Subscriber Information and Revenue Sharing Seen as Hurdles to iPad Newspaper and Magazine Deals

[ChazUK]

You know what Chaz, that might just catch on.

As long as the BBC exist (I already pay for it through the TV Licence fee) I won't buy newspapers or digital newspapers.

(Overall it is quite bad for me to be honest as I work for one of the UK suppliers of newsprint for News International)

 

[Bodypainter]

when the thing has a browser, why not jut browse for the news?

that's an easy one: simply, because apple wants to make money. apple already removed flash in order to demage the fun of the internet. if they could they'd also remove safari at all and force people to pay for every content. that is apple's new strategy: charge wherever you can. I wonder what apple will do with all that money (apart from giving it to their shareholders). will they EVER think of the customers side and lower the prices for their expensive hardware? hm.... nooo!

 

[till]

I don't know: anyone out there that thinks subscribing to just one or two news sources, when you can get currently get thousands for free is a great idea, can you explain why?

Sturgeon's Law. Except instead of 90%, it's more like 99.9% of everything is crap.

Filtering through that is exhausting. I can't think of any news sources I particularly like (and I read quite a lot, English and German), except for a local paper or two. But for serious global and political reporting? No, really everything is crap. Especially the magazines.

I'd subscribe to a local paper for a reasonable fee. I'd gladly subscribe to a bunch of non-news magazines. And I'd love to see more stuff like Voice of San Diego. Hyperlocal hypertargeted blah blah blah, with no absurd pretensions of "balance" and insider arrogance, just simple honesty and humanity. That's the future.

 

[OllyW]

As long as the BBC exist (I already pay for it through the TV Licence fee) I won't buy newspapers or digital newspapers.

The BBC is also my primary news source and I don't see any reason to change. Like you say, we already subscribe to it anyway.

 

[Dan55304]

It's a non-issue

Frankly, it seems like the print industry is asking for much more than they get now from media outlets selling printed material. The publishers are trying to get something from the digital side they can't get from printed.

Think about your typical brick and mortar outlet like Barnes and Nobel:

1. It's likely the store keeps more than 30% of the sale price of a book or magazine.

2. The publisher gets zero information about me when I buy a book or magazine from a brick and mortar store. I hope brick and mortar stores are selling my information to publishers.

Apple's deal obviously improves the revenue stream for publishers considering the lack of physical printing, delivery, and infrastructure costs. Huge win for publishers here.

I see no negatives for publishers. They aren't losing customer information since they never had it in the first place for any store purchased printed media.

Magazine and newspaper subscriptions will continue to suffer. I can see a reduced cost per issue with a digital "subscription". Maybe that case makes sense to share my information to the publisher. Hey, just like the real world. Anonymity costs me more by buying single issues at the store.

This is a red herring and the dialog shouldn't be hijacked by those trying to gain more revenue and rights than they have now.

 

[OllyW]

I wonder what apple will do with all that money (apart from giving it to their shareholders).

Apple don't give their profits to the shareholders, they never pay dividends.

 

[mrgreen4242]

Gold mine? Do you know how much extra cost it will take to develop content for the iPad? To add the nifty stuff like the NY Times demo showed, that's not going to come cheap. Every level of newspaper is cutting pennies here and there to just stay alive. All of this is a crapshoot since not a single iPad has been sold.

I'm heavily biased as a newspaper employee, and I can tell you that this is far from a sure thing. You're expecting people to spend $500 on an extra device to read your content, which right now costs them either 75 cents/day per single copy or FREE on a Web site.

This won't make money for the industry until the gravy train of free news is killed. The New York Times is going to be first down that road. After that, the other big boys must follow. I honestly don't expect people to spend that much extra money for the same thing.

Our publication's readership is skewed extremely old, so this stuff isn't going to help us in the long run unless we can attract new people. Are software developers going to emerge to work with the thousands of smaller papers across the country?

I can't speak to newspapers, but I suspect they are at least similar to magazines, which I am very familiar with. For a small, specialty magazine, subscriber costs are eaten up 100%+ by printing and postage. The ONLY profit is in advertising. The larger publications make money on renewal customers, but typically not new customers (in terms of what the reader pays - they always have profit in advertising). So, hypothetically, a $20/year subscription, which nets $0 (plus ad revenue) could drop to $10 which nets $7 (plus ads).

Now, as for additional costs, at first just deliver an electronic edition of the magazine. It will cost $0. EVERY publication is digitally mastered already, adding a new workflow item of exporting to an ePub format (I'm assuming Apple will be handling the DRM wrapper) will take someone about 5 extra minutes. Don't invest into new, interactive content until it's profitable - simple enough.

Even if you existing readership is unlikely to convert, that just means the iPad/eBook reader owning crowd is a whole new market for you. A way to advertise your product to a group who you have been previously unable to reach - a publications dream.

Smaller, niche, mags and papers will be the big winners here. Print and mail (to a lesser degree) costs scale very heavily making it hard to be profitable with a small circulation. In fact, I had a wonderful discussion with a print house owner who ended up in the magazine business because he kept buying magazines he printed as they would go under - he could afford to do because they could do printing "at cost" and consolidate the rest of the staff time for 18-20 mags. Digital distribution means that the cost per issue for a fanzine and Time are the same... it's going to be a great equalizer.

