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Apple tells newspapers: no free iPad edition for print subscribers

post #1 of 103
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A number of European newspapers have reportedly been told by Apple that they can no longer offer paid print subscribers free access to an iPad edition through the App Store, as the subscription strategy leaves Apple out of its 30 percent cut.

According to a report issued Friday by deVolkskrant (via Google Translate), Apple has employed "stricter rules" for publishers, informing them that they cannot offer free iPad access to paid print subscribers. By offering free access to print subscribers, newspapers could avoid charging for access through the iPad, and can avoid paying Apple a 30 percent cut of all transactions on the App Store.

In addition, nrc.nl reported Friday (via Google Translate) that Apple will no longer allow newspapers to offer free access to print subscribers after April 1. Content providers are upset with the change, characterizing the move as one that makes Apple "too dominant."

The alleged changes sent out to publishers by Apple come as the company is believed to be working on an update to iOS, its mobile operating system that powers the iPad, that will allow recurring subscriptions for software on the App Store. It is Apple's preparation for the new subscription option that is believed to have allegedly delayed the release of The Daily, a new iPad-only newspaper from media giant News Corporation.

While a number of reports from overseas claim that Apple has contacted publications to inform them of the changes, no such reports have yet emerged from any newspapers in the U.S.

It's possible that the application programming interfaces necessary to allow recurring software subscriptions through the App Store could be a part of the currently-in-beta iOS 4.3, though the first build of the software released for testing to developers this week makes no mention of such a feature. Rumors have suggested the iOS 4.3 update could be publicly released in March.

Apple is rumored to show off the feature, along with The Daily, at a forthcoming event in San Francisco. Numerous reports have indicated that Apple Chief Executive Steve Jobs will share the stage with News Corporation CEO Rupert Murdoch at the San Francisco Museum of Modern Art.
post #2 of 103
Hardly a show stopper!

The print price can be reduced by $0.70 and they can charge $.99 via iTunes App Store.
Apple gets it's 30% of $0.99, publisher gets the same revenue, and customer pays $0.29 more.
post #3 of 103
Isn't this the same model Netflix works on? You pay Netflix for instant streaming then get the Netflix app for free. Each month, Netflix gets their membership fee and Apple gets Zilch. Or is there some other agreement with Netflix? Not making a judgement either way, just noting the similarity and wondering if there's more going on there.
post #4 of 103
Quote:
Originally Posted by beakernx01 View Post

Isn't this the same model Netflix works on? You pay Netflix for instant streaming then get the Netflix app for free. Each month, Netflix gets their membership fee and Apple gets Zilch. Or is there some other agreement with Netflix? Not making a judgement either way, just noting the similarity and wondering if there's more going on there.

Netflix isn't offered in "print". Newspapers could still offer a free iPad addition to digital subscribers, which is why I don't understand what the big deal about subscription pricing is. If newspapers make a digital version viewable on the web or on other devices, they don't even have to think about giving Apple a cut or negotiating all these subscription pricing details.
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post #5 of 103
Quote:
Originally Posted by beakernx01 View Post

Isn't this the same model Netflix works on? You pay Netflix for instant streaming then get the Netflix app for free. Each month, Netflix gets their membership fee and Apple gets Zilch. Or is there some other agreement with Netflix? Not making a judgement either way, just noting the similarity and wondering if there's more going on there.

Interesting point, there are countless apps in the app store that make money in a way that does not give Apple a cut.

Netflix and Hulu+ being two of the most obvious.
post #6 of 103
"Oh by the way, that thing that you offer to attract subscriptions for which we don't get a cut but we let you have for free? --They won't be free anymore."

Oh bad, greedy, selfish Apple! Bad Apple!
post #7 of 103
Quote:
Originally Posted by cmf2 View Post

Netflix isn't offered in "print". Newspapers could still offer a free iPad addition to digital subscribers, which is why I don't understand what the big deal about subscription pricing is. If newspapers make a digital version viewable on the web or on other devices, they don't even have to think about giving Apple a cut or negotiating all these subscription pricing details.

