Euro Newspapers Squawk at Apple’s Subscription Plan

| Analysis

The European Newspaper Publishers’ Association (ENPA) issued a statement Tuesday asking that tablet makers — specifically naming Apple, the only real name in tablets so far — to not get in between newspapers and subscribers. The Association is concerned that Apple’s desire to 30% from subscriptions will eat into the profits of an industry that is already struggling.

“Newspaper publishers spoke out following indications by Apple in many European countries that it may bring in new conditions for both online subscribers to newspapers and also for print subscribers, who have until now enjoyed access to their newspaper on iPad,” the Association said in a statement.

The concern amongst all publishers is twofold: Firstly, newspapers want to be able to offer subscription access online without paying Apple a cut. With this model, publishers offer free apps that include subscription access via a login.

Apple in Europe

 

Secondly, newspaper publishers have long cried foul at losing access to customer information by allowing Apple to manage in-app transactions. They want that information for advertising purposes, long a strongsuit in traditional newspaper business models, but Apple has refused to allow third party developers official access to customer information.

These concerns gained renewed attention when Apple and News Corp. announced The Daily, an iPad-only (for now) newspaper that can only be subscribed to through the App Store. Apple gets the same 30% of the subscription that it gets for all other App Store sales, at least for now — News Corp. CEO Rupert Murdoch has publicly stated that he hopes that percentage is lowered over time.

Apple has not yet announced what other publishers will be able to do with subscriptions, but the industry has been concerned that Apple will move rules into place that make The Daily’s terms the only terms for subscription access, especially when Apple rejected Sony’s ebook app earlier this month.

Apple has faced most of these concerns and pressures before from publishers, especially in the U.S. The potential difference when it comes to the ENPA is that there are plenty of government watchdog agencies in Europe that take a far more proactive approach to monitoring business practices that may have an affect on consumers than the U.S.

Apple may well feel entitled to demand a cut of any and all transactions that involve its ecosystem, but the European Union could have something to say about it. The ENPA’s call is a shot across Apple’s bow in this regard.

Indeed, the BBC reported Tuesday that Belgium’s economic ministry has already called for an official investigation into Apple’s newspaper subscription plans.

All this for a device that didn’t exist a year ago.

Comments

geoduck

They want a free ride. Do they not pay for delivery of the dead tree version of their work? Seriously, 70% of a whole new market where someone else takes care of hosting and managing the environment for you and markets and sells the devices to access your publication so you don’t have too isn’t bad.

70% of something vs 100% of nothing.

Tiger

Going to play devil’s advocate here for a sec ok? Don’t overreact just yet.


There’s regulation and then there is OVER REGULATION.

In other words, Apple we don’t want you in our countries. Period. Goodbye. Because we only want you to be like our governments and dole out handouts to our citizens on our terms. We control them, you cannot.

Proactive approach. Nice euphemism and spin there. Of course, Apple can choose to cave to the demands, just like Google caved initially to the Chinese. Or enter into some negotiations with them the agencies and hopefully tell them, respectfully of course, “Why do you hate free enterprise?”

The interesting side effect of a global economy is that [many of] our ancestors left Europe some 300 years ago and we divorced ourselves of their rule only now to be married to them again.

And where I’m going with this is that we cannot separate business from politics…and politicians.

Interesting times in which we live indeed.

[tongue removed from cheek now]

Bryan Chaffin

Geoduck, this is one of those rare instances where we disagree. For one thing, developers (publishers in this case) are responsible for marketing their own apps. The closest thing Apple does to marketing an individual apps is featuring it, or maybe mentioning it in a commercial, but those are a tiny, tiny percentage of all apps.

In addition, it was Apple that allowed free apps to be offered on the App Store. If subscription transactions are being handled outside of the app, Apple isn’t paying any of the transaction costs or managing any of the subscription mechanism. Do they deserve a cut for that?

Lastly, my personal opinion so far (still mulling this whole thing) is that Apple wanting a piece of everything done on iOS devices is akin to the record labels wanting a cut of iPod hardware sales.

It’s one thing if Apple wants a cut of subscriptions that are handled by the company through the App Store. Hell yeah, Apple deserves that cut. It’s another thing to prohibit publishers or book sellers from allowing users access to content purchased elsewhere. If Apple takes that path, it’s crossed a line, IMNHO.

