Sports Illustrated says unfair iPad subscription terms led to cut features - Page 2

This is just a stupid negotiation attempt on SI part. They think that if Apple believe this will be a poor user experience and the only way SI could support multiply modes of view is to increase subscription prices then Apple will fall over.

SI is barking up the wrong tree and all that will happen is people point out the fact that other magazines are not having any issue.

You guys are reading WAY too much into this.

The reason to go horizontal only is that the designer was making a choice between three options: simply reproduce the magazine as a replica edition (portrait), redesign the magazine for the iPad as portrait, or redesign the magazine for the iPad as landscape. The fourth option -- produce files for both portrait and landscape -- would take more manpower. Remember, SI is a weekly publication, the designer has very little time to turn the print edition into something iPad owners would want on their tablets.

In this case the designer decided to go horizontal only because it works best for the majority of photos.

As for the designers comments concerning subscription prices, I don't think he is in any position to judge the issue. For one thing, SI survives on ad revenue, not its subscription revenue. For another, if Time Inc. wanted to raise the price there is nothing stopping them -- Apple does not set the price of publications, publishers do. They simply take their percentage -- and at 30% that is small compared to the prices publishers pay to print and distribute their paper copies. Remember, the cost to print and distribute a magazine generally exceeds the revenue brought in from readers -- that is why magazines contain ads (that's why magazines discount their annual subscriptions -- the pages sold to advertisers are worth more if the circulation is high, and the product sold to advertisers is YOU, the reader).

If you use PDF it's no problem with portrait or landscape. Portrait gives you the single page, landscape the whole spread. You can password-protect PDFs. And link to videos etc. in them. Adobe intended this to be a good platform for publishing - I think they should be able to develop it into a full-fledged subscription platform as well. (Maybe they just got too absorbed in the Flash-thingy though...?)

Your routinely trollish tone is a matter of record here. Your self-serving defense of same fools no one.

Yeah, they seriously need to get over this, especially their font fetishes. This SI landscape only nonsense is exactly what happens when you try to apply the conventions of the old onto new media. The web/html have been around for approximately 20 years now, you'd think people would begin to learn how to use them.

(Another of the evils of Flash/PDF: It's been used as a crutch by print designers and has retarded development of design native to the medium.)

You're missing the point. Apple doesn't need help to sell the iPad and it certainly doesn't care if SI tries some other distribution method. The sheer volume of iPads that will hit the market in a very short period of time means Apple holds all the cards. I don't think you understand the significance of a product that is only a few months old requiring production to ramp up to an excess of 2 million units a month.

Publishers, Adobe and others might publicly put up a fuss but Apple gets to call the shots on this one.

yes, but if a year [56 issues] is $40 [at 82% off cover price], HOW MUCH of that cost is in printing and delivery?

how much are people willing to spend on an iPad subscription? $40? doubtful.
$20? possibly, but apple will be taking 30%.
how much less will their advertisers pay in comparison to the print version?

i don't know the numbers any more than anyone else here does, yet everyone is posting that SI is being cheap.

Their waffling just keeps the door open for lower cost, and equal quality product offerings to take the lead.


I think this is the real sticking point. They can't prove their numbers to advertisers without demographic data... however, they could simply offer incentives for Facebook logins instead, which would connect them with rafts of personal information.

I don't understand what is unfair about requiring everyone to pay the 70/30 revenue split. If SI don't want to pay Apple then they should initiate the subscription sign up through their website and not use Apple In App Purchase feature. Others are doing it.

Obviously, you are right. But you are missing the point about Newtron and his ilk. He displays an oppositional personality. Anything you say, no matter how sensible and rational, he will counter. Snarky personal insults are part of the fun for him. It's not about sharing ideas, it's about winning by having the last word.

Agreed... but, since that's the case, ignore him and others like him.

You're the fool if you believe SI will not rolling along just fine without Apple. People are not stealing magazines in large amounts the way music was being stolen so any comparisons to the music industry is dumb. There are WAY more sports fans than iPad owners so I know SI will cater to them more readily than to Apple. BTW who said print media needs saving? SJ? So that means it must be true? Please. Apple needs the publications more than they need Apple. There are other tablets on the horizon and if they give they give publications a better deal guess who they're gonna go with and customers/subscribers will follow suit.

You've put your finger on it, particularly in your initial comment. These companies are deliberately playing out their politics in public, in the hope that customer complaints will sway the negotiations in their direction. It's kind of pathetic. We've seen the same tactics used in the fight between networks and the cable companies over how much the networks charge. The networks run big advertising campaigns to try to persuade subscribers to essentially demand that the cable providers raise their rates. The sad thing is, it seems to work. Not in this case, I hope.

