Remember the days when the dot-coms were threating to send ALL brick and mortars businesses the way of the dinosaur?
Guess who is still standing?
Brick and Mortar stores.
Paper FTW
IMHO Brick and Mortar stores are disappearing. So if you look at Amazon, where do they get the sales from?? Brick and Mortar?? They may be standing but not at the same margin as before. Look at consumer electronic stores, how many are still standing?
print media will always have some usefulness to someone but when the tables are turned and there are only 2000 printed subs out there compared to millions, people will ask "why did we ever need printed magazines? who still reads those?"
I believe this can happen. But I don't think it will happen until there's a better way to search for things in the App and Book Stores.
Right now, there's not much in those stores that offer the advantage of a news stand where the magazine is either right in front of your face, or can be found with only a minute or two of searching.
Everything in these electronic stores is buried under everything else.
I'm wondering why so many people bring up the 30% that Apple charges for hosting, distributing, collecting sales and making payments to it's media suppliers.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
30% doesn't sound so bad to me... Coming from the newspaper business I can think of the following expenses that are offset with the iPad.
Printing
Postage
Packaging
Retail markup
We don't really make money on subscriptions, we make money on advertisers. There also is an economy of scale difference here. If a newspaper/magazine grows their print costs still increase. They have to hire more staff for distribution, install or use larger presses, etc. What cost increases the more digital subscriptions they sell???
It may take 2 to 3 years before a real backlash occurs, but it may be more gradual than sudden. As the magazine industry assesses casualties and realizes its place comparing apple against the rest, slowly, one by one, publishers will tell Steve Jobs to go sharpen his pencil.
Quote:
Originally Posted by k2director
I always thought it was insane for a magazine to give away 30% of its sales to Apple, simply for selling through the App Store.
If I were the magazine industry, I would threaten to only support Android until Apple came up with a more reasonable fee.
I'm curious what people think it costs a magazine to distribute a physical copy of their material around the globe? Does the man in the newsagent work for free? Does the delivery boy? Does the lorry driver? Does the printer? I could go on.
These media companies can't have it both ways. They tell us an ebook is as valuable as a printed copy because we're buying the content not the book, then they balk when Apple asks for a cut of the profits they have made entirely due to Apple's complete invention of a new market for them, as well as Apple doing all their distribution for them. So what if there's only a few thousand customers right now, Apple are charging a percentage, not a flat fee!
I don't think the 30% Apple want is being rejected because it is too much; it's being rejected because these companies don't feel Apple deserve it, rightly or wrongly.
The Economist is happy with its sales. Print magazines need to allow digital access, and vice versa. The iPad needs a magazine section. Apple needs to allow cheaper subs if people give details.
The the iPad will make money.
Even popular science is making money. 16000 subs will take the cost of developing for the iPad in about 6 months. All subsequent costs are merely the down load. It is, in digital format anyway, or some kind of XML and data. Once that is worked out the app devs can generate the app version from a "manifest". Recurring costs are zero. Unlike print. Which has to be printed and distributed.
Apples 30% is a lot for re-sellers, for rolling stone, it is a good deal.
Not surprising to me. Before you can subscribe to Popular Science on the iPad, you've got to know Popular Science is on the iPad.
I never knew it until I read this article, and I'm in the iBook Store and the books section of the App Store all the time.
iBook Store doesn't even have a "magazine" category. Neither does App Store. You can search directly for "Popular Science", but unless you're thinking about "Popular Science", you're unlikely to stumble across it.
Isn't a large part of the argument for the 30% given to Apple that the App Store acts as some kind of publicity platform?
I'm wondering why so many people bring up the 30% that Apple charges for hosting, distributing, collecting sales and making payments to it's media suppliers.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
That's becuase it's costly to open a physical store.
If we actually have an open internet, the cost of opening a competing web store to sell digital magazine would be much lower, which means the digital store (in this case Apple's app store) shouldn't charge nearly as much. But obviously, this is not an open OS so that's why Apple can charge the local-monopoly price. Same for Android (which is not really open either).
Also, Apple needs to stop "Rigging" the search lists.
For example, they let about 2 dozen books in the iBooks store have "For sale" dates of 2012 to 2050. This ensures those books are always at the beginning of the list when you browse by release date.
The vast majority of publishers can't use those dates, and are therefore always appearing behind the publishers that Apple allows to use that trick.
<--- Sells books in the iBook Store as well as Apps in the App Store.
Wenner believes it will take decades before magazines on tablet-style devices like the iPad will take off, noting that sales of physical CDs are still a popular form of music even as Apple's iTunes offers more convenience and flexibility.
This dude apparently did too much LSD in the 60's and fried his brain.
Yeah, i love CDs, and haven't yet embraced digital downloads? but even i understand that the CD's days are numbered.
