Publishers skeptical of Apple iPad business model
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.
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.
Comments
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.
"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!
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.
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.
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.
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.
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.
The newspaper and magazine NEEDS a new model, if it is to survive. And frankly, I hate newsprint ink on my fingers.
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.
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.
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.
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?
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.)
I haven't heard of a single major record label going under though.
You can't kill that which is already the living dead. ;^)
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.
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.
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?
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)