"There are also times when it may be advantageous for Apple to make certain personal information about you available to companies that Apple has a strategic relationship with or that perform work for Apple to provide products and services to you"


"...times when it may be advantageous for Apple"... includes any time someone will pay them for your private information.

Do you imagine that Apple would not throw you under the bridge to make a buck? Do you imagine that iSteve is a good person? Do you think that Apple exists for any reason other than to extract money from you, any way it can?

Please.
post #29 of 98
Quote:
Originally Posted by LTMP View Post

I don't think Amazon gets anywhere near 65% of the revenue from eBooks. In fact, at $9.99 for best sellers, they lose about $5.00.

here is one authors take on eBooks and Amazon. Well worth the read, although it is a bit long.
http://www.tobiasbuckell.com/2010/01...le-via-amazon/

I think it's both, the $5 loss appears to be for best sellers (called a loss leader), the 70 (Amazon) / 30 (publisher) split for other titles.

But it's not going to be true anymore once Amazon aligns itself with the new sales model.
post #30 of 98
absolutly agree. Looking at it from above, it makes not much sense to distribute content on physical media when your customers have iPAD like devices, where you can publish richer content electronically.

And btw: since I travel alot, I canceled all my magazine subscriptions.
I am reaLly looking forward owning an iPad and subscribe to a variaty of mags again.
I will for sure subscribe to more magazines than I did in the past when they came on paper.

Just like I never bought more music than I do now - not having to cope with CDs, Cassets or LPs anymore - i want the content, not the containers

Quote:
Originally Posted by MacMad View Post

It might take a little time (the publishing industry is notoriously slow to move), but it will happen. Being so involved with a third party will make the industry nervous, but it really is just a matter of time.

Publishers know that in the years to come they will lose more and more readers to online and digital platforms.... but they, the publishers, will fight tooth and nail to get the best deal from Apple.

Just a matter of time... I can't wait to be able to subscribe to the mags I like via a true multi-media platform.
post #31 of 98
Quote:
Originally Posted by icyfog View Post

I'm surprised the talks have stumbled. Obviously the publishers are short-sighted.

Just as with the Music industry, the TV and Movie executives, the print media is full of arrogant CEOs that have too much pride to admit they need Apple to save them (ok help them). Their arrogance is partly the reason for their downward spiral to begin with. It is hard for these people to ask for help. I bet their shareholders have a different view on things though. In fact if the iPad does show some promising results in the first two years, you will have many shareholders demanding to know why their company is not on board instead of refusing a life preserver as they drown.

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post #32 of 98
Well I for one, will be canceling my WSJ print subscription as soon as the iPad is released....I know I can read it online but I already spend too much time in front of my iMac for work and don't enjoy reading anything on it or my macbook either for that matter. But I know I will enjoy the 'touch' aspects with the iPad.

Every Magazine better get onboard with the iPad or their days will be numbered!
post #33 of 98
Quote:
Originally Posted by caliminius View Post

No, iTunes saving the music industry was and still is a BS claim made mostly (and not surprisingly) by Apple fan sites like this one. Traditional sales formats (i.e., CD) are still by and large the most popular format to consume music. If the music industry needed saving as some sites like to claim, they would already be dead in the water considering how small a percentage downloads have accounted for thus far. I haven't heard of a single major record label going under though.

CD sales greater than digital, where'd you get that info? http://arstechnica.com/media/news/20...al-by-2016.ars
post #34 of 98
Quote:
Originally Posted by AppleInsider View Post

Apple's revenue sharing plan and unwillingness to share consumer information with content providers have proven to be sticking points with the publishers the iPad-maker is attempting to court.

Apple co-founder Steve Jobs himself reached out to publishers in early February, attempting to convince them to provide their content in a digital form on his company's forthcoming iPad. But according to the Financial Times, those talks have "stumbled."

Another report from the publication noted that talks are "friendly and continuing," but said that Apple's business models would be a radical change for the print business. One unnamed newspaper senior media executive said Apple's reluctance to share consumer data beyond sales volume is "pretty damn close" to being a dealbreaker.

"Publishers have spent decades collecting information about subscribers that influence marketing plans and, in some cases, the content of the publication itself," the report said. "Apple's policy would separate them from their most valuable asset, publishing executives said."

Some publishers also said Apple's revenue model, which gives the content provider 70 percent of sales while Apple keeps 30 percent, does not make much sense for subscriptions. Publishers are also reportedly concerned that they will see the same impact iTunes had on the music industry in 2003, when individual song sales from Apple severely impacted consumer purchases of full albums.