In fact, that may be what publishers are afraid of now... bringing credibility to papers and periodicals on the iPad might be the beginning of the end for them.

Also, publishers aren't asking people to pay $500 for a reader for their paper. We're buying a portable media device for a huge range of content, and paying publishers for their periodical.

Is it really a salvation? Would YOU buy a subscription to a newspaper for an iPad? Do you have subscriptions to newspaper websites? I don't know ANYONE who does this. The only people I know who have subscriptions are those who buy the actual newspaper that gets delivered to the door... and the online subscription is free with it.

I don't see this really adding significant subscribers to a news agency where it will save them from their slow death. At most I see it where they have the same amount of subscribers, but now they aren't in complete control of the revenue/customer info.

If I want to read my local newspaper, I can go to their website for free. Or I can use an RSS viewer. There is NO reason for me to pay for this as an extra service.

YES, a thousand times yes. I enjoy reading magazines, and newspapers, but I have many problems with them. First, my wife complaining about the stacks of them lying around as I try to get to them. Second, searching and archiving them (as in, I can't). Lastly, bringing content with me. I have no desire to bring a handful of magazines and papers with me, so I don't, which makes it difficult to read them when I do have the time.

Reading on a computer at my desk (or even laptop on my lap) isn't an ideal way to read. It's not portable, instant on and go, for starters. I don't want to sit at my desk anymore, either. I do that all day long at work. Reading on a laptop on the couch/in bed is less than comfortable. Tablets have at least a chance of being a pleasant method of consuming digital content.

Here's the problem:

Advertisers represent the real revenue stream; not the reader. Advertisers want to know there ads are reaching their target market; so print media gets as much info as possible on their readers. If they have less info, advertisers will pay less per ad; and publishers make less money. That is why they don't like Apple's terms on privacy and data access.

The information Apple has about their customers is a gold mine; the publishers want in it.

A clever publisher will come up with far better info for their advertisers using an electronic format. This is all bluster, or a lack of creativity.

 

[sravana]

apple is creating a viable marketplace for them to make lot's of money where they have never been able to make anything at, and they say "no we want the users information so we can target advertise" "so maybe we won't do this new finagled internet thing."


and they wonder why their business is dying... they would rather slowly die a certain death than to grab the life-ring floating in the water right next to them.

+1000

No wonder Aesop's fables continue to entertain - killing the goose that laid the golden egg indeed!

 

[batchtaster]

Oh look. The recording industry, 5 years ago.

 

[mags631]

I speculate that these are the same folks that cut their teeth convincing subscribers to sign up to a $100/year magazine subscription for a free NFL football phone. If I'm right, then I'm not surprised.

 

[inlovewithi]

It must be hard for Steve to sit in the same room with some of these dumb asses and not hit them with chairs.

Are they stupid? They have an opportunity, through application development, to develop WAY more sensitive tracking information.

These guys have no clue. I hope Apple puts them all out of business.

Perhaps these companies shouldn't negotiate and just do as Steve says. They are so stupid.

 

[cmaier]

This story isn't just about revenue models. It's also about publishers wanting access to Apple's data about the consumer.

[edit]

The SI app that Time showed has advertising in it. The Magazine people would like Apple's data on the consumer so they can change that interactive ad to "suit the consumer".

[/edit]

fine, but it is ALSO about revenue. And that's what my question is about.

 

[Eye4Desyn]

This confuses me. It didn't look to me like the iBooks reader was ideal for periodicals - it didn't seem to support fancy page layout options, etc. So are we talking about each magazine/newspaper as a separate app (with a 70%/30% split?)

...and one more thing, We now have the iNewstand built-in to our iBookstore for magazine and periodical purchases and subscriptions.

 

[Chupa Chupa]

Perhaps these companies shouldn't negotiate and just do as Steve says. They are so stupid.

Hey, if they were half as smart as they think they are the industry wouldn't be in the lousy predicament its now in. Obviously they don't read their own stories about other failed industries and business models that were reshaped and saved by one Apple, Inc.

As I see it, NBC once left iTunes in a fit of rage only to come back on its hands and knees. So this is probably all posturing. Apple needs new content. Newspapers need a new revenue stream.

 

[Digitalclips]

apple is creating a viable marketplace for them to make lot's of money where they have never been able to make anything at, and they say "no we want the users information so we can target advertise" "so maybe we won't do this new finagled internet thing."


and they wonder why their business is dying... they would rather slowly die a certain death than to grab the life-ring floating in the water right next to them.

Reminds me of Kodak in the early 1990's. The were a distributor for my company's digital color separation software. Their digital division continually had to fight with the HQ over every thing they wanted to do to expand into digital imaging as the idea that digital could ever compete with film was not even up for debate by the old guard.

 

[Peace]

...and one more thing, We now have the iNewstand built-in to our iBookstore for magazine and periodical purchases and subscriptions.

