Apple Preparing to Launch Newspaper Subscription Plans for iPad?

[MacRumors]

The San Jose Mercury News reports that Apple is preparing to roll out support for newspaper subscriptions on the iPad, opening the door for new revenue streams for publishers. The information apparently comes via Roger Fidler, head of digital publishing at the Donald W. Reynolds Journalism Institute, who works closely with many newspapers and has received the information from industry sources.

Apple is expected to announce soon a new subscription plan for newspapers, which hope tablets like the iPad will eventually provide a new source of profits as media companies struggle with declining print circulation and advertising revenue.

Apple did not respond to a request for comment.

According to the report, Apple may be looking to take a 30% cut of subscription revenue and up to 40% of advertising revenue from the digital newspaper content. Apple and major newspaper publishers have also reportedly agreed on an "opt-in" option for subscribers that would allow user information to be passed along to the publishers for generating advertising commitments. Those two items of contention have been seen as the primary barriers to bringing newspaper and magazine subscriptions to the iPad.

Publishers wanted to pay Apple a fee rather than a cut of subscription and advertising revenue, and are not happy with Apple's terms, he said. They had hoped to offer app editions as part of subscription bundles that include print versions of the paper. Instead, they must use Apple as an intermediary with subscribers.

Several publications such as The Wall Street Journal and The New York Times have been able to roll out subscription-based content for the iPad, but the vast majority of newspaper publishers have yet to see access to their e-editions come to the iPad as negotiations over how the subscriptions will be handled have continued.

Article Link: Apple Preparing to Launch Newspaper Subscription Plans for iPad?

 

[leroypants]

And the money sink continues to grow.

 

[WiiDSmoker]

30% is quite a lot on already bad margins for News Paper companies; but ultimately if the print version continues to decline they will have to bend over for Apple.

 

[daddywags214]

And the money sink continues to grow.

Before the internet, everyone who wanted to stay informed had a newspaper subscription. Unfortunately, reporting the new requires a lot of people, equipment, and time... it's not something we should take for granted, unfortunately. There will always be some free news content to read, but it's not outrageous to suggest a subscription model for a quality product that costs money to produce.

 

[blackpond]

Meanwhile, iPads keep selling and improving Apple's position in negotiations...

 

[BlondeBuddhist]

Make it happen!

 

[vini-vidi-vici]

Not sure why this is so difficult

If I buy a paper subscription, I should get the digital subscription "with it".

If I get the digital subscription "only", it should be at a slight discount from paper (to account for reduced overhead costs)

Both deliveries should have basically the same content, but with a digital subscription giving you some better search/link tools, access to archives, etc. Possibly some space for "breaking news", and feedback.

Both paper & digital deliveries should have the same ads - keep it simple. Advertisers buy ads to target readers, and it doesn't matter if the readers are looking at a digital or print copy.

Doing something fancy with ads is going to mess with the layout & presentation of these publications - I'd be surprised if it comes out looking OK.

The main problem appears to me to be someone like apple, trying to get a large cut of the revenue, and breaking this fragile model. Is apple really providing enough service to justify a 30% cut? I like apple, but I think not...

 

[ikeywah]

bend over!?!

30% is quite a lot on already bad margins for News Paper companies; but ultimately if the print version continues to decline they will have to bend over for Apple.

nice point of view... LOL bend over

it will work well to keep keeping the bastards honest... money to go in the right direction... apple is getting rich in the process but the internet can stop being a black market for everything it hosts

 

[liquid stereo]

Apple's greed disgusts me

I'm a long time Mac user (Mac SE, PMac 7100, PB G3, G4, etc.) and I really hope Apple gets some serious competition for its products.

The company is now greed incarnate. Why the hell should Apple get money because someone wants to buy a subscription to a newspaper?

At what point will Apple face serious FTC investigations?

 

[iDisk]

Apple is a business and wants money wherever they can get it......please dont believe them when they say they care about their customers, we should translate that as, we care about your money

 

[alent1234]

Before the internet, everyone who wanted to stay informed had a newspaper subscription. Unfortunately, reporting the new requires a lot of people, equipment, and time... it's not something we should take for granted, unfortunately. There will always be some free news content to read, but it's not outrageous to suggest a subscription model for a quality product that costs money to produce.

the price you paid was to cover mobbed up printing and delivery costs with something going back to Tony Soprano. the money to pay for news gathering came from advertising and the classifieds.

the newspapers screwed up their classified business and let ebay, craiglist, google and the internet in general have it. now they are crying and running to the government.

there are free newspapers in NYC that somehow make a profit. maybe the Times-Mirror company should look at ways of getting the advertising market back when printing costs are essentially $0. no one in their right mind will pay for news in the year 2010 and going forward

 

[barkomatic]

but what about all the paper coupons? That's one of the best parts of the Sunday paper. I guess you could print them out when the iPad gets iOS4, but then that kinda defeats the purpose of electronic editions. Most stores still require you to bring in a paper coupon to get a discount or freebie.

