Apple is working on a newspaper subscription engine for the iPad, according to a report from The San Jose Mercury News. Citing unspecified “industry sources,” an industry of which The Mercury News is obviously a part, the newspaper said that Apple is expected to announce the new service “soon.”
One of the sticking points between magazine and newspaper publishers and Apple has been the issue of who controls subscriber information. Even before the device was announced there were reports of publishers who were irate that Apple has insisted it would retain control of subscriber information through iTunes.
Publishers have traditionally used such demographic information as the core of their advertising sales engine. According to the report, Apple is trying to solve this roadblock by developing an opt-in system for newspaper subscribers to provide information to publishers.
Another issue has been Apple’s preferred revenue sharing agreement, where newspapers get 70% of revenues and Apple keeps 30%. In exchange, Apple delivers the customers, manages the transactions, and handles fulfillment.
This is the same deal that app developers get, and the same deal Apple worked out with record labels and TV and movie studios for iTunes. Newspapers wanted to pay Apple a set fee, and not a commission, according to The Mercury News.