Some real numbers to chew on: SI has a rate base* of around 3.2 million -- the Magazine Publishers Association (MPA) says its annual circulation is 3,158,101 (2009). You can then guess the revenue coming in from subscribers based on what you think they are getting per subscriber (and newsstand copies, which are low in comparison, except one a year -- swimsuit edition!).

The MPA also estimated SI's ad revenue last year at $560 million (down over $80 million from 2008). Ad revenue estimates tend to run high (no one gets the page rates printed on the rate card, so the revenue number is always lower than that estimated by outsiders).

Nonetheless, you can see that advertising revenue is always going to be a lot higher than revenue coming in from readers. (Most magazines have an even higher percentage of their revenue coming in from advertising than SI. SI actually does a good job getting people to pay to read the product.)

Many publishers today are convinced that they should charge readers for access to their web and mobile/tablet products -- they feel burned by the fact that they have "given" away the web for free these past dozen years. At the same time they are doing a poor job of selling advertisers on the value of this new readership. (While they recognize that advertisers pay the bills associated with print products, they want to make sure readers on the web, smartphones and tablets get used to paying for access to content. )

The key here is this: Apple has made it relatively easy to charge for access to content (whether through paid apps, or in-app subscription purchases). But it is the job of the publishers to get advertisers to pay for ads appearing in the tablet edition -- and that is hard at first because advertisers and their ad agencies want real numbers to look at.

So when all those folks paid to access that first issue of Wired the magazine was able to get $$ from readers -- but since advertisers knew that the first day that app appeared in iTunes the circulation level of that iPad edition was zero they probably were not willing to pay for their ads to appear in that first iPad edition -- so the ads were either heavily discounted or given away.

It is hard to set ad rates when you don't know how many people are going to download the app. As a result, it will take time to get real numbers and present them to the ad community. That's why, for now, the readers are being asked to pay the freight (so to speak).

* Rate base: the level of circulation the magazine promises advertisers it will have. Ad rates are based on this number, if the actual circulation falls below this by too much the advertisers will expect a rebate.

True for now, but this segment is brand new. Just as Android has made huge inroads in the smartphone market and is iOS's biggest threat, we'll see the same issue with tablets. No matter how great your device is, if you have weaker content it'll eventually peter out. Not today, not this year, but a couple of years down the road you'll find yourself in second place or worse.

You're attempting to have a reasonable conversation with a troll? Good luck.

I really don't believe this is true. Looking at the great products delivered over the past 10 years, and the excellent ratings Apple receives on customer service, I would say that apple does everything for the consumer's sake, because it is good business. This leads to the shareholders being pretty happy as well. As a long time Apple consumer and shareholder, I can tell you I am pretty satisfied in both categories. Most restrictions I've seen imposed seemed to be placed in the interest of the consumers.

2 bad quarters and we'll see how well your position holds...

Fortunately, we most likely will never get to test this theory.

650+ posts since joining in August sure appears to be a full time job.

Yay, someone in a forum with REAL INFO to share, not their rants and opinions. thanks, TNM.

i agree that end users need to foot the bill until the ads sell at a rate that will cover production and distribution [here, distribution = apple] However, it's tough selling ads when users can skip them, and users don't want annoying pop-ups or "your video will begin playing in 30 seconds"

He get's payed by google.

Microsoft was accused some years ago of paying bloggers to post blogs and comments to support Vista. If someone does the same now, it could explain this obsession to post 6 comments in a row instead of just one with several quotes. More posts = more $$$. Just a thought... (So use the ignore list to stop being annoyed by this).

The ads can just be imbedded in the page like regular paper magazines. I have never read a mag on an iPad so I am not sure how they lay things out now but sticking in ads should not be too tough. They can charge per issue sold until things take off and they have more stable sales. Obviously for the iPad or other tablet versions to take off they need subscriptions of some sort or much lower single issue prices. Hopefully the publishers and Apple will eventually work out the issues.

Why not just reproduce the print magazine in iPad format with the same content and the same adverts. Savings made on printing, distribution and retail would go towards Apple's cut. It's a win win.

P.S. Seems odd for a predominantly pictures based magazine to go landscape mode only. Given the iPad's relatively small screen the pictures would look better in portrait mode.