If Apple offers in-app subscriptions while still allowing book sellers and publishers to offer Web-based subscriptions, said sellers and publishers don’t have a leg to stand on.

geoduck

OK I might not be looking at this right then. I was thinking they were talking about subscribing to something through your iPad. You get the app and then pay a fee to have the information pushed down from Apple’s servers. Something akin to the bookstore or the AppStore. However if the App is free and you just use it as a portal to get data from somewhere else then maybe that would be different. That would not involve any input from Apple. The article says the Daily is sold through the AppStore. Does that mean that the data is going through there or is it just the Daily App that’s sold and the data is coming from Newscorp servers. I guess I’m not that clear on how this is going to work.

emozion

Apple does not want a piece of everything done on iOS devices. Apple wants a piece of commercial products, including newspapers, offered for sale in iTunes. It is fair deal between business partners and both get their share of the profits.

The newspapers are perfectly free to offer their stuff in any format and at any price on the web and that will be completely accessible on the iPad, paywalls and logins and all. If, HOWEVER, the newspapers want to offer their stuff as an APP, as in Application, for the iOS devices through ITUNES they will have to come to an agreement with Apple. Just fair.

The connection between a paid paper newspaper and a ?free? digital edition in iTunes is an unreasonable business proposition for Apple, however attractive it may be to newspapers and readers. Why would Apple distribute for free thousands and millions of free newspaper-apps or editions??

Here?s a potential future scenario: newspapers send you in the mail a token paper ?newspaper? once a week?heck, maybe once a year and maybe just ONE sheet of paper. The newspapers then charge you the full subscription price for this ?newspaper?. But the REAL newspaper is a big, fat, fancy and great digital edition distributed for free through iTunes, because it is ?included?. We now know this will not happen, and the newspapers will have to realise that Apple is not their free distribution channel.

I read the statement from the European newspapers. I am a European and I love newspapers and I am even a socialist, but I completely disagree with the newspapers? statement. They are whiners and freeriders, I am sorry to say. And I cannot see that the newspapers? predicament has anything to do with any ?monopoly? position on Apple?s part.

I am looking forward to lots of Quality European Newspapers in iTunes?at a price. Bring it on!

mhikl

Here is what I want from all publishers. I want their apps for free. I want access to all their materials for free. I don?t want them to have any of my personal data or information. Seems in line what they want. Should they agree, guess what? The don?t have to pay Apple a penny. All round everyone is happy. Some problems are so easily solved.

However, back to the real world. Publishers do want to charge and make money.
Bryan, your last sentence is dead on. [quoted: If Apple offers in-app subscriptions while still allowing book sellers and publishers to offer Web-based subscriptions, said sellers and publishers don?t have a leg to stand on.] Then the consumer may choose how to pay for his subscription.

App Store, iTunes, iProducts are Apple designed. They are not public trusts. I want to used them, I pay up front. Publishers want to use them to circulate their wares, Apple they pay upfront. Apple becomes a virtual paper boy.

I believe I read that other book readers get their 30% cut.

Publishers are a consortium. This is togetherness and togetherness is stronger than competing entities.

Electronic reader providers can work as a consortium, too, or go the competing entity route. Time will tell but I suspect they are smart enough to know where their profits are better served. No matter how one may want to bugger the competitors, receiving profit is better than not.

The fly in the reader consortium might be a renegade company going it alone and not expecting a cut. But even then, the consumer would notice no difference in his cost. The publishers, on that platform would save the markup; the renegade reader company would gain nothing. The reader consortium would probably have draw up a contract such that price bating would not occur. Subscription price would be the same across all platforms.

Apple will not be fighting the good fight alone. The rest may be sitting on the sideline, but they are rooting for Apple and that includes Android.

mhikl

This is an emerging business which has to work its way through the usual negotiations. The thirty percent thing is not written in stone. It will be negotiated and eventually worked out. I suspect there will be a sliding scale of charge.

The first x number of subscriptions would gainer the hefty thirty percent. The next y number may be charged twenty percent and anything after that number of subscriptions may be charged fifteen percent. Small news papers, for examples Mhikl?s World News: A Minimalist?s Perspective might never get beyond the hefty charge while The Daily would likely have the majority of its subscribers in the lowest sphere.

Nemo

Dear Bryan:  Though Apple hasn’t yet been comprehensive and clear about how it will manage the policy of requiring in app subscriptions and taking 30% for that service, it is my understanding that all newspaper and magazines will still be free to offer the same products and services on their proprietary websites.  So Apple, I think, is requiring non-exclusive offering of in-app purchases at the best available price for any subscription that is marketed in the App Store but that is sold elsewhere, but publisher/developer of the app can still offer its subscription service elsewhere, for example, on its website.

So, if, for example, De Speigle wants to avoid Apple’s 30% cut and collect all the data it can from users, it need only persuade them to use the browser and go to De Speigle’s website.