The Financial Times noted that some publishers, such as News Corp's Wall Street Journal, have gotten around Apple's revenue sharing model by offering a free application that allows users to log in to the newspaper's Web site with their subscription. But that "complicated" method isn't as simple as the one-click purchasing of iTunes.

Apple's entrance into the e-reader market has already shaken up the industry before the iPad is even available for sale. The introduction of the iPad has driven publishers to force market leader Amazon into higher prices for new hardcover bestsellers. While books are currently priced at $9.99 on the Kindle, that is expected to rise to between $12.99 and $14.99 by the time the iPad launches in March.

Apple will serve books for the iPad through its iBookstore, due to be a part of the iBooks application for iPad. The software features a 3D virtual bookshelf displaying a user's personal collection, and allows the purchase of new content from major publishers. Like the Kindle, it will offer content from the New York Times Bestsellers list.

Anytime they sell you something online, they want to collect personal information for folllow-up marketing and to sell your information to others who might want to sell you something. It's the same way you get spam- if your name is out there, they'll try to contact you, whether you like it or not. They don't believe in privacy- i.e. "don't call me, I'll call you." Apple is trying to be more ethical with their customers, by providing reasonable prices and protecting their privacy. The publishers are hungry for money and, with their print business model failing, the same way the music industry lost their CD money cow operation, they want to assure they profit for the simple act of hitting the download tab. If they act like pigs, they'll have done to them what Napster did to the music companies.
post #35 of 98
As a customer, I don't want information about me to go any further than necessary, and that means restricting it from the maker of whoever's product I buy. That also means that I wouldn't want that information to go to a publisher when I buy one of their ebooks. On the other hand, as someone who reads an author's books, I'd like to know when other books come out and, as a writer, I'd like readers who are willing to hear about other books I may be working on. What is the solution?

Apple might learn a lesson from one of Amazon's many programs and allow Apple-mediated contacts with purchasers from both publishers and authors. It'd be an option when someone buys an ebook or begins a subscription. Apple would retain the contact information, but publishers and authors would be able to make contact via Apple. And customers would be able to end that contact anytime they wanted via a preferences page.

It'd be a win-win situation for all parties.

--Michael W. Perry, author of Untangling Tolkien
post #36 of 98
Quote:
Originally Posted by solsun View Post

Hmm... Well the statistics I've read say that with the advent of iTunes, digital sales have skyrocketed by 940% since 2004. iTunes has become the largest music retailer in the world. And though no majors have gone under yet, as of today, EMI is on the verge of bankruptcy. Google it.

So, I must be missing something in your comment. From what you said, despite the massive rise of digital downloads (and iTunes), music companies are still in trouble. Again, sounds pretty clear that iTunes hasn't managed to "save" anything.

Quote:
Originally Posted by Doug Halfen View Post

I'm a music nut who makes 30-50 purchases a month. The piles of CDs that I own are enormous. And since iTunes and/or Amazon started selling mp3 downloads (not to mention a few other, smaller sites, some of which also provide music in FLAC format), I REFUSE to buy CDs unless absolutely necessary (e.g., small-label classical and electronic artists with no online download outlet -- yet...). The vast bulk of my purchases have come from Amazon, since their prices are typically cheaper than iTunes and the selection is probably a bit larger (though gaps in one store are often covered by the other).

What are trying to say? Why do you REFUSE to buy CD's? It seems like a really weird thing for a self-proclaimed "music nut" to do. Wouldn't you want your music in the highest quality format you can get it?

If you're trying to make the point that you've gone completely to digital downloads, what does that prove? From you stating that make 30-50 purchases per month (I'm assuming an album is a purchase, not one track), it's clear that you are a statistical anomaly to begin with. I'm the exact opposite. I try to avoid purchasing digital downloads whenever possible but then I only purchase maybe 3 or 4 CD's per month. Most of my download purchases are Amazon's Deal of the Day $2.99/$3.99 albums. The remaining few are tracks that are only available via download.

Quote:
The question of whether or not iTunes "saved" the music industry is misguided; rather, I think iTunes opened the floodgates to online distribution in a manner which had not yet existed. They facilitated a system (as well as competition to that system) which has proved to be very healthy for consumers. (One could obviously argue its "healthiness" for musicians' wallets, though I know a few people who are quite satisfied with their end of the bargain.)

The comment I responded to was making the statement about iTunes "saving" the music industry. Maybe the OP was misguided, but my point is still the same: the iTunes Store has not saved the music industry. I won't dispute that iTunes has perhaps been very good for spurring legal online distribution.
post #37 of 98
Quote:
Originally Posted by Doug Halfen View Post

The question of whether or not iTunes "saved" the music industry is misguided; rather, I think iTunes opened the floodgates to online distribution in a manner which had not yet existed. They facilitated a system (as well as competition to that system) which has proved to be very healthy for consumers. (One could obviously argue its "healthiness" for musicians' wallets, though I know a few people who are quite satisfied with their end of the bargain.)