Every app has it's own directory for a reason.

Using that SI app as a model. The app itself wouldn't be updated every month when a new issue comes out. Only the content or "issue" if you will.

The directory would hold many back issues.

 

[Eye4Desyn]

Every app has it's own directory for a reason.

Using that SI app as a model. The app itself wouldn't be updated every month when a new issue comes out. Only the content or "issue" if you will.

The directory would hold many back issues.

Understood, but that would get ugly pretty fast. I would imagine Apple coming up with a much cleaner way of accessing and aggregating magazines/periodicals (stand alone purchase or subscriptions) rather than having a series of individual apps for each publication that would update OTA, no?

IMHO, I think a good start would be a native app (iNewstand or whatever) that would function similarly to how we consume music on the iPods/iPhone by artist, by genre, etc....only in this case magazines and periodicals can be consumed by title, genre, volume, issue month, and so forth.

 

[hsotnicam8002]

I buy a magazine or newspaper. End of story. Keep the spam away Apple. Good on you!

 

[Peace]

Understood, but that would get ugly pretty fast. I would imagine Apple coming up with a much cleaner way of accessing and aggregating magazines/periodicals (stand alone purchase or subscriptions) rather than having a series of individual apps for each publication that would update OTA, no?

IMHO, I think a good start would be a native app (iNewstand or whatever) that would function similarly to how we consume music on the iPods/iPhone by artist, by genre, etc....only in this case magazines and periodicals can be consumed by title, genre, volume, issue month, and so forth.

While that sounds good each publisher has it's own view of what their magazine will look like on the iPad. You really can't expect all publishers to design their magazine the same way.

Designing a "native,singular app" would create this environment.

 

[trip1ex]

Yeah don't see the big deal in the information age.

You should easily be able track what a customer reads in your newspaper on a closed platform like the iPhone.

Quick surveys are much more practical too.

 

[Substance]

Adapt or die, newspapers, it's that simple.

Don't like the fact that something isn't the same before? Then try to compromise instead of throwing the baby out with the bathwater.

Can't get subscriber data like you use too? (I'm not even sure what they mean by this, how were they getting the subscriber data before that they can't when someone buys a digital subscription?) Then do what the Web does today, ask readers to fill out brief surveys, or give them a survey when they sign up.

Is Apple's cut of 30% too high? Maybe, but one would have to expect some savings from reduced printing and distribution costs.

Maybe the slow death of newspapers shouldn't be entirely blamed on the Internet itself, it sure looks like the people who run newspapers (and I"m just talking about this incident, but several other I've come across) are completely inept at how to survive in the digital world.

 

[axual]

Note to Publishers

If I want to share my information with you, you can ask me first and then I can decide if I want to share it. You can make it worth it if you like, but I'm tired of people assuming my information is their's simply because I "choose" to do business with them.

 

[HarryPot]

It must be hard for Steve to sit in the same room with some of these dumb asses and not hit them with chairs.

Are they stupid? They have an opportunity, through application development, to develop WAY more sensitive tracking information.

These guys have no clue. I hope Apple puts them all out of business.

Yes, put out of business dinosaur publishers who resist new technology at every turn, are slow to adapt to new demographic trends, and rely on ancient production methods when the tech is staring them in the face.

But why would making your content available in digital format for the iPad (or another tablet) save your business? If people aren't reading Nat Geo or SI in the physical form, they won't do it in the iPad.

Entering the digital version of things always brings into place piracy. I mean, iTunes has been a great success for music, but the people that currently buy their songs in iTunes, would probably buy the CD if iTunes didn't exist. And besides, with music it is different, since you get the option to buy just one song of an album, so there's an advantage over the physical CD. With magazines or newspapers, there isn't a similar advantage.

The truth is that these companies are struggling with entering the new Internet era because of piracy.

They will need to adapt, streamline, and embrace or be put out of business by new players. The new players will bring something innovative to the table, use the technology, embrace the new audience and thrive.

I don't see new players taking their place. Magazines and newspapers are about content. The distribution process is also key, but not as important as the former.

 

[Friscohoya]

It seems that if the most valuable asset that hese guys have is their access to customer info, then this deal should be worth at least a 30% piece of the pie. They will get way consumer info through digital distribution as opposed to physical. Not that I am that excited about someone recording my every click. Fact is though, they already do.

 

[scoobydoo99]

Publishers have spent decades collecting information about subscribers that influence marketing plans and, in some cases, the content of the publication itself. Apple's policy would separate them from their most valuable asset, publishing executives said. "We must keep the relationship with our readers," says Sara Öhrvall, senior vice-president of research at Swedish publisher Bonnier . "That's the only way to make a good magazine."

"Keep the relationship with our readers" ??! Riiiiiight. Data-mining personal information that your readers never intended for you to track is your idea of a "relationship", but not mine. The only relationship I want with a publisher is one where I pay a fee and they deliver content.

Not to mention that the publishers generally CAN'T GET this type of information in print media AT ALL. They are talking about mining new data made possible by the electronic platform of iPad, NOT preserving some data stream they have now.

Typical corporate crock of ****.