I wonder what they call 'a reasonable price'. Is it the same as they are charging for paper. Is the issue that they don't want to do this newstand style where you download the app, perhaps even for free but have to in app each issue for the same price that you would get a paper copy. Are they peeved that Apple doesn't support buying subscriptions in the store and thus they have to set up some kind of user validation system on the web for folks to pay on the web and then log in inside the app for their issues. Are they mad that Apple still wants a cut of the money.

But then again in conventional print media, people used to flip the page if there is too much advertisement, or they tend to simply overlook them. I am still convinced, that well done ad's can improve the overall user experience of a digital magazine. And I am sure the way apple plans this to do will finally work out. Right now we simply witness the struggle of child birth. This is a process that takes more than a couple of weeks. It's a whole revolution.

I like magazines and newspapers and I think they play an important role in society, so I hope they find an online business model that works for them.

I just don't think anyone knows what that is yet.

This is not the first time that the model of paying for internet content has flopped. I see none of these publishers as offering anything exclusive. I can get equivalent or better information for free.

Unless they offer something compelling, I don't think that "pay to view a website" will ever be popular.

Newtron, why do you keep visiting this site and making such stupid comments? Who is it that you are trolling for? Apple has created a multi-billion dollar channel for the music industry, instead of ALL online music being pirated. And they are now giving the publishing industry the opportunity to open up completely new channels for their products. The reality is that we don't know what Apple is negotiating with them. What we do know is that these are old dogs in the publishing industry that seem to be having problems learning new tricks, and meanwhile their businesses are tanking. Using the news stand rate for single issues is not going to cut it for online content and that is what the publishers seem to want.

Maybe Apple needs to loosen their restrictions a little bit and keep the content providers happy. Without content providers, the App Store, iBooks, and iTunes are just meaningless programs. The fact of the matter is, tablet computers are a fledgling market that Apple has a large foothold in, but they're at risk of having Google come in and once again eat their lunch, as they're doing with cell phones. By ripping Apple off in the design category while letting content providers have their way, Google has taken massive strides in just the last few months.

Sure, Apple's restrictions have some benefits, but when you're too strict and you're alienating or angering your content providers left and right, the bad press alone can cost you in the long run.

I'm sure Apple allows publishers to sell their own subscription plans through their own website, instead of in app if they have an "existing digital business".

That's basically how things like the Kindle app work.

S.I. could include a section on their website where you log in to view digital copies of the magazines, and they could charge for it (or it could be free with the print copy). They could then offer a free iPad app that distributes iPad formatted magazines to their paying digital subscribers for no additional charge and Apple would take no cut of their revenue.

They are only running into problems because they want to use Apple's in app purchasing system without paying for it.

F*** SI!
It is time for us to make our own interactive magazines for use on the ipad. Bot what a stupid move by them greedy bas****!

From the Audit Bureau of Circulation Report for 2007:

''Among the top 25 magazines in terms of total paid and verified circulation, only AARP (with a membership-based paid circulation of 23.4 million for its bimonthly magazine) showed an increase of more than two percent over the second half of 2006. Time (-17.57%) Playboy (-10.04%) and Reader's Digest (-7.64%) all showed significant drops in overall circulation.''

so no, stealing is not the issue - relevancy is.

Here, at this link is a graph reviewing subscription rates and ad revenue rates:
http://www.businessinsider.com/the-e...decade-2009-11

The decline of the print industry is a fact that is well-established and has been reported ad nauseam in the business and mainstream press for some time. Where have you been??

All print houses are reporting losses in subscriptions as well as ad revenue - with the notable exception (wait for it - it's not SI!) of Everyday with Rachel Ray - which grew 61% YOY. Get your facts straight so your comments can have some measure of relevancy.

Being a brand new segment, Apple gains nothing from running around appeasing partners who are less plugged into where this is headed than Apple itself probably is. What reason does Apple have to conclude that SI has the slightest idea of how to do this right.

The rest of the industry took on the convenient, portable computing segment and came up with the netbook. Apple in contrast conjured up the iPad. Frankly, Steve Jobs is right to pay little heed to what others operating in the same business want. The others have consistently gotten it wrong.

I try to imagine what the digital landscape would have looked like had Apple gone under a few years back, just prior to the second coming of Jobs. Bleak. Very bleak.

Naw, the point was clear. But it is silly.

Apple will always try to sell MORE iPads. Apple DOES care when one of its intended promotional vehicles is stalling and sputtering.

This ain't some sort of black and white situation in which the iPad is either "selling enough" or "not selling enough". At any level of sales, all things being equal, the manufacturer desires increased sales.