Sadly, I don't think a lot of people recognize the difference between stupid blogs and cheaply produced news that they can get for free -- and publications like the New York times which has quality writers and intelligent commentary. Most think a raving Tea Party writing about how much he hates Obama is "news".

 

[tasset]

It will disappoint me if Apple blocks digital subscriptions that are free for print subscribers. Like the People mag app. Or for example, the ESPN weekly magazine I get, the past two issues have a full page notice that iPad editions "coming this month" for free to print subsribers. Apple would block that now?

 

[stangmmx]

I'm a long time Mac user (Mac SE, PMac 7100, PB G3, G4, etc.) and I really hope Apple gets some serious competition for its products.

The company is now greed incarnate. Why the hell should Apple get money because someone wants to buy a subscription to a newspaper?

At what point will Apple face serious FTC investigations?

newspapers are not at all in a position to bargain. it's no different from artists selling their music through itunes. apple gets a cut. Greed incarnate? Apple has done a **** ton for investors. For about 4 years the stock couldn't get above 10 dollars a share, and now it's about 265.00. They offer fantastic products with exceptional customer service. I don't know why you're so flustered that a company is posting knock out profits. I'm guessing you're a journalist? Many of my friends are journalists, some of whom work for Newscorp. I told them about this newspaper subscription news, and they were thrilled. They said it will drastically increase their viewership. As the cost for the iPad is driven down, it will only get more and more readers.

This is hardly corporate greed. Originally writers wouldn't get a dime for all the hits their articles would acquire on the internet. Now they will be properly compensated. True, Apple may be taking advantage of the medium, but many companies provide a medium to view content and take a sizable cut thereafter.

 

[redscull]

If I buy a paper subscription, I should get the digital subscription "with it".

If I get the digital subscription "only", it should be at a slight discount from paper (to account for reduced overhead costs)

Something tells me that Apple picks their "cut" percentage based on analyzing the cost-difference between physical and digital distribution. I doubt that the newspaper ends up saving much, if any, money by offering digital subscriptions. They just write their delivery budget checks to a different company.

I say this because it might be very unreasonable to expect a digital subscription for free with a print subscription. You think the internet is free/cheap, but it isn't. The newspaper wouldn't be able to afford their current printing fee with Apple's 30% fee and other bandwidth/webmaster fees on top just to give you both mediums for the same subscription price.

I would be perfectly content with a digital-only subscription priced similarly to a print subscription. And in the interest of green, I would be against any bargain-priced combo-package that might encourage subscribers to get print+digital when all they really needed was digital.

 

[Westside guy]

We subscribe to the local newspaper, and if we want it the electronic version comes free with that subscription. And actually, I just (a month or so ago) changed our subscription so we're only "getting" the electronic version through the week, but we still get the paper version on weekends.

I think making newspapers available on the iPad is, in theory, a great idea. However if they do this, I hope Apple is involved with the design decisions. One of the things I really dislike about our paper's online version is the design (Olive Software's "Active Paper Daily" - they do this for a number of different newspapers) was designed too much with a physical newspaper in mind - it's like the decisions were all made by someone (or a group) who really had no idea how electronic media should work. It's like it follows the physical layout for the wrong reasons, and when they add "digital enhancements" they're exactly the wrong ones.

Fortunately the Active Paper software does let me download a PDF version - it's still sub-optimal, but the PDF of the printed paper is actually less annoying to read than the weird hybrid thing that is the default version.

 

[paradox00]

I thought Apple would allow them to offer subscription services through the app store if they had an existing digital business. All they would have to do sell a digital version other than one for the iPad, such as a pdf version for the computer, and then they would be able to give those digital subcribers a key to subscribe to the iPad app for free.

At least the article I read earlier suggested it would be that easy.

 

[bdkennedy1]

The way Apple handles magazines and newspapers is a total disaster. They need their own section in the store instead of being grouped in with all the other apps.

Since there are no subscriptions, I gave up and downloaded Zinio to handle my digital subscriptions.

 

[baleensavage]

Before the internet, everyone who wanted to stay informed had a newspaper subscription. Unfortunately, reporting the new requires a lot of people, equipment, and time... it's not something we should take for granted, unfortunately. There will always be some free news content to read, but it's not outrageous to suggest a subscription model for a quality product that costs money to produce.

