Apple Store newspaper headlock may be slipping

There was praise aplenty last week when Steve Jobs stepped aside as Apple CEO. Jobs was lauded as the saviour of newspapers and the man who halted the "inevitable" trend towards unpaid or low-paid production of free digital media. But like the Marshall Plan aid, the Jobs Plan aid came at a very high price. Newspapers don't …

[Anonymous Coward]

What next?

Apple proxy where all Apple products have their data going via Apple to ensure they aren't getting content that Apple are making money from?

It wouldn't suprise me, as Apple owners are stupid enough to let it happen, like they let iTunes happen.

[Stewart Knight]

Stick it to the man!!

Nice to see someone stick it to Apple, but don't forget Playboy did this 1st!

[Anonymous Coward 101]

Surely...

Playboy would be 'sticky from the man'. Ho ho.

[Anonymous Coward]

Does anyone know...

...how much real, paper newspapers are sold to retailers for, compared to their face value?

I'm just wondering how bad a deal this 30% is or isn't.

[Charlie Clark]

Not a fair comparison

30 % would be pretty low for a retail channel but that isn't what at stake here.

This is about subscriptions which publishers love to own not just because of the lower overhead of maintaining the sale but also because of the direct relationship with the customer which is good for getting demographic information for advertisers and allows cross-sales of other publications or services. Apart from the potential data protection issues, it is plain bad business sense to share this hard won data with another company.

[Yet Another Commentard]

Margins

A quick google shows it's around 20% for a dead tree retailer. I have no idea how the sale and return side works.

Mind you - a read of "Power Without Responsibility" is heartily recommended, it sets out the complexities of cover price, distribution numbers, and the real income (adverts) for papers. That's how freesheets (like Metro) survive - it's about ads to vast numbers of people. Each Metro is read by several potentials, so it has lots of ad revenue. We'll skip over it being owned by the Daily Mail.

The online world is different. You can get ads to service a "free" website - witness the dear old reg here - but you need to be careful you don't compete with yourself. It is, as ever, interesting to note the cash the Guardian chucks at its website for little return, indeed the group is in financially troubled waters at the moment. Why would I buy a copy when it's there, more up to date, without charge. Also, with adblock, without ads.

The FT is a bit of a special case - many companies have it almost as a Paper of Record (like a pink London Gazette). It's had a paid subscription website for years, quite successfully too, because of the "proper" journalism in it, and access to really useful and accurate market data.

News International chose to do the same, figuring 100 paying subscribers is better than 1,000 freetards. I have never peeped beyond the paywall so I have no idea if ads lurk there or not for the rest of the revenue.

I am curious how the model works for "The Economist" on iPad. A paper subscription includes the e-subscription. It may present to the Jobsian Cult that the electronic subscription (iPad or website) is nil, so nil is due to it.

I think I had a point when I started, but I've forgotten it now. Sorry about that.

[I ain't Spartacus]

30% isn't bad in itself

It's not an unfair amount of money for the service. Hence app developers have been happy to pay it, as it's probably about as cheap as any other route to market they can use. Payment infrastructure costs, as does the staff time needed to set it up and run it.

So as a system for attracting small software developers to the iPhone it was pretty good, at what looks like a fair price to me. Not so good for larger software houses, who've got all that infrastructure in place already, but then Apple gave them no choice by having the one-true-app-store [tm],..

I think for newspapers/magazines, things are a bit different. Traditionally they charge a cover price, but they also make lots of their cash from advertising. So the more they know about their readers, the more they can charge for their adverts.

To add to the annoyance of Apple skimming off 30% of their subscription money, Apple also tried to enforce the idea that they couldn't up their prices on iOS in order to make that back. So it's charge everyone extra subs or lose money (not an attractive choice). Apple backed down on that - it looks mighty close to (illegal) price-fixing.

But they also want to control the advertising with iAds. And I'm sure that means taking a percentage of that too. So they're attacking both revenue streams. Then, even worse, they refuse to hand over subscriber data. So if I have an FT sub, and re-order it via Apple, the FT have now lost me as a customer. They can't send me a sub reminder at year's-end, or special offer if I stop subscribing, because Apple won't tell them I have. So they've now lost a long-term relationship with a customer, and all chance of cross-selling. If I'm willing to tick that box on the sub form that allows them to market me to 'selected partners' they've also lost a junk mail target. And they've lost info about their readership, so they can't sell their adverts for as much.

That last bit looks worst to me. For a company to voluntarily cede control of its customer list looks pretty suicidal from where I'm sitting.

