Apple launches in-app Subscriptions…

  • Posted: 17 February 2011 06:37 AM #61

    re: Google One Pass

    ... said Google Chief Executive Eric Schmidt in Berlin on Wednesday. “We don’t prevent you from knowing, if you’re a publisher, who your customers are, like some other people”

    In other words, Google is still in the business of stealing your privacy and selling it on without your knowledge. And Apple isn’t.

    For well over a hundred years, it’s been possible to buy a single copy of a publication at a newsstand completely anonymously. It’s a very enjoyable component of a typical city day. But the greedy publishers want to have Google follow you home and pester you with demands to buy more. They want to take away your freedom to choose on a daily basis by cross-linking the purchase of one piece of content to others with subscriptions and bundles; complexity that you don’t want. It’s the channel/portal model and apart from a few mega-niches (ebay, amazon), it should be dead; killed by the internet.

    Once created, content costs nothing.  All the costs are distribution. 30% is a very reasonable amount to devote to providing an excellent experience for the consumer. Up to 70% gross margin for the creator is fine. Having the consumer pay for what he reads/views is perfectly reasonable. And 30% is a reasonable amount to spend on maximising the number of sales. The content creator’s dirty secret is that he’d rather you stole his content than simply ignored it. He’s willing to spend even more than 30% if it gets more viewers.

    This story is the Apple retail stores all over again; “greedy Apple spending the consumer’s money creating a walled garden”. And it turned out that’s what the consumer wanted, even though he may not have realized it. He just doesn’t want to be locked in. Thus far, Apple have proved to be trustworthy.

    The Apple way allows the individual and the small publisher an even playing field with the largest. It gives the big boys competition from the small. And in general the small produce far better specific content than the big and powerful. (Just compare among Apple financial analysts.)

    Thank you Apple; I think you’re creating a new society and a new economy, and you’re devoting real resources to making it happen. Most people will be fine with paying their share when they understand.

    Google is looking to lock down its role as king of a Balkanized internet that delivers a miserable end-user experience.

    [ Edited: 17 February 2011 06:44 AM by sleepygeek ]      
  • Posted: 17 February 2011 10:52 AM #62

    What a great post, Drew Bear. I’d like to join in and add my two cents.

    Drew Bear - 17 February 2011 07:46 AM

    Their world has been destroyed by Craigslist, Autotrader, Google & others. They cannot expect to regain the kind of profits they were accustomed to in the pre-internet era. Yet that is what they are still pining for.

    Spot on analysis.

    ?ITunes was going to save the music industry and instead it shifted their model from an album model to a per song model. It?s decimated the industry.?, said Ron Adner, an associate professor of strategy and management at Dartmouth College?s Tuck School of Business.

    Drew Bear - 17 February 2011 07:46 AM

    Another intelligent intellectual who misunderstands what happened. Piracy decimated the music industry, not Apple or the per song model. The music industry tried to fight it with DRM and tried to retain the same profit levels through high prices. 10 yrs. later and they still don’t get it. Instead of dropping the prices to 69?, they raise it to $1.29 and wonder why sales have fallen.

    Again, great analysis. The next line in the article is telling:

    Adner doesn?t see the exact analogy here, but he added that publishers are panicking and moving too quickly.

    Say what? The last thing the publishers are doing is moving too quickly. They should have changed their model five to ten years ago. Adner is right when he says this is no time to panic. The time to panic was long ago.

    Adner…added that publishers are panicking and moving too quickly. Both Apple?s and Google?s offerings have a few positives, but at this point, it is unclear whether those positive are enough to get consumers pay premium prices for content.

    Drew Bear - 17 February 2011 07:46 AM

    No, no, no! Consumers are paying nothing for content right now. Don’t hope they’re going to pay preimium prices. And quit trying to blame the deliverers of content. Look at the content providers themselves.

    People aren’t buying the iPad version of the NY Times (or The Daily) because there’s something wrong with the way Apple gets them to the iPad. They won’t pay for the content because it doesn’t add enough value and it costs too much.

    What can I say? Spot on again.

    So far, content owners haven?t seemed interested in keeping prices down. Even before Apple announced its plan, prices for many news products for the iPad were priced in the premium range. Time Warner Inc.?s Time Magazine charges iPad readers pay up to $5 for each digital issue, while a subscription to a year of the print version costs just a little over 50 cents an issue.

    In other words, Time has marked up the digital issue of its flagship magazine by ten-fold, despite not having to print and mail it ? and that?s without Apple?s juicy cut.

    Drew Bear - 17 February 2011 07:46 AM

    Idiots! I say let them die and make room for a new breed of publishers.

    Sadly, you’re exactly right again. The big publishers may merely be dead men walking.

    Publishers are asking the wrong question. They’re asking: “How can we save our industry?” Your industry is already dead. Move on. The question you should be asking is “How can we provide the customer with extraordinary value?” When you ask it that way, you begin to innovate. You focus on customization, convenience, ease of use, uniqueness, etc.