Newspapers, magazines and books are all dinosaurs, and dying even more rapidly than the music industry. The handwriting is on the proverbial wall. Change is afoot.
I'm wondering why so many people bring up the 30% that Apple charges for hosting, distributing, collecting sales and making payments to it's media suppliers.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
Because Apple doesn't do any hosting, distribution, and collecting sales data is a sore point. Publishers want that. it does do purchasing but the publishers can handled that.
If I were the magazine industry, I would threaten to only support Android until Apple came up with a more reasonable fee.
That sounds like a great idea. Especially considering that the last time I checked, people weren't lined up for days trying to buy a Xoom or a Samsung whateveryoucallit, but yet Apple can't fill the shelves fast enough. You, sir, seem to have keen business sense.
As for Rolling Stone, they haven't had anything of value between their pages since the early 80's so who cares really.
Change is hard to swallow for some people. This reminds me of the sea change that happened in the photo industry over the past 20 years. I used to work in the business and remember the comments that many traditional photo companies, including Kodak, had in the beginning regarding digital photography - things like, it's neat, but will never take over film. Or even better, "sure, digital photos are going to take over film the same way that Polaroid took over traditional film developing". They failed to realize that they should have embraced the coming change (even if they didn't believe it would happen the way it did) as an opportunity to do things differently/better/faster.
Some e-magazines have figured out that you can't just turn a print piece into an e-piece as you're missing a lot of value that the digital medium offers. For example, an article about a new band in Rolling Stone could/should offer a clip of a song from the band (or maybe a full "free" song download), maybe video clips from the interview (necessitating interviewers/writers to become more than just the person writing the words), live bio's of the band, up-to-date concert schedule, etc. Advertisers will, at some point, also understand that their ads can be more than just a link to their website and they will be worth paying more for them than what they pay for the print version.
I would agree that there may always be a need for the print version of mags, books, etc if for nothing else than the nostalgia of it. Kind of like how vinyl has a whole new group of followers today, even though they grew up with cd's and digital downloads.
That sounds like a great idea. Especially considering that the last time I checked, people weren't lined up for days trying to buy a Xoom or a Samsung whateveryoucallit, but yet Apple can't fill the shelves fast enough. You, sir, seem to have keen business sense.
The nook (Android platform) currently has 20% of the electronic market. By this I mean they sell 20% of the electronic magazines and books, not that nook devices are 20% of iPad sales.
Comments
I always thought it was insane for a magazine to give away 30% of its sales to Apple, simply for selling through the App Store.
If I were the magazine industry, I would threaten to only support Android until Apple came up with a more reasonable fee.
Hmmm...
70% of sales to users who actually buy, vs 90% from users who want everything to be free.
Tough call.
Absolutely true.
Remember the days when the dot-coms were threating to send ALL brick and mortars businesses the way of the dinosaur?
Guess who is still standing?
Brick and Mortar stores.
Paper FTW
IMHO Brick and Mortar stores are disappearing. So if you look at Amazon, where do they get the sales from?? Brick and Mortar?? They may be standing but not at the same margin as before. Look at consumer electronic stores, how many are still standing?
print media will always have some usefulness to someone but when the tables are turned and there are only 2000 printed subs out there compared to millions, people will ask "why did we ever need printed magazines? who still reads those?"
I believe this can happen. But I don't think it will happen until there's a better way to search for things in the App and Book Stores.
Right now, there's not much in those stores that offer the advantage of a news stand where the magazine is either right in front of your face, or can be found with only a minute or two of searching.
Everything in these electronic stores is buried under everything else.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
Decades...? BWAHAHAHAHAH!!!!
Yeah, someone send this to John Gruber. This is definitely claim chowder material!
30% doesn't sound so bad to me... Coming from the newspaper business I can think of the following expenses that are offset with the iPad.
Printing
Postage
Packaging
Retail markup
We don't really make money on subscriptions, we make money on advertisers. There also is an economy of scale difference here. If a newspaper/magazine grows their print costs still increase. They have to hire more staff for distribution, install or use larger presses, etc. What cost increases the more digital subscriptions they sell???
I always thought it was insane for a magazine to give away 30% of its sales to Apple, simply for selling through the App Store.
If I were the magazine industry, I would threaten to only support Android until Apple came up with a more reasonable fee.
These media companies can't have it both ways. They tell us an ebook is as valuable as a printed copy because we're buying the content not the book, then they balk when Apple asks for a cut of the profits they have made entirely due to Apple's complete invention of a new market for them, as well as Apple doing all their distribution for them. So what if there's only a few thousand customers right now, Apple are charging a percentage, not a flat fee!
