Joe Wikert has posted a pretty strong complaint on his Publishing 2020 Blog:
I’m certainly not the first to blog about this and I doubt I’ll be the last. What I can’t understand though is why, after Apple made in-app subscriptions possible months ago, are none of the big guys selling their magazines that way?
Does it have to do with Apple’s 30% cut? Are they all trying to find a way to get around this and sell direct? That’s what Amazon does. When you buy a Kindle edition via the iPad app you’re actually just going direct through the browser, not buying through iTunes. I’m assuming Amazon therefore doesn’t have to pay Apple a cent on the transaction. Why wouldn’t magazine publishers want to do the same, especially on longer-term subscriptions?
Joe is a magazine enthusiast. He is just the kind of customer that the magazine industry needs. There are lots more like him and these customers will not hang around indefinitely. I have to point out that magazines using the Exact Editions platform can sell magazines through the iTunes platform, using Apple’s in-app purchasing system which works very well. We would also note that apart from the magazines hosted by Exact Editions, very few publishers are doing this. Is this because the publishers do not want to surrender the 30% commission to Apple, as Joe suggests? Perhaps, but there are ways round this — and Joe Wikert mentions some of them: the Kindle from Amazon is exploiting some of these possibilities. Exact Editions has another sort of solution in shared access-codes, and in offering ‘freemium apps’ for magazines which offer the dual function of providing free promotion for publishers and the opportunity to sell 30 day subscriptions via Apple: reserving to the publisher the right to sell annual subscriptions to readers who will enter a direct relationship with the publisher. There certainly are ways of using the Apple service in ways which suit the publisher.
The relative ‘tardiness’ of the major magazine publishers in getting onto the iTunes/iOS bus has other explanations. The first is that Apple has not provided a direct and recommended route to market, in the way that it has provided iBooks for Book publishers. My guess, is that Apple considered doing this and then decided not to do so, because the major publishers were not too enthusiastic about the shape of Apple’s solution. And the probable reason that they were not too enthusiastic, is that Apple has shown little willingness to share much customer data with publishers (magazine publishers, newspaper publishers or any kind of publishers — Apple regards the data that it obtains from the users of its devices as private and proprietary). The major consumer magazine publishers care about this because the majority of their revenues and their profits comes from advertising, and they are worried that they will not control and retain these revenues if Apple (or Google, or some other technology intermediary) manages and enables the advertising networks in digital circulation. Surrendering this ground to Apple looks like selling the family silver. I suspect that this is the biggest problem that the major magazine companies have with the Apple platform and the iTunes proposition. They are worried that they will lose out on advertising. This is not a very rational concern, because the plain truth is that the magazine companies are never going to own their digital audiences and the ‘metrics’ for advertising effectiveness of digital magazines in the way that they have held tight hold of print advertising audiences and metrics. The digital world (Google first and foremost) has changed that. But they can still make money out of advertising, especially with Apple if they get on the digital bus.
There is another reason that magazine publishers have been relatively slow to climb on to the iTunes system with magazine apps, and slow to see how effective for magazines the in-app purchasing option is: many who work in the magazine industry think that the digital future for magazines is somehow completely, or at least radically different from the magazines that they currently produce. They seem to assume that their digital product should be more like Facebook, or more like interactive TV, or more like a web site, than it would be like their existing product. The conventional wisdom in the magazine industry is that digital magazines need to be radically different from what has gone before. There is a marked difference between magazine publishers and book publishers in this respect. Since book publishers assume that digital books, or ebooks, are really very much the books that publishers have always published. Book publishers assume that their market and their business is going to become largely digital in the next few years. Magazine publishers seem to be strangely less confident about the continuity and convergence of their digital future on what they already do. Perhaps this is the biggest challenge facing the magazine industry at this point: to recognize that going digital is inevitable and is mostly a matter of doing what they already do only in a better and more economically digital fashion. Look for continuities and convergence before getting too preoccupied with the radical departures! Because there will be some, and digital magazines will be different.