You've made the point I think I was aiming for, only much better!

Had Apple not come along and sorted out a sensible model for digital downloads, illegal downloads were going to do untold harm to the music publishers. In that sense, I think iTunes saved their industry, as everything they were doing themselves was nothing short of a joke.

Obviously they also don't help themselves by publishing so much teeny pop crap!!!
post #38 of 98
Quote:
Originally Posted by ejlenny View Post

CD sales greater than digital, where'd you get that info? http://arstechnica.com/media/news/20...al-by-2016.ars

Note that is projected for 2010. There appears to be evidence yet that digital distribution has actually overtaken CD sales.
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post #39 of 98
Unlike book publishers, magazine and news paper publishers make the bulk of their money from advertising revenue. The cost at the news stand, or subscription costs, are there to cover the cost of dead trees and the costs associated with delivery of the physical product.

The way advertising pricing is computed for a specific publication is based on subscriber numbers, news stand sales numbers, the base demographics of the geographic locations of a subscriber base and the much more specific demographic information provided by subscribers and others who fill out survey cards.

There are many other sources of information that goes into the aggregate statistical universe used to justify to advertisers why they would benefit from purchasing an advert in a specific publication for a specified price.

That's how it works in the print industry. The information about readership flows back to the publishers in several ways.

Now, the electronic content delivery method comes along and removes the cost of dead trees and physical delivery of the publication. It gets replaced with any of several methods of delivery.

A publisher can build and maintain their own delivery mechanism, such as what Baen Books did. That allows them to become a conduit to their readers and even offer that service to other publishers, ie.. Tor, Del Rey, Nightshade, etc..

Most of the costs for the self distribution method are up front capital costs associated with the initial buildout of the web site, the work flow for content conversion, and management issues involved in getting all of your content creators into the system and working efficiently towards a new delivery mechanism.

A second delivery conduit is for a publisher to outsource electronic distribution to someone like Apple, Amazon or B&N in much the same way they outsource single issue sales to brick and mortar stores. They sell to the stores at a discount off the cover price, the stores then sell for some percentage markup over that, usually up to cover price. In this method, the publisher preps the electronic issue in the format required by the outsourced distributor and provides the digital copy to them. This is, essentially, identical to the way books are provided to the companies that actually print the dead tree versions.

The Agency model that has been discussed recently, and apparently is being adopted by both Apple and Amazon, removes the frontloaded costs of purchasing copies of a publication at discount from a distributor who delivers those copies to a store front for sale to customers. Since there is no appreciable cost to the retailers (ie.. Amazon, Apple, B&N) for each copy until that copy is sold to the reader, the original wholesaler model doesn't work. For this reason, the Agency model is preferable. There are quite a few articles that go into great detail about the Agency model out there. Check Scalzi's blog for one of the better ones.

All that being said, the magazine and news paper industry rely on advertising within the publication for most of their revenue. The business model for electronic readers for those kinds of publications in no way changes that primary source of revenue, nor does it change the conduits for demographic information that revenue source relies upon.

There is a huge potential in e-readers to allow an extremely granular level of user profiling, demographic information, and other information that can be useful for advertisers, content creators, interface designers, and everyone else involved in the creation of the publications.

This is, ultimately, something that will have to be negotiated between the publishers and the *readers*, not the hardware manufacturers. Just as with current business models, if the publisher wants demographic information more specific than X sales in Y geographic region, they'll need to go to the readers themselves for it.

Saying that Apple is denying them that information is FUD of the worst sort and does nothing more than alienate the very readers they want to get that information from.

-- Scott
post #40 of 98
Quote:
Originally Posted by icyfog View Post

I'm surprised the talks have stumbled. Obviously the publishers are short-sighted.

Or maybe they prefer letting Amazon keep 65-70%.

I doubt if Amazon is giving them the customer information, either.

Quote:
Originally Posted by CU10 View Post

Amazon earns 65% from each ebook sale, but Amazon agreed to take only 30% under certain conditions. As for printing and distribution for physical books... perhaps someone in-the-know can share some numbers. (I did find some good info on the web: 1, 2)

Amazon's restrictions are unacceptable for many people. If they're worried about losing control to Apple, signing Amazon's agreement would be infinitely worse.

Quote:
Originally Posted by iGenius View Post

Are you certain that Apple would not sell that info to the publisher? ISTM that Apple will have something of value, and would be foolish not to sell it.

Unless you've opted out of that on Apple's web site. Then they can't sell it.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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