According to the article, apparently they do need to give Apple a cut or their app isn't going to be in the App Store. The comparison to Netflix is a good one. Apple gets nothing from them, even though it's a subscription service. It's unclear how newspapers are any different.
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post #8 of 103
If this is actually Apple's reasoning here, it is a bit much. cmon Steve, sometimes letting something go to help build an ecosystem is a good thing.
post #9 of 103
I wonder how long it will be before Apple is sued or decides to be reasonable and reduce it's 30% cut on the revenue. This high a percentage is just not called for and is abusive.
post #10 of 103
Then. Let. Them. Distribute. ePapers. Without. The. App. Store!
post #11 of 103
Quote:
Originally Posted by Wonder View Post

Hardly a show stopper!

The print price can be reduced by $0.70 and they can charge $.99 via iTunes App Store.
Apple gets it's 30% of $0.99, publisher gets the same revenue, and customer pays $0.29 more.

That would hardly work, as it assumes that every print subscriber wants the iPad app. The only way I could see that happening is for the paper to continually monitor print and app subscription lists and cut off print subscribers who don't keep up with their app subscriptions. I really don't see why they should be forced to do that, since the existing model is already in use across a wide variety of print periodicals. That is, print subscribers get access to premium web content.
post #12 of 103
Not cool. I get NYTimes for free on my iPhone. Why shouldn't I get it free on my iPad if NYTImes wants to give it to me?
Apple products- so cool, Apple Inc- soo controlling.
post #13 of 103
Quote:
Originally Posted by iLiver View Post

Not cool. I get NYTimes for free on my iPhone. Why shouldn't I get it free on my iPad if NYTImes wants to give it to me?
Apple products- so cool, Apple Inc- soo controlling.

The NY Times is going to start charging for their iPad edition. The service is free only during the intro period. It seems they or anyone else could continue to give it away (as does NPR, for instance), but not load the cost onto a print subscription so as to avoid giving Apple a cut. That's the way I read it.
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post #14 of 103
Quote:
Originally Posted by Corato View Post

I wonder how long it will be before Apple is sued or decides to be reasonable and reduce it's 30% cut on the revenue. This high a percentage is just not called for and is abusive.

I love the way people without a clue are so eager to prove that.

The average cut that a retail store gets is 50% of selling price. Even other online electronic distribution systems are typically in the 30% range (look up what Google and Amazon and everyone else does).

There is absolutely nothing illegal about charging a lot of money for a service. If the market, on average, was such that distributors kept 95% of the revenue, then keeping 95% would not be illegal.

The only remote argument that could even possibly made involves abuse of monopoly power. To win that, you'd have to prove:

1. Apple has a monopoly (considering how much the Android and RIM folks are bragging that Apple is just a minor player, this will be hard).

2. Apple abused its monopoly position for illegal gains. The most common way to do that would be to argue, for example, that they gave a better price to people who didn't use Android Store. Since that's not the case (everyone has the same terms, as far as we know), winning such a case would be nearly impossible.

It's easy enough to get around it. As someone suggested, the paper could offer a $.99 discount to people if they sign up for their electronic subscription and then charge $0.99 for a lifetime subscription on iTunes.
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post #15 of 103
This is just one side of the story, but disagree strongly with what's been described here. I'm hoping there's a good explanation from Apple for it.
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post #16 of 103
Put it like this: Why keep on dealing with paper at all? Why should I have to get paper copies sent to me? I do not want them!!! Period.

Instead I would like the journalists to allow me to purchase/subscribe to their news thru a App on my iPad.
post #17 of 103
This is so ridiculous it couldn't be true. I don't believe it.
post #18 of 103
Quote:
Originally Posted by Smiles77 View Post

This is just one side of the story, but disagree strongly with what's been described here. I'm hoping there's a good explanation from Apple for it.

Yup

Just a guess- if the updates and daily feed is hosted by Apple, by all means Apple has a right to the cut of the subsciption or charge a fee etc (which I suspect is the case).

