Apple’s subscription plans – my $0.02

Last week the publishing world (at least the subset publishing magazines and newspapers) was set on fire, as Apple was apparently starting to tell some of them (either personally or via email) that it is changing it’s plans wrt. paid subscriptions of periodicals accessible via apps in the app store.

First, on Jan. 14th there was a blog post (dutch) from the publisher of the dutch newspaper Handelsblad telling that Apple approached them telling them that they had to stop the free access to the iPad version of the newspaper that is available to their print subscribers until April 1st.. Other Publeshers joined in and this was widely reported, e.g. here. I then also heard some rumors that a number of german newspapers and magazines have been contacted as well.

These actions by Apple are obviously connected to the “more than” rumours that Apple is prepraing it’s own subscription service (together with it’s launch partner NewsCorp and it’s new iPad-only daily newspaper: “The Daily”.

Yesterday evening Frédéric Filloux of MondayNotes.com provided the IMHO best account on what is happening right now in his post Apple’s bet on publishing. I urge you to read Filloux’s whole post, especially since i share his opinion that Apple’s solution is more aiming at the “Long Tail of Publishers”.  On the other hand the provided excerpts of the purported emails at least to me sound rather like a reminder of existing rules than a complete change of plans. The discussion is then taken on e.g in a R/WW post titled:  The New New Media: Apple’s subscription model.

Based on all this it is my current belief that

Apple’s recent actions do not signal a fundamental  change to their assumed inofficial position prior to theses actions.

With the  assumed inofficial position (more on this wording below) being:

  • Same digital content available in other digital channels via own fulfillment backend is OK
  • iOS only content via own fulfillment backend is NOT OK

At least i assumed this position based on my readings and my talks to various people in the industry. But as you can see i am not alone. Have a look at the comment thread at Peter Kafka’s Media Memo post: Time Inc.’s iPad Problem Is Trouble for Every Magazine Publisher (especially Ian Betteridge’s comment).

In some follow up posts i’m going to elaborate on why i think that Apple’s position hasn’t changed  fundamentally and also elaborate why obeying to these rules is particulary difficult for publishers of periodicals.

For now you have to live with the management summary:

  • If the first rule would be revoked, various Apps selling Books and streaming video including Amazon Kindle, Google Books, Hulu Plus and Netflix would violate them. First I haven’t heard that they have been notified and second Apple would have a harder time to revoke this Apps.
  • Publishers of periodicals and service providers like Adobe and Woodwing wanted to build new digital content bundles that take advantage of the capabilities of multitouch devices and not just display PDFs. Since for these new products right now there is no other channel than the iPad  they cannot argue that they are distributing the same digital content on multiple digital channels. In addition most of them also deliberately chose not to distribute the same content via the most obvious channel: The browser. The publications that did so, most notably the WSJ and the FT have been allowed into the App Store. I haven’t heard that they have been noticed.
  • Compared to all other publishers, publishers of periodicals right now have a unique disadvantage on Apple’s platform. There is no way to do the content delivery via the platform, they had to build that part of the fulfillment platform themselves. Nevertheless they had to use Apples’s Billing Infrastructure for In-App-Purchases of single copies and the same 30% Apple cut applied.
  • The result of this hole in Apple’s fulfillment infrastructure were Hybrid Apps that used significant backend infrastructure from the publisher /service provider (content delivery)  and Apple (billing) and opened the door to all kind of variations.
  • I think that Apple will fill the content delivery hole in their fulfillment system with their rumored subscription solution. If not the publishers have all reasons to complain about that disadvantage.
  • For the future i could imaging the following rule agreed upon Apple and all of its content providers:
    • Apps are only allowed to use either Apples fulfillment infrastructure and nothing else, or they have to build all of it by themselves (like Hulu and AFAIK all of the other examples from above etc. did). This should be a rule that everybody should be able to live with.
  • This might mean that a number of publishers would have to deploy two Apps on the App store but my guess would be that Apple is going to provide a separate Kisok app (similar to iBooks) for those who choose the first route.
  • My worst fear is that Apple is than overregulating the format of the conten bundles / issues that is going to be delivered via their infrastructure.

So if anybody knows of a publisher / App that plays along the above rules and has been notified i would be utmost interested to learn about it and have a closer look. The first question of such a publischer should be: what about Hulu. netflix, Amazon Kindle, Google Books etc

I would also like to hear some technical rumours about Apple’s subscription / iNewsstand. But i guess that besides a select few partners with draconian NDAs nobody knows right now. Everybody else has to wait until the announcement Another question of interest on this side of the pond is whether  and when it will be rolled out in markets other than the US.

But IMHO the biggest problem of it all this FUD is that there is only an assumed inofficial position and not an official one. That makes it particulary difficult for people like me , who are building systems for periodicals but are not on Apple’s radar, so they do not get the chance to talk to Apple and learn the inoffical one that is only deliverd orally-

Disclosure: For more than a year i’m actively involved (in my capacity as the head of the dpa-newslab) in the developement of various e-reading solutions. Since May of last year we are focusing most of our efforts on a framework for newspapers with the obvious first incarnation as an iPad App.  Since we are not a big publisher we do not have any direct connection to Apple. We also don’t have an App in the store yet, so we couldn’t have been rejected yet :-)

I’ll share more on our approach to in upcoming posts. For the purpose of this post it suffices to say, that on the business side we early on dedided to play it save and start with a single-copy In-App-Purchase, and to avoid any “clever” subscription scheme. For the curious. We decided to do a Web-Technology first approach . Our content packages are purely web based (HTML5, CSS§, Javascript and JSON), and we  only use a native rendering when the typical shortcomings of mobile devices kick in and affect the user experience: These shortcomings being slower processer, less memory.

A nice side effect of this approach in the context of this post that it makes it easy for us to come up  desktop browser version and hence a second digital channel for the same digital content.