[a_been]

30% is a good deal but that wasn't the problem

The FT will give you a 30% discout and delive the paper version to your door. So it works out cheeper for them to do an app version than a paper one. But that was never an issue anyway, as the FT made clear, the big problem is Apple insisting on an opt-in for subscriber information. The real money for newspapers is in advertising and the more you know about your readers the more you can charge you advertisers. The FT, probably rightly, felt most subscribers wouldn't bother to opt-in.

@Andrew Orlowski,

Stop being a dick with this 30% subscription crap, you know if Apple charged less for subscriptions then every paid for app would become free with with a request that you purchace a lifetime subcription if you wanted to use the app for more than 1 second.

Paris cos, well i'd opt-in

[Anonymous Coward]

I can't help noticing the Flash movie

embedded on the web app webpage proudly headlined "The new FT app for iPad and iPhone"...

[Ian Ferguson]

The most ironic thing...

...is that Apple pushed very hard with the original iPhone to ONLY use HTML5 web apps. Remember those? Apple's web app directory?

And it was only when jailbreakers started showing the native app potential that consumers forced Apple to allow third party native apps at all.

Kind of ironic, then, that Apple's unexpected cash cow turns out to be their undoing.

[Jolyon Ralph]

Premium Register Edition

I really think that a Premium Edition of The Register should be created, and all of Andrew's articles should only be available for those who pay for them.

I totally agree that premium content should be paid for!

[Anonymous Coward]

Self-censorship for freetards :)

Freetards hate having the mickey taken, So how about making all of The Register subscription - it would become a Freetard Exclusion Zone.

I'd pay for that.

[Solomon Grundy]

Me Too

I'd pay for a subscription to The Register. Lots of original content and a fun take on complex subjects. I won't pay for a general news outlet that basically just recycles other content.

[Hardcastle the ancient]

Pricing

I'd pay a fiver a year for access to the reg, provided that the content became free after commenting was locked, so I could link to pages with usenet

[Chad H.]

I'd pay if

Simon Travagalia was required to write more!

[Steve Todd]

Wrong and wrong

"But in practice, Apple doesn't share this information. Nor does it allow publishers to choose their own advertising services: they must use Apple's."

Apple ask subscribers if they want to share their details with the publisher when they sign up. User says no, then they don't get them. Oddly enough many users say yes. Advertising is also not limited to Apple's advertising service (the majority of advert supported apps go elsewhere like Google's AdMob). The only limit is in collection of user identifiable data by said advertisers.

[bdam]

This is exactly the thinking that let Android grow to its current size

Greedy Steve Jobs wouldn't budge on negotiating carrier deals when the iPhone launched, so stuck with AT&T. This let Android in. Imagine what the market share would have been like if the iPhone had been on all carriers from the start! Instead, it stuck there for 2 years whilst Android grew, and only recently has this insane deal been dissolved - but as far as market share is concerned, it's too late. The Android crowd just love this kind of stubbornness - its this same thinking which keeps flash off iOS, not any bullshit tech reason.

[Anonymous Coward]

So...

What's really going on here is that newspapers want your information so they can sell that data on to advertiserers, and here is Apple sitting in the way of that while charging 30% for the privilege. And this is a bad thing....how exactly?

[Anonymous Coward]

And this is a bad thing....how exactly

Well the businesses go bust, so content reduces, so then there is nothing to buy. Good start?

You see a fart app, knocked up in the back room is not the same as employing and paying for 1000's of Jouno's, photographers, investigators, interviewees, proof readers, typesetters etc etc...

[DanceMan]

proof readers, typesetters

Not in today's world.

[Dan 55]

"There's nothing Apple can do"

"An HTML5 app may today just be a glorified bookmark, but it might have much more functionality as HTML5 matures. There's nothing Apple can do to stop publishers distributing them from the web, or even better, a neutrally owned pseudo-app store."

Apart from complying with the spec with Safari but making the experience as unpleasent as possible for HTML apps launched from the home screen.

HTML apps on the iPad are slower than in Safari and offline storage should already be working as it's in the HTML5 spec but oddly isn't.

[Anonymous Coward]

See Proxy comment.

All new Apple products go via The Great Proxy of Apple to ensure you only view what Apple allow you to view...

[Sean Baggaley 1]

Who the hell writes this tripe?

Apple are a HARDWARE company! They make profits on HARDWARE. Not software! Steve Jobs himself has pointed out that Apple have paid out a mere $2bn. to developers *since the App Store opened!* Sounds like a lot, until you consider that the figure covers the period since the native SDK was released... in 2008! That's rather less than $750m / year. Given how many iApps are out there, it's hardly a massive number.

Now consider that Apple only gets to keep 30% of the sales from those apps, and it's clear that the App Store itself is making *peanuts* for Apple.

In fact, compared to the profits Apple makes from selling *physical, tangible, products*, the App Store's revenues are microscopic.