    Apple is providing a superb delivery mechanism. It’s up to the publishers to provide a product worth paying for.

         
  • Posted: 17 February 2011 11:18 AM #63

    dduck - 17 February 2011 08:24 AM

    Well, the Apple model is all about protecting the users.

    That message seems lost on the pundits.

    sleepygeek - 17 February 2011 10:37 AM

    This story is the Apple retail stores all over again; “greedy Apple spending the consumer’s money creating a walled garden”. And it turned out that’s what the consumer wanted, even though he may not have realized it. He just doesn’t want to be locked in. Thus far, Apple have proved to be trustworthy.

    The term “walled garden” is always thrown at Apple like it was a pejorative. But people WANT a walled garden. They want a carefully controlled shopping environment. Fairs and bazaars have been relegated to the edges of our shopping experience. We shop in enclosed climate controlled malls, where the merchandise is tightly controlled, meticulously organized and displayed; where every aspect of the buying experience, right down to the music we listen to, is dictated by the store owner.

    When it comes to government, I’m an advocate of choice. When it comes to marketing, I’m an advocate of focus. There’s no relationship between the two and there’s no conflict between the two.

    [ Edited: 17 February 2011 11:29 AM by FalKirk ]      
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    Posted: 17 February 2011 01:59 PM #64

    Amazon & Google. Great alternatives for publishers.

    Why Google?s One Pass Could Be a Ticket to Nowhere

    Google?s One Pass is pretty much just a warmed-over content paywall. All it does is collect the money for publishers who want to put up a toll-booth around their content. In fact, the thing it resembles the most ? as Josh Benton of the Nieman Journalism Lab notes ? is the Journalism Online Press+ system that entrepreneur Steven Brill and former Wall Street Journal executive Gordon Crovitz have been peddling to newspapers and magazines for the past year or more, without much success.

    Like that system, Google?s service is essentially designed to handle the payment processing for multiple subscription sites, so users can theoretically sign up for dozens without worrying about being nickel-and-dimed by each one. There?s just one problem: There?s no sign that users have any interest in doing this

         
  • Posted: 17 February 2011 03:17 PM #65

    Drew Bear - 17 February 2011 05:59 PM

    Amazon & Google. Great alternatives for publishers.

    Why Google?s One Pass Could Be a Ticket to Nowhere

    Google?s One Pass is pretty much just a warmed-over content paywall. All it does is collect the money for publishers who want to put up a toll-booth around their content. ... There?s just one problem: There?s no sign that users have any interest in doing this

    I think Google did Apple a huge favor by announcing their alternative strategy so quickly after Apple announced theirs. The took the anti-competitive heat off and they presented publishers with two starkly contrasting business models. Now we’ll let the market decide. I’m not sure Apple is going to win. Between Apple, Google and the Publishers, it may end up being a three-way tie for last. But I’m feeling more and more confident that Google has little chance of winning.

         
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    Posted: 17 February 2011 03:59 PM #66

    FalKirk - 17 February 2011 07:17 PM

    I think Google did Apple a huge favor by announcing their alternative strategy so quickly after Apple announced theirs. The took the anti-competitive heat off and they presented publishers with two starkly contrasting business models. Now we’ll let the market decide.

    I agree. It’s interesting to see some spin this as if Google were really sticking it to Apple. Something similar happened last year when Apple did something that sort of helped Google get out of regulatory scrutiny. I can’t recall the details, though. CRS.

         
  • Posted: 17 February 2011 04:14 PM #67

    Drew Bear - 17 February 2011 07:59 PM
    FalKirk - 17 February 2011 07:17 PM

    I think Google did Apple a huge favor by announcing their alternative strategy so quickly after Apple announced theirs. The took the anti-competitive heat off and they presented publishers with two starkly contrasting business models. Now we’ll let the market decide.

    I agree. It’s interesting to see some spin this as if Google were really sticking it to Apple.

    Some people think that price is everything. They really do. Apple is charging 30%. Google is charging 10%. So Apple is screwed, right? It never occurs to them that some stores charge much more than other stores and we happily pay the premium price. Why? Because we receive a premium product or a premium experience. It happens to most everybody most every day and yet we complete ignore a lifetime of real world experience and fall back on the maxim that price always wins.

    Drew Bear - 17 February 2011 07:59 PM

    Something similar happened last year when Apple did something that sort of helped Google get out of regulatory scrutiny. I can’t recall the details, though.

    Are you thinking of when Apple bought Quattro thus making it easier for Google to escape SEC scrutiny and complete their acquisition of Admob?

         
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    Posted: 17 February 2011 04:31 PM #68

    FalKirk - 17 February 2011 08:14 PM
    Drew Bear - 17 February 2011 07:59 PM

    Something similar happened last year when Apple did something that sort of helped Google get out of regulatory scrutiny. I can’t recall the details, though.

    Are you thinking of when Apple bought Quattro thus making it easier for Google to escape SEC scrutiny and complete their acquisition of Admob?