I don't think the 30% Apple want is being rejected because it is too much; it's being rejected because these companies don't feel Apple deserve it, rightly or wrongly.
The the iPad will make money.
Even popular science is making money. 16000 subs will take the cost of developing for the iPad in about 6 months. All subsequent costs are merely the down load. It is, in digital format anyway, or some kind of XML and data. Once that is worked out the app devs can generate the app version from a "manifest". Recurring costs are zero. Unlike print. Which has to be printed and distributed.
Apples 30% is a lot for re-sellers, for rolling stone, it is a good deal.
Not surprising to me. Before you can subscribe to Popular Science on the iPad, you've got to know Popular Science is on the iPad.
I never knew it until I read this article, and I'm in the iBook Store and the books section of the App Store all the time.
iBook Store doesn't even have a "magazine" category. Neither does App Store. You can search directly for "Popular Science", but unless you're thinking about "Popular Science", you're unlikely to stumble across it.
Isn't a large part of the argument for the 30% given to Apple that the App Store acts as some kind of publicity platform?
I'm wondering why so many people bring up the 30% that Apple charges for hosting, distributing, collecting sales and making payments to it's media suppliers.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
That's becuase it's costly to open a physical store.
If we actually have an open internet, the cost of opening a competing web store to sell digital magazine would be much lower, which means the digital store (in this case Apple's app store) shouldn't charge nearly as much. But obviously, this is not an open OS so that's why Apple can charge the local-monopoly price. Same for Android (which is not really open either).
For example, they let about 2 dozen books in the iBooks store have "For sale" dates of 2012 to 2050. This ensures those books are always at the beginning of the list when you browse by release date.
The vast majority of publishers can't use those dates, and are therefore always appearing behind the publishers that Apple allows to use that trick.
<--- Sells books in the iBook Store as well as Apps in the App Store.
Wenner believes it will take decades before magazines on tablet-style devices like the iPad will take off, noting that sales of physical CDs are still a popular form of music even as Apple's iTunes offers more convenience and flexibility.
This dude apparently did too much LSD in the 60's and fried his brain.
Yeah, i love CDs, and haven't yet embraced digital downloads? but even i understand that the CD's days are numbered.
Newspapers, magazines and books are all dinosaurs, and dying even more rapidly than the music industry. The handwriting is on the proverbial wall. Change is afoot.
I'm wondering why so many people bring up the 30% that Apple charges for hosting, distributing, collecting sales and making payments to it's media suppliers.
These people always make it seem that Apple is ripping someone off?
Dont they realize that when they buy something in a store... that the store (depending on the location and product) is charging you from 15 to 60 %
Because Apple doesn't do any hosting, distribution, and collecting sales data is a sore point. Publishers want that. it does do purchasing but the publishers can handled that.
Isn't a large part of the argument for the 30% given to Apple that the App Store acts as some kind of publicity platform?
They offer a platform for people to sell things. I'm not aware of any "Publicity" they have other than "Staff Selections" and "New and Noteworthy".
If I were the magazine industry, I would threaten to only support Android until Apple came up with a more reasonable fee.
That sounds like a great idea. Especially considering that the last time I checked, people weren't lined up for days trying to buy a Xoom or a Samsung whateveryoucallit, but yet Apple can't fill the shelves fast enough. You, sir, seem to have keen business sense.
As for Rolling Stone, they haven't had anything of value between their pages since the early 80's so who cares really.
They offer a platform for people to sell things. I'm not aware of any "Publicity" they have other than "Staff Selections" and "New and Noteworthy".
Yes. That. That's worth lots of downloads.
Some e-magazines have figured out that you can't just turn a print piece into an e-piece as you're missing a lot of value that the digital medium offers. For example, an article about a new band in Rolling Stone could/should offer a clip of a song from the band (or maybe a full "free" song download), maybe video clips from the interview (necessitating interviewers/writers to become more than just the person writing the words), live bio's of the band, up-to-date concert schedule, etc. Advertisers will, at some point, also understand that their ads can be more than just a link to their website and they will be worth paying more for them than what they pay for the print version.
I would agree that there may always be a need for the print version of mags, books, etc if for nothing else than the nostalgia of it. Kind of like how vinyl has a whole new group of followers today, even though they grew up with cd's and digital downloads.
That sounds like a great idea. Especially considering that the last time I checked, people weren't lined up for days trying to buy a Xoom or a Samsung whateveryoucallit, but yet Apple can't fill the shelves fast enough. You, sir, seem to have keen business sense.
The nook (Android platform) currently has 20% of the electronic market. By this I mean they sell 20% of the electronic magazines and books, not that nook devices are 20% of iPad sales.
Yes. That. That's worth lots of downloads.
Yes it is. To the 1% of apps and books who get it. "Popular Science" isn't one of them.