So, no, Apple do NOT care that the FT and its friends are buggering off to HTML5 and the web (where, incidentally, Apple TOLD them to go in the first damned place, when the original iPhone was launched). A website is a far more logical medium than an App. It requires far less maintenance and upkeep, and with Adobe finally getting with the programme, it's no longer the chore it used to be.

*

Developers have to jump through umpteen hoops and deal with Apple's preference for rapidly deprecating features, rather than supporting legacy applications until the heat death of the universe (yes, Microsoft, I am looking at you.) Apple are NOT a developer-centric company, and they never have been.

As far as Apple are concerned, they couldn't care less how you get your content to their customers, so long as those customers *buy Apple's hardware*. Because it's the *hardware* that forms the bulk of Apple's profits. By a truly massive proportion.

iTunes, the various App Stores, etc., are just a component Apple are including as part of their UX design process. They are NOT intended as profit centres in their own right. As long as they break even, Apple are happy.

So please, please, enough with this ill-informed dross masquerading as "analysis". A two-year-old could have seen this coming.

[sabroni]

but...

...who would buy an iproduct with no apps? Apple advertising makes a big noise about the number of apps available and how versatile they make the devices. It's a bit naive to say that hardware sales are the only relevant thing here, the software makes the hardware attractive. An ipad with no apps is an hp touchpad.....

[Anonymous Coward]

I write this tripe

Foxconn is a hardware company (note the lack of caps). Apple is a design... er...advertising...er... patent investment.. er... something company.

[DrXym]

Nothing they can do?

Apple is the platform holder and has shown no scruples about changing the rules in its favour whenever it feels like it. Web apps might be viable today and not viable tomorrow. Apple could impose mandatory limits on web apps for local storage, or downloaded content. It might relegate the app icons to some far flung corner of the UI or some crappy unsorted list. It might cripple the performance of apps so they run poorly. It might do away with icons altogether. It would probably contrive some nonsense reasons for all of these things.

The only way to play their game is not to play at all. One would have thought the media industry would be in a prime position to do this. They, after all produce content that user's consume. They are literally oxygen for the platform, especially tablets. If they preferentially favour a more open rival platform, they will eventually apply enough to force Apple to remove their stupid rules. And if not well the other platform will probably become the dominant force eventually anyway.

[Anonymous Coward]

FT pulled the app, not Apple

According to most main media reports (e.g. Reuters, BBC) it was FT that pulled the apps, not Apple.

By those reports they did it over who an argument of who kept customer data. Apple made sharing the personal details with the publisher a user option and FT wasn't happy with that.

I'm not sure why El Reg is insisting in reporting some other version.

[Anonymous Coward]

elreg776655

FT want to know who you are - Apple were protecting your privacy. Why should FT care who reads their magazine - you can go into a shop and buy it anonymously - but online they want to 'know' who you are.

I'm with Apple on the privacy issue.

Bit like Paypal really - I would rather give my details just to Paypal than every tom-dick-and-harry I might happen to buy products from.

[Ru]

"James Murdoch correctly pointed out..."

There's a phrase you don't hear too often.

[sleepy]

clueless

Of course Apple know what they are doing. They WANT HTML5 to be a viable platform. They also prioritise their relationship with the user - hence the privacy bit. They want content providers to grow up and make business decisions instead of pouting and moaning about Apple's little shop.

And if you think Android is taking over, the latest mobile internet statistics (at marketshare.hitslink.com) shows: IOS 53%; Java ME 21%, Android 16%, Symbian 6%, Blackberry 3%, Windows 0.6%.

[Craigness]

Yes, clueless

They don't let you install apps from alternative app stores. Is that about their relationship with the user?

They don't let app developers use their own billing system. Is that to encourage the use of HTML5?

According to a commenter above, they haven't implemented the offline storage standard of HTML5. Is that so that developers will be forced inside Apple's store, billing system and 30% tax or is it a magical and revolutionary way of making content providers grow up and make business decisions?

Was your title designed to be a warning about your opinion?

[Anonymous Coward]

@Craigness

A commenter above is hardly a great reference especially when most of your argument depends on it.

Apple does indeed support Offline Storage on the iOS Safari. A quick web search will reveal lots of references showing you it's possible and even how to do it.

[magnetik]

Ridiculous

Why should Apple get a (rather large IMO) cut of revenue from subscribed content? Does Sony demand that Sky pay them a cut of advertising revenue every time I watch a match on Sky Sports using my Sony TV?

What's next, Apple demanding a cut of Spotify's revenue every time I listen to some music with that app? How about a cut from eBay when I buy something there?

Stop being so goddamn greedy Apple !