    That’s it! Thanks.

    BTW, I wondered about that whole bidding war on Admob. Apple supposedly let an offer expire and Google scooped Admob from under their noses? Part of me wonders if Apple just wanted to force Google to spend more money for Admob when their real target was Quattro all along. Most of the top Admob execs left Google pretty quickly. I don’t know enough about how the ad industry works, but Apple usually acquires companies for the talent as much as the technology.

         
  • Posted: 17 February 2011 05:12 PM #69

    I do enjoy how Apple seems to be the only tech company that can still blow the industry up (or several industries for that matter) from time to time.

    The publishers of periodicals have been slowly slitting their own throat for years by playing with that “internet thing” and giving away all of their content for free online. What did they think would happen to their print sales? We’re they all that dumb? Which publisher is going to be bold enough to yank all of their content off of the web and start to sell it through the new tablet devices like iPad? NYT? That kind of bold move will be the signal that what Apple is trying to get people to do is starting to resonate. It’s nice to see some company dragging businesses kicking and screaming into the 21st century. It’s too bad they get so much crap for it.

    The quotes from Pop Sci and others hit the nail on the head: “If we’re making money, what does it matter?” Bold moves are what brings success, but in our era of “good enough” fear of failure is overcoming imagination and progress and the drive to try.

    Teddy said it best: “Far better is it to dare mighty things, to win glorious triumphs, even though checkered by failure… than to rank with those poor spirits who neither enjoy nor suffer much, because they live in a gray twilight that knows not victory nor defeat.”

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    Less is More (more or less).

         
  • Posted: 17 February 2011 05:50 PM #70

    Drew Bear - 17 February 2011 08:31 PM

    BTW, I wondered about that whole bidding war on Admob. Apple supposedly let an offer expire and Google scooped Admob from under their noses? Part of me wonders if Apple just wanted to force Google to spend more money for Admob when their real target was Quattro all along. Most of the top Admob execs left Google pretty quickly. I don’t know enough about how the ad industry works, but Apple usually acquires companies for the talent as much as the technology.

    I read somewhere that Jobs was furious that Google had intervened, but I have no idea if that was a reliable report or simply an unfounded rumor.

         
  • Posted: 17 February 2011 05:55 PM #71

    FlipFriddle - 17 February 2011 09:12 PM

    I do enjoy how Apple seems to be the only tech company that can still blow the industry up (or several industries for that matter) from time to time.

    I’m sure Horace Dediu wasn’t the first to say this, but he describes Apple as that rarest type of corporation: a serial disruptor.

         
  • Posted: 18 February 2011 12:29 AM #72

    Good catch Adam.

    You know, just an aside, but didn’t it seem like it took an awfully long time for Apple - or for anyone - to come up with a subscription model? It seems like it would be easy to implement. It must be much harder to do than I thought.

         
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    Posted: 18 February 2011 09:00 AM #73

    adamthompson3232 - 18 February 2011 04:57 AM
    FalKirk - 18 February 2011 04:29 AM

    Good catch Adam.

    You know, just an aside, but didn’t it seem like it took an awfully long time for Apple - or for anyone - to come up with a subscription model? It seems like it would be easy to implement. It must be much harder to do than I thought.

    Or nobody had a viable platform.

    Or nobody had the cojones to propose what SJ and Apple are proposing (30% of all sub revenue).

    Or nobody had the vision to see where these industries are going.

    Or nobody had a CEO that could pull it all together effectively and efficiently.

    Or maybe you’re absolutely right and it’s hard as hell to make it work technologically.

     

    Or all of the above.

    The platform was there.
    The vision is so simple any layman understands it.
    It’s technological pie.

    But making progress with media giants is like moving mountains.  They just don’t realize how mortal their self-inflicted wounds are.  I think I quote Falkirk. “Dead Men Walking”

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    The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled.

         
  • Posted: 18 February 2011 10:22 AM #74

    macglenn - 18 February 2011 01:00 PM

    The platform was there.
    The vision is so simple any layman understands it.
    It’s technological pie.

    But making progress with media giants is like moving mountains.  They just don’t realize how mortal their self-inflicted wounds are.

    So you think it was just a matter of negotiations dragging on? I think you’re on to something there.

         
  • Posted: 18 February 2011 10:40 AM #75

    adamthompson3232 - 18 February 2011 02:35 PM

    What negotiations? Apple didn’t really negotiate at all with anyone from what I can tell other than Rupert and The Daily. Apple simply stated its terms and will now let everyone take it or leave it. I expect nearly all of them to take it sooner or later, and most of them sooner.

    Not entirely sure that I agree with that Adam. I suspect that a lot of negotiations about this went on from 2008 through 2010 and Apple in the end got fed up and went with the 70/30 split, giving some concessions to the mags for their subscription data.

    Anyone think that Job’s leave of absence had more to do with not wanting to be involved with The Daily launch?  LOL

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