But, if the hosting and updates are coming from someplace else... and Apple is just being a bully because it can (we are the only game in town, take it or leave it), that would be a monopolistic practice which people tend to not like(*cough* Microsoft).

As an aside - I don't know about periodical 'apps'. Why not just password access to web sites and have ability to save content pages or something. Either way your downloading a lot of info.
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post #19 of 103
Quote:
Originally Posted by Dr Millmoss View Post

According to the article, apparently they do need to give Apple a cut or their app isn't going to be in the App Store. The comparison to Netflix is a good one. Apple gets nothing from them, even though it's a subscription service. It's unclear how newspapers are any different.

I agree. This is weird, if true.

Something tells me that this story is fishy. Let's wait and see.
post #20 of 103
For one time purchases it is 30%
for in-app subscriptions, apple will charge closer to 10%
post #21 of 103
Not good to me. If Apple allows offline subscribers to view free online via iPad then it's one more selling point for Apple and may lead some to buy the iPad. But if those subscribers know they must pay online AND offline that may lead some to not buy. Especially if other tablet makers allows subscribers to view free on their tablet - could be a decision point for some. Not me cuz I'm not an avid newspaper/magazine reader, but for some it will. What happened to making things easier and accessible to your users? Especially if they can do it on their PC! Sounds like a greedy money grab to me, think of the money they may lose on sales to other tablets.
post #22 of 103
Quote:
Originally Posted by jragosta View Post

It's easy enough to get around it. As someone suggested, the paper could offer a $.99 discount to people if they sign up for their electronic subscription and then charge $0.99 for a lifetime subscription on iTunes.

what would stop one of your customers from then canceling their print subscription?
Now that customer never has to pay again.

The true solution is a real in-app subscription API for apps.
Apple understands this.
Apple does not want to kill these publications but it does want to bring them into the 21st century.
This is just like the record companies that wanted to preserve the past and cling to their antiquated models.
post #23 of 103
Quote:
Originally Posted by Dr Millmoss View Post

According to the article, apparently they do need to give Apple a cut or their app isn't going to be in the App Store. The comparison to Netflix is a good one. Apple gets nothing from them, even though it's a subscription service. It's unclear how newspapers are any different.

Are the newspapers distributing their own content like Netflix does? You only get the viewer from the App store. (Plus Apple maybe getting a kickback from Netflix to allow Netflix on AppleTV, so perhaps Apple is willing to let them have their app in the App Store for free.)

Or is the newspaper content distributed via the App Store as an application update with that day's edition? In that case Apple is hosting and distributing their content for them and they should get a cut.
post #24 of 103
Quote:
Originally Posted by Wovel View Post

Interesting point, there are countless apps in the app store that make money in a way that does not give Apple a cut.

Netflix and Hulu+ being two of the most obvious.

The difference is Netflix and Hulu are not a dying industry.
Print is. They need to transition to true digital distribution to survive.
Apple is willing to help them upgrade their business plan to the 21st century.
Apple will only ask these companies for a very reasonable percentage in exchange for it's services.
post #25 of 103
The Daily will be Apple's poster child for the future of print publications.
The iPad is the future of print.
Apple will show them the way forward.
post #26 of 103
Quote:
Originally Posted by Corato View Post

I wonder how long it will be before Apple is sued or decides to be reasonable and reduce it's 30% cut on the revenue. This high a percentage is just not called for and is abusive.

Why do I keep reading about developers who say this is a very fair portion to pay for what they get? Oh, I see, first post. Probably last post. Never mind.
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post #27 of 103
Quote:
Originally Posted by Corato View Post

I wonder how long it will be before Apple is sued or decides to be reasonable and reduce it's 30% cut on the revenue. This high a percentage is just not called for and is abusive.

