New details have leaked out from Apple’s forthcoming subscription newsstand service, via Shira Ovide and Yukari Iwatani Kane at the Wall Street Journal.Many of the details suggest that publishers are lining up to get screwed. Not that they have much of an alternative.
- The service could be announced in the next month or two but Apple may hold it until early next year, when it releases the next version of the iPad
- Publishers are, wisely, worried that Apple’s inserting itself as the go-to vendor for publications will disintermediate the publishers, the same way it has disintermediated the music companies.
- Apple’s planned service won’t give publishers access to customers’ credit card numbers or other personal info, which means that consumers will basically be subscribing to Apple (publishers will just get the money).
- Apple will take its usual 30% cut
- Apple may (or may not) force the Wall Street Journal, the Financial Times, Zinio (magazine stand), and other companies that have cleverly dodged the 30% cut to stop dodging it. This simple workaround–let consumers download a free app and then pay the publisher directly–was smart. Apple frowns on this practice, but so far has allowed the WSJ and others to do it. If Apple doesn’t enforce the rule, we suspect more publishers will start doing it. If Apple DOES enforce the rule, the WSJ’s iPad business will take a big hit.*
- Apple has had conversations with Time Warner, Hearst, Conde Nast, and News Corp.
- One publisher has apparently committed to using the platform — likely Hearst.
- Hearst apparently thinks having access to Apple’s 160 million iTunes subscribers outweighs any loss of control.
* Peter Kafka of All Things D reminds us that Apple has actually already banned this practice, but for some reason allows the Wall Street Journal and a handful of other folks to do it anyway. This inconsistency is wonderful for the WSJ, but grossly unfair to other publishers who are NOT permitted to circumvent the subscription cut. We doubt it will last.
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