And if the magazine subscription ploy is not working very well, Apple cares very much. It will negatively affect potential profits.

Keeps what up? Saying that $5 for a single electronic issue is too much?

But the publisher wants you to pay $5 an issue! So they try to blame Apple in some way.

They want to charge 12 times the price of an individual print issue for a subscription when you can usually get a print subscripton for $10-$20 a year.

i agree completely, but "well done ad's" is a subjective term - in my humble opinion [see how i bolded that and didn't abbreviate it] the iAd for the Nissan Leaf is a huge waste of time. i don't care about some story line of the 2411 peace pod antimatter chip helium on the moon teleportation space elevator electric spacecraft blah blah blah. show me what you want to sell me, why i would like it, and do it fast. if you've clicked on an iAd, you're in the middle of something [the app with the iAd]
the same goes for digital magazines - show me a QTVR instead of a still picture, give me a good hook for a headline, and give me a link for more info.

Not for anything before about 2 weeks ago. Said convertor was banned until then.

But yes,many of the magazines perhaps including SI, simply jpg/png/pdf up their magazines and call it a day.


If it's just basically a PDF of the paper version, Apple is probably right. And remember that as the 'store' a lot of the negative response falls back on Apple, not the developers. So when Joe Q buys that SI or whatever issue and it blows he'll be demanding a refund from Apple, not Time Inc. Thus Apple feels they have a vested interest in making sure consumers aren't being flat out reemed.


Nix everything after printing. Because the rest is done by wholesalers and the cost to the publishers is minimal


Your attempt at sarcasm is clouded by the idiocy of the comment.


Again, the idiocy of this is outstanding. Of course Apple works for the consumer's sake, because the consumers are the ones buying the product. And those purchases are what credit the value for the shareholders.

Now please move along. Playing devil's advocate would be one thing, but playing idiot (without the savant) serves no one.


I read somewhere that even under such a plan, the companies have to pay the cut to Apple if the subscription is for content going to an iDevice. People is apparently getting away with it because the 'additional cost' for iAccess is zero. The money is all for the paper version and wasn't raised to cover the extra access.


Apple would probably be willing to provide some demo data to them. They just don't want to have scores of it going out, particularly with details like your email or credit card details attached. imagine the damage someone could cause with a fat stack of user emails. They could phish the list with some 'itunes' email and there will always be folks that fall for it.


Yes but are they actually buying magazines or just going online for the free stuff


Actually it was the major media that said that sales are down in droves. Add to this several magazines folding due to high costs, some buyouts and bankruptcies and print media finds itself in a crisis.

Except with the App Store it's predominantly the business to consumer direct. Apple is just a mediator.

Who's stopping Sports Illustrated from making a portrait-viewing app?

It's meant to be read in landscape? I mean, is an mp3 meant to be heard only on a $3,000 audiophile system? Just put it in portrait if it's viewed in portrait and let people pinch-and-zoom.

If MacLife, tons of magazines on Zinio, and, at worst.... "Print to PDF" can make a readable magazine on an iPad, I'm not sure what the issue (hah pun unintended) is.

These publishers are overthinking it. They keep thinking users want something super fancy with lot of videos and clickable thingys. In time, maybe. But for now, we just want the darn magazine in a simple-to-view format which is fast to download, easy to read, and cheaper than the print version. It's not rocket science. Zinio's not perfect, but hey, it's pretty much what people expect for digital magazines (maybe just slightly higher-res pictures).

I think greed is an underlying factor. The publishers are thinking, OMG, there are this people, with expensive iPads, so, yeah, let's go charge them more...! More money! Yeah! So they try and "deliver more value" by making these convoluted digital magazines with bells and whistles, and then end up finding out it ain't that easy and people are not willing to pay a premium for something everyone expects to be cheaper.

On this point I am curious... How is Apple restricting their subscription model? Because of the cut Apple takes on each app or each in-app purchase? Can anyone clarify? What are Apple's actual current restrictions on subscriptions?

Thank you for the informative and insightful post.


Magazines are not just about "info". If you want raw info, disable styles in Safari or check the stock quote listings in the daily paper. Magazines are heavily visual - photos, illustrations, charts, etc. - packaging all that visual content (along with article text) into a particular page size & orientation takes skill & work. The iPad has two orientations, so two sets of layout considerations & constraints. Even iOS apps have to have two sets of UI layouts.

It seems perfectly reasonable to me for SI (or any other publisher) to restrict their layout to one orientation.

- Jasen.