I'm not sure what to think about this issueand I've learned not to necessarily believe what is written by other people about Applebut what you wrote here is utter bullshit. Apple has a right to charge what they want for people to sell through their store. And more to the point, 30% is quite reasonable, not only as a profit split compared to other industries, but also given the fact that Apple isn't making bank off the App Store anyway.
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post #28 of 103
This seems consistent with Apple's desire to initiate the subscription process through the App Store. This could be a reversal of the current standard: you subscribe to the publication through the App Store and get the paper version for free. If you don't have an iDevice you subscribe the regular way and get only the print edition. Elegant solution, but the publishers hate losing the credit card numbers and data on all their customers. That's the rub.
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post #29 of 103
Quote:
Originally Posted by jragosta View Post

I love the way people without a clue are so eager to prove that.

The average cut that a retail store gets is 50% of selling price.

But that's irrelevant because the article is about print subscriptions not purchasing at retail or newsstand.

I subscribe to The Economist so they post me a magazine (pennies for post rather than 50%+ to retailer) and give me access to archives and current issue on the web. Recently they added a free Economist app that enables subscribers to download current issue 'for free'; other magazines and newspapers are doing the same.

It is apparent that Apple hates this, although they don't seem to mind Hulu or Netflix doing this.

Quote:
It's easy enough to get around it. As someone suggested, the paper could offer a $.99 discount to people if they sign up for their electronic subscription and then charge $0.99 for a lifetime subscription on iTunes.

Why should they? I pay my $126.99 per year, which is 64% off the newsstand price ... it's a subscription!
post #30 of 103
Quote:
Originally Posted by boeyc15 View Post

Just a guess- if the updates and daily feed is hosted by Apple, by all means Apple has a right to the cut of the subsciption or charge a fee etc (which I suspect is the case).

But, if the hosting and updates are coming from someplace else... and Apple is just being a bully because it can (we are the only game in town, take it or leave it), that would be a monopolistic practice which people tend to not like(*cough* Microsoft).

Data comes from the magazine and newspapers servers, not from Apple.

Quote:
Why not just password access to web sites and have ability to save content pages or something. Either way your downloading a lot of info.

They already offer password access with cookies to website, if Apple annoys them too much they could just have iPad formatted web-pages. The thing about downloading entire newspaper/magazine means that it works offline too.

You're not downloading much info. The ones I've seen don't include pages of adverts, they're only the articles and artwork, the files are much smaller than you would imagine (text is low bytes).
post #31 of 103
Yet another reason that makes me dislike the creator of my favorite products. Apple sucks when it comes to this crap.
post #32 of 103
I think Apple is on the run to REPLACE print editions. So, the co-existence and even more additional free content on the iPad is contradictory to this aim.
post #33 of 103
Quote:
Originally Posted by Dr Millmoss View Post

According to the article, apparently they do need to give Apple a cut or their app isn't going to be in the App Store. The comparison to Netflix is a good one. Apple gets nothing from them, even though it's a subscription service. It's unclear how newspapers are any different.

Apple gets to sell the standard device for distributing content previously only available in print. This is a short-sighted move. Publications should be treated differently from apps. If publishers can publish electronically for free on other tablets, those tablets get a leg up against the iPad as content delivery devices.
post #34 of 103
Quote:
Originally Posted by wvmb99 View Post

If this is actually Apple's reasoning here, it is a bit much. cmon Steve, sometimes letting something go to help build an ecosystem is a good thing.

The problem is that an ecosystem built on 'free' collapses when you try to monetize it. You need to build a paying user base in the modern economy, not build a user base who are used to getting something for free then start charging them, those users simply leave.
post #35 of 103
They will start entertaining developing the HTML5 version of the reader. No app required.
post #36 of 103
Quote:
Originally Posted by beakernx01 View Post

Isn't this the same model Netflix works on? You pay Netflix for instant streaming then get the Netflix app for free. Each month, Netflix gets their membership fee and Apple gets Zilch. .

It is very possible that Apple is getting something. It might be a blanket payment rather than per person.

Also where is the smoking gun of an email etc about this restriction.
post #37 of 103
There is a bit more complexity here than is apparent in the article:

The issue is giving the content away free to print subscribers while at the same time charging non-subscribers. What Apple seems to be saying here is that they don't want to deal with having a mechanism for free subscriptions within a system where they are processing paid subscriptions for others.