Also, disagree with you in that I think that you are inaccurately minimizing the value, as well as the costs, of what Apple offers to publishers who present an app in the App Store.  The marketing value alone is easily worth 30%, and the costs of Apple hosting an app isn’t lessened one whit by the publisher also hosting his/its app elsewhere.

So the matter is in any publisher’s hands.  If you don’t like Apple’s 30%, do the marketing necessary to get customers to your website.  I’ve gotten the Economist for years from its website, and probably will continue to do so.  But if the relationship with the customer is established while they are browsing on the App Store, the publisher should and should expect to pay, just as it would pay the owner the owner of a newsstand, which I think charges a commission not too much less than Apple’s 30%, for hosting its publication in his store, where the customer can peruse and sample the publication.  After that, if the publisher can persuade that customer to subscribe, the publisher is free of the newsstand’s commission; if not, the publisher must pay the owner of the newsstand, which in the instant case is Apple, for being in his/its store.

danthemason

If you don’t have to pay for paper, or for Geoduck’s trucking, and you don’t have to pay for Nemo’s newsstand well….... Apple’s got a superior delivery system. It’s for sale; 30%. No one is forcing anyone. It’s a free market.

Bosco (Brad Hutchings)

It’s a crappy way to do business, but this is what happens when grudging acceptance of Apple’s walled garden turned into the walled garden being farts that smell like roses and crap that tastes like strawberry milkshakes.

Here is a safe prediction. If Apple’s content gambit concerns you now, Apple will do something in the next year which will make this concern seem almost petty. Bank on it.

nealg

My take on all of this is that companies, including Apple are positioning themselves to take advantage of the tablet revolution/tsunami that will be coming over the next several years. I think these are just the opening salvos in every industry trying to get the best deal for themselves. I have seen so many rumors about what the publishers are supposed to want and what Apple is supposed to want, I will wait until something more definitive to come out about what is really going on here.

Apple needs to be careful not to price itself out of the market for the dailies. But they also need to make sure that they get their fair share of subscriptions, whatever that may be. It may be nothing and doing it for free to sell more software and hardware or it may need to be the rumored 30% that many stories have run with. Apple is in a pretty good position and I would rather they start high and then lower it than the other way around. Apple also needs to be fair about all of this although, to be honest, I don’t know what that means at this point.

The publishers need to be careful that they don’t miss out on an opportunity, especially since the way people are consuming the news is changing rapidly. I do want these news organizations to survive because of the important work that they do so I hope things can be worked out in a way that is equitable to both sides. Apple usually, not always, works things out so that they are fair and good for the consumer.

So before I pass judgement, it would be good to see some more objective discussion of what is actually going on.

JMO though. Good luck out there.

Neal

Bosco (Brad Hutchings)

All good and well Neal, except the terms of Apple’s developer contract are not rumor. They are actual. The 30% for in-app purchases is actual. Murdoch has stated that The Daily is paying 30% and that he hopes to renegotiate in a year. The terms that prevent publishers from collecting the customer information they rely on without customer opt-in are actual.

mhikl

The newspaper industry is in decline for some time now but it still thinks it is the reigning queen of information. The days of Newspaper Mandarins are over. A new age of media is well upon us and newspapers need to get with the times. As I said earlier, this has nothing to do with us, the customers. The price to the consumer is going to be the price the market place establishes based upon the curve of profits. (Does anyone really believe that Murdock or any other paper seller is going to drop their price by 30% if Apple becomes a charitable organization and drops its 30% charge?)

A store is a store, virtually or in brick and mortar. The store owner gets his cut. He is not in the public service. Apple is not going to be alone in the store front business but if no one is allowed to make some money from what they offer in their stores, Apple will only become more powerful. It alone has the products and the momentum to be successful. Its stores are not a major part of Apple income but it may well become such for the Android clones in their strive for existence. In the long run it won’t be Androids competing against Apple;  that war is lost. They will be competing against each other in the Android Desert of Despair. Every opportunity to make some change in the Android Clones fight to be one of the survivors is their only hope to being one. Thirty percent will be their life line.

To quote a member of this forum, “Here is a safe prediction.” The game is over. Apple has won; Android Clones are watching carefully on the sideline eager to jump on board; Newspapers will come to acceptance. “Bank on it.”

mhikl

The publishers need to be careful that they don?t miss out on an opportunity, especially since the way people are consuming the news is changing rapidly.

I meant to put this quote in my post, Neal. It’s dead on. And all of this discussion is opinions but that is all we have when new paths are being forged.

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