Very well put. News is cheap, but good reputable unbiased news is worth it's weight in gold. One of the biggest disappointments with the iPad for me and probably one of the reasons that I haven't gotten one yet is a lack of a clear and easy distribution model for newspaper, magazine and comic book content on it. The "app for everything" model really sucks for consumables. What you end up with are a bunch of terrible huge app files which are just jpegs of print products which you have to buy by the issue and fill your home screen with. Or you get a basic RSS feed app that lists the headlines and takes you to a Web page.

Apple should have made iBooks have a storefront for subscription based media from day one. Sell magazines, newspapers, comics and so on. It's practically a no-brainer. Then charge the 30% fee or whatever they want and be done with it. This nonsense about wanting a chip of the advertising profits is ridiculous. If Apple truly wanted to make print media dead, they could do it. Develop one killer app that allows for independent news sources to publish their news easily to everyone on the iPad for a percentage of profits just like they do with eBooks. Let the bigger companies make their own apps if they want.

Also, I may be in the minority, but I think it's time for the print media companies to separate their digital subscriptions from their physical ones. I don't think you should get a "free" iPad subscription with a print subscription. If you want a physical sub get it, if you want digital sub get it. There is usually very little overlap between people that want a print subscription and those that want a digital subscription. This "giving away" the digital product while relying on people buying a physical product has been the biggest cause of the decline of the newspaper industry.

 

[Piggie]

I well over and fainted when I read this bit.

Apple may be looking to take a 30% cut of subscription revenue and up to 40% of advertising revenue from the digital newspaper content.

Consumers are already being fleeced by "eVersions" of books and other printer media.

If Apple takes this HUGE cut then it's only going to force the price higher.

Major FAIL.

How can anyone in their right mind, unless working for Apple, rate this as a POSITIVE ?

 

[Arganos0]

For some reason I've never actually enjoyed reading a newspaper digitally. I prefer to get my Economist by mail. As a bonus to the print subscription I got a digital one for free, but I never, ever, use it.

 

[leroypants]

I heard the mob was jealous of Setve jobs and his ability to charge 30% cut of subscription revenue and up to 40% of advertising revenue for allowing access to a device. How apples behavior at this point is not criminal is beyond me.

 

[vini-vidi-vici]

We subscribe to the local newspaper, and if we want it the electronic version comes free with that subscription. And actually, I just (a month or so ago) changed our subscription so we're only "getting" the electronic version through the week, but we still get the paper version on weekends.

I think making newspapers available on the iPad is, in theory, a great idea. However if they do this, I hope Apple is involved with the design decisions. One of the things I really dislike about our paper's online version is the design (Olive Software's "Active Paper Daily" - they do this for a number of different newspapers) was designed too much with a physical newspaper in mind - it's like the decisions were all made by someone (or a group) who really had no idea how electronic media should work. It's like it follows the physical layout for the wrong reasons, and when they add "digital enhancements" they're exactly the wrong ones.

Fortunately the Active Paper software does let me download a PDF version - it's still sub-optimal, but the PDF of the printed paper is actually less annoying to read than the weird hybrid thing that is the default version.

Which paper are you subscribing to? I'm also in the soggy NW, but haven't heard of this option anywhere locally.

Also, does this paper have a website? and how does the content there differ from the digital delivery? In general, it sounds like they 'got the model right'. I hope they fix the formatting thing.

 

[stangmmx]

The way Apple handles magazines and newspapers is a total disaster. They need their own section in the store instead of being grouped in with all the other apps.

Since there are no subscriptions, I gave up and downloaded Zinio to handle my digital subscriptions.

^^ This.

 

[tarkeybear]

Give the Publishers some breathing room

I agree with others here. Apple is getting too greedy.
Their mantra has always been content (OS, iApps, iTunes) sells their hardware, but they are now starting to get a little too greedy on the software front.
I can see taking a cut from the App store (they host the site, manage quality via App review and process payment)
BUT
if the newspaper is doing all the heavy lifting (paying reporters, maintaining editorial integrity, soliciting ads, and publishing it from their own servers) I don't see how Apple can demand 30% with a straight face?

I think the papers need a subscription (premium content) model to stay alive. People aren't going to be incentivized to buy something they can get for free unless it is something "better" and limited by paid access. I don't think Apple needs to add to the overhead and make the premium channel unattractive from a price perspective.

People looking at someone reading quality content on an iPad are going to want an iPad so they can have access to the same content. Apple should be happy with the iPad sale, and plow the profits into development of a better iPad so people upgrade in the future.

My opinion...