Examples: 1) a free app with free content -- Apple would have no objection; 2) paid app -- no additional charge for content -- again, no objection; 3) free app, charge for content -- again, no objection as long as the subscription goes through the app store; 4) free app, charge new customers for access, print customers get a freebie -- Apple objects.

What Apple objects to is the idea that publishers will do an end run around the app store by giving away iPad content if the buyer agrees to pay for print. Essentially, Apple would be subsidizing print media.

On the other hand, publishers, of course, would like to reward their print buyers by giving away their iPad editions. Part of the problem here is that many media executives want to port over their print content without considering the iPad as a separate medium.

Print publishers are deathly afraid of losing print customers because they are what is driving ad revenue. If everyone migrates to electronic products they are afraid -- and have reason to be -- that they will not make up the revenue. Then they are dead.

Edit: This is one reason why Rupert Murdoch's new iPad publication, The Daily, will not run into any problems: no print paper to worry about.
post #38 of 103
I doubt this story is true.

There is nothing Apple could do to stop them from giving subscribers content for free.

Don't see apple complaining about Hulu plus of Netflix.
post #39 of 103
Quote:
Originally Posted by Dr Millmoss View Post

According to the article, apparently they do need to give Apple a cut or their app isn't going to be in the App Store. The comparison to Netflix is a good one. Apple gets nothing from them, even though it's a subscription service. It's unclear how newspapers are any different.

The article repeatably mentions print and if it suggests anything else it is misleading. My comment is based on how the app store has operated for quite some time. You are free to process transactions on your website if you have an existing digital business. However, if you don't have an existing digital business, you must use Apple's in app purchasing system, subscription or otherwise.

Hulu and netflix work because they are existing digital businesses. Their iPhone and iPad apps are not their primary offerings, they are merely apps that allow you to access their subscription content on the iPhone/iPad in addition to the numerous other digital devices they are available on.

Print newspapers with no digital version who decide to offer an iPad app do not have an existing digital business and thus must use Apple's in app purchasing system (which will soon properly support subscriptions). If you use the in app purchasing system, Apple gets its 30% cut.

The workaround is simple. Offer an online version of your newspaper, available through your website and have users create accounts and require them to log in to access the newspaper. You can charge for the online version, or it can be a perk for existing print customers, it doesn't matter. Once you do that, you have an existing digital business and are free to create an app that requires users to log in to access an iPad formatted version of the newspaper. You're free to handle all the transactions on your website and Apple won't take a cut of the profits.

This is how the app store works and it will continue to work that way for the foreseeable future. If the article has mislead you to believe otherwise, I guess that's the fault of the article.

If it didn't work that way Netflix, Hulu, Kindle, Barnes and Noble, Kobo, crunchyroll, and many many others would not be available for iOS in their current forms.

The Kindle app is the perfect example. You can go to amazon.com and buy as many ebooks as you want and then view them through the Kindle app without Amazon giving Apple a dime. Books aren't too different from newspapers, and rest assured that if Amazon started offering subscriptions, those subscriptions would also show up in the Kindle app just fine.

It's all about having an existing digital business. If you don't have one, Apple will not permit you to set one up just to serve your app, they want you to go through their purchasing system instead. But if you do have one, Apple wants your customers to use iPhones and iPads, so they will allow you to provide access to your paid or subscription content through the app without taking a cut (because they never processed the transaction in the first place).

This serves a practical purpose in addition to the apparent money grabbing purpose. If Apple allowed everyone to manage their own purchases, in app purchases would suck. Each app would require you to set up a new account with a company that you may or may not trust. The user experience would suck.
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post #40 of 103
Quote:
Originally Posted by ihxo View Post

I doubt this story is true.

There is nothing Apple could do to stop them from giving subscribers content for free.

Don't see apple complaining about Hulu plus of Netflix.

With print subscribers it's easy to do. Digital subscribers like those of Hulu and Netflix are a different story.
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