Considering the challenges Apple has been increasingly having in the past couple of years securing content, it seems rather insane of them to take this approach. Magazines and newspapers are fueled by advertising, not subscription or news stand sales. Circulation is what determines the price of an ad in a magazine. Digital versions make it a little easier to ignore ads, especially a full page ad that's nagging at the corner of your eye when you read something on the opposite page. I'm sure advertisers are tugging at the publishers concerning fees for ads.
If Apple really wants content, they can't have this one size fits all fee. Looking at Android, in some cases a purchase can be billed to your phone bill, or via credit card through Google. If Google wants to stab Apple good, offer reasonable terms. Something like buying Farmville cash in the app I can see the 30% cut on. Zynga is spending a lot of money with cards in stores and third party sales chanels, but that's a pure profit center for them. And it's a purchase people are spending $5-$50 on in a clip multiple times a year, unlike a one time $20 magazine subscription that the publisher isn't really making money on. A magazine subscription or individual sale at the news stand doesn't even cover the expensive of producing that 1 issue. Even with digital, there's new costs involved that don't totally make up for not printing. (LIke a dedicated team coding the magazine). Magazines and papers are ad supported businesses. If Apple wants to see content for their devices they can't demand 30% on every thing sold. They need a tiered approach. No more than 10%. Something slightly higher than a credit card fee.
How many of these publishers aren't going to be pushing subscriptions on other platforms? It would be one thing if they had the savings of using Apple's data centers exclusively. That savings might justify a 30% cut, but the fact is they will always have a need for their own data centers to support other platforms, and their's costs with customer service that's not going through Apple.
Apple could attract a lot more content if they had a tiered fee depending on content/product type. Wouldn't it be better to say "Read over 100 magazines on your iPad" than to say, "Hey, we have 5 magazines you can read." Because that's what will happen.
Or, as their terms read, couldn't say Men's Health make a digital magazine and not sell the subscription through iTunes? Then push the content through the app when it's opened? It seems to comply with the App store terms by not offering an in ap purchase, and that's what these companies should do. So once a year you have to go to the publishers site to renew, big deal. Then I guess Apple would change their terms to not allow pushed content. They're getting rather bratty like that.
Look at the failure of iAds. The Apple greed has kept advertisers away. They can't sell enough ads to meet demands of developers who signed up for the program. Those developers are eventually going to revert back to another company because they're not going to make any money.
Apple sure "think's different" still, just not sure it's for the better. They're kind of behaving Ballmer-soft like. Content is so important in the new market place. Look at a Roku box Vs. the Apple TV. One has tons of content and one has hardly any content. Apple would probably get a lot more if they gave up some things. "Okay, so we'll take a 20% cut on tv show rentals if you give us more film rental options or book titles." If one store stocks 50 items and a second store offers those same 50 plus 100 more at the same price, wouldn't you want to shop the other store? In time that's where Apple will put themselves as other platforms catch up. These companies aren't going to lose money just to have their content in iTunes. Google seriously are you listening? Snatch and grab and start signing exclusive deals.
edit: Yes! Google you are listening....
http://news.cnet.com/8301-17938_105-20032217-1.html
And in multiple countries you are listening. Should put some heat on this issue.
