French Newspapers Team Up to Fight Apple

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Eight publications in France, including Le Figaro, have teamed up to fight Apple’s policies and 30 percent take on the iPad, according to Reuters on Wednesday. The growing realization amongst them is that, after taxes and Apple’s take, it’s very hard to make any money compared to their legacy paper offerings.

Some of the other French publications involved include the sports daily L’Equipe, the business daily Les Echos and the news weekly le Nouvel Observateur. The consortium is negotiating with Apple as a group to obtain key concessions.

“In the Internet world, we face actors like Apple, Google and Facebook that are infinitely powerful, much stronger than us publishers,” said Pascale Pouquet, the top exec with Le Figaro. “It just made sense to us to try to establish a more favorable power dynamic to try to have more equal relations with them.”

Another member of the consortium, Xavier Spender with L’Equipe pointed out that, after doing the financial calculations, “I make less money selling a digital edition of the newspaper [on the iPad, with 30 percent Apple cut] than I do on the print edition sold in a kiosk.”

Various publications in the U.S. have had mixed success with the iPad. For a time, it seemed that Apple was generating the wave of the future, a bandwagon every publication had to be on. However, now it appears that each publication has its own dynamics, and a fixed 30 percent cut by Apple doesn’t work for everyone. For example, the UK’s Financial Times, after launching a popular iOS app, recently changed gears and launched its own Web site publication for iPad readers using HTML5 and bypassed Apple.

Apple is probably learning more than it ever imagined about the economics of the publishing business, and perhaps, in time, the 30 percent take will be amended, or Apple will negotiate special agreements with consortiums like the one in France. In any case, we can expect to hear more and more about how various publications are coping with the new digital economy of the iPad.

Comments

Lee Dronick

They are drawing a maginot line in the sand.

geoduck

?I make less money selling a digital edition of the newspaper (on the iPad, with 30 percent Apple cut] than I do on the print edition sold in a kiosk.?

Of course if the situation in France is like over here they are selling fewer papers in kiosks. I also find it very hard to believe that the 30% going to Apple is more than they pay for newsprint, ink, printing the paper, shipping the papers, the kiosk owners cut, and then disposing of unsold copies.

For example, the UK?s Financial Times, after launching a popular iOS app, recently changed gears and launched its own Web site publication for iPad readers using HTML5 and bypassed Apple.

If the French papers can’t make a go of it this is what they should do, not get all whiney about how Apple is keeping them from making money. It’s not like it’s the only way to do it.

Lastly I would think eight companies representing nearly all of a particular industry in one country trying to fix the price they are willing to pay would be some kind of collusion, or cartel, or something. If this happened in the US I think the SEC would be looking very carefully into if it violated some law or other.

stens

They are drawing a maginot line in the sand.

Lucky I wasn’t drinking anything when I read this or my screen would have been a mess. Thanks, Harry, that comment made my day.

Bryan Chaffin

They are drawing a maginot line in the sand.

Brilliant! :D

Nemo

Dear geoduck:  You are right.  This joint action could be actionable violation of antitrust law.  A joint committee to set price by controlling supply and by boycotting are dicey things under U.S. law.  Joint action by such a committee in a way that effectively controlled the supply of newspapers and magazines in ways that affected the competition among mobile OS platforms and their respective ecosystems is, I think, illegal, especially where, as here, the publishers can individually set up their own websites or individually negotiated deals with Amazon and/or Google.  The availability of Google’s Android, Amazon, and the ability to set up one’s own website means that Apple does not have such dominance and control of access to mobile consumers, that such joint action might be excused.  And even then, the proper remedy would be an antitrust suit against Apple, not joint action to control supply and prices.

The other problem is that at its 30% commission, Apple is running the App Store at about breakeven.  No competition regulator would or has the authority to force Apple to run the App Store at a loss just so publishers can make the profits that they would like to make.

Finally, this dispute is really not about Apple’s 30% commission but about access to the even more valuable customers’ data.  If Apple, like Amazon and Google, simply forced its customers, as do Google and Amazon, to accept a privacy policy that allowed it to seize and transfer that customers’ data to publishers, for a consideration or with the right to share in the exploitation of that data, then there would be no dispute.  But Apple’s position that the customer’s data belongs to the customer so that publishers must get each customer’s informed consent to acquire and use that customer’s data, is an anathema to publishers, who apparently are not willing to seek customers’ consent for their data by telling customers what data they want, why they want it, and how they will use it.

Well, Apple’s protection of customers’ privacy makes it particularly difficult for regulators anywhere to attack Apple, because to do so would show that they are not protecting customers’ privacy but abetting publishers in violating that privacy.

Taken together, the violation of customers’ privacy and the fact that publishers have competitive alternatives to Apple’s iOS devices and App Store mean that publishers will get little or no help from government regulators and run the risks, I think, that in Europe their joint action may be actionable violation of competition law.

Windsor Smith

I would think eight companies representing nearly all of a particular industry in one country trying to fix the price they are willing to pay would be some kind of collusion, or cartel, or something. If this happened in the US I think the SEC would be looking very carefully into if it violated some law or other.

Hmm, I dunno…. Antitrust laws in the U.S. (and elsewhere) seem to be focused exclusively on monopolies and collusion among sellers, and not at all on monopsonies and collusion among buyers. Besides, one could easily argue that Apple has far more market power in this situation than publishers do since the iPad commands such a large share of the e-reader market, and since Apple prohibits anyone else from setting up a competing app store on it.

wab95

They are drawing a maginot line in the sand

Well-played, Sir Harry!

wab95

This joint action could be actionable violation of antitrust law.


Nemo,

It will be interesting to see whether the European courts, particularly a French court, will take that tack. My observation is that these courts in particular seem to take a more socialist interpretation of competitiveness than their US counterparts.

geoduck

It will be interesting to see whether the European courts, particularly a French court, will take that tack.

Agreed. I would be kinda’ surprised if a French court ruled against French companies in a dispute with an American company.

Nemo

Gentlemen:  I don’t opine on European competition law, because I don’t know it and am not qualified to practice in the EU.  So, with respect to European law, my comments were no more than speculation.  However, I do know that French companies are subject to EU competition law, and the agency that regulates EU competition law is the European Commission, specifically Commissioner Joaqu?n Almunia.  The Commission does prohibit, as does U.S. law, any combination, cartel, or agreement that restrains competition in markets.  See http://europa.eu/pol/comp/index_en.htm.  So publishers in France may have something to be concerned about, as they take joint action to against Apple.

However, given that the publishers’ joint action is likely to be ineffective and because the publishers’ have the ability to compete by setting up their own websites or striking deals with the App Store’s competitors, I doubt that Commissioner Joaqu?n Almunia will find any significant restraint or risk to competition that would warrant the Commission’s action.

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