Apple and magazine publishers at odds over subscriptions?

MediaMemo is saying Time Inc. is having trouble setting up their own subscription service for a Sports Illustrated iPad magazine app:

Last month, the publisher was set to launch a subscription version of its Sports Illustrated iPad app, where consumers would download the magazines via Apple’s iTunes, but would pay Time Inc. directly. But Apple rejected the app at the last minute, forcing the Time Warner (TWX) unit to sell single copies, using iTunes as a middleman, multiple sources tell me.

First, at the iPhone 3.0 event in 2009, Apple showed off App Store subscriptions for magazines alongside in-app purchase, but while in-app purchases are now fairly common, I'm hard pressed to find a showcase example for App Store subscriptions. What happened to them? Are publishers not eager to embrace them or has Apple not provided the mechanism?

Second, it looks like Time is trying to go around the App Store for subscriptions, kind of like what Amazon and Audible do for users who buy books via Mobile Safari on the web but can then download their library in-app. Is Time trying to do something similar to that but not getting their app approved?

So what happened? The Time Inc. insiders I talked to don’t have a clear answer, presumably because they can’t get one from Apple itself. One theory: Apple is concerned about the publisher’s plans for the consumer data it would collect with each subscription. A darker one: Steve Jobs loves the idea of digital magazines and wants to control the market for himself.

"Darker" certainly scores the melodramatic points, but Apple had no problem rolling out iBooks while still allowing the aforementioned Amazon Kindle app and a host of other competitors. They've let streaming music and video apps in to vie for music money against iTunes.

Due to the opaque nature of the App Store approval process, and Apple's secrecy surrounding unannounced features and technology, there's never an easy way to tell if a delay is political, business related, or because Steve Jobs will be announcing some new magazine-focused API for subscriptions in September.

These are huge companies, there's a lot of money on the table, and a critical amount of personal user data behind it. I'm sure we'll see a lot of foot stomping and fist shaking, and press leaks to spin the story. I'm sure we'll hear cries that evil Apple is denying big publishers their control, and big publishers are gouging users for digital copies. Fine. At the end of the day I want what I think most end users want -- an easy, secure, privacy-protecting way to get my magazines (and comics!) on my iPhone and iPad at a fair price. Apple wins. Publishers win. We win.

Let's figure that out, shall we?

[MediaMemo, thanks to everyone who sent this in!]

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Apple and magazine publishers at odds over subscriptions?


I've downloaded an issue of Time on my iPad and an issue of Sports Illustrated as-well. I love digital mags on the iPad, it feels like that's what it was tailor made for. However, pricing could be lower for single issues and they should most definetely have subscriptions available.
I use the Zinio app and have a subscription to Bloomberg Businessweek and Car and Driver (which offers digital only content like videos, etc just like Time and SI). Fortunately Zinio offers a good selection of subscription mags, however not all has extra digital content. Yet even without the extra videos, photos etc and just in pure digital copy of the print edition I much prefer readingthe mags on the iPad than I do in print. Alas I cancellled all my print magazine and newspaper subscriptions.

I think that this is a balancing act right now, one that Apple can eliminate with a well-designed and thought out Apple solution.
On one hand, Apple wants to keep the purchases in-app right now because they get 30% of the App Store sales. This, to me, is only fair because the updates are stored on their servers and downloaded from them. Also, when it is done through Apple, we can keep using our iTunes accounts without having to worry about fifteen different accounts each with different passwords. Hopefully a consistent & simple user experience could be maintained no matter if it is Popular Mechanics or Highlights(kids' magazine.
On the other hand, we have the problem of online access and the fact that maybe Apple doesn't deserve 30% of the profit. With the current iTunes purchasing model, there is not way for a publisher to give you monthly magazine updates for free if you have a subscription to their online site, and vice-versa. For example, the Wall Street Journal is a great news source, IMO. However, I would never pay for iPad, iPhone, & online subscriptions. I only need one but should be able to access them all for the same price - it is the same stories in a different format. Apple's current model prevents that. Also, let's say a magazine adopts the "Kindle App" model in which users purchase the subscription through the web on the magazine's servers and then download - no cost to Apple so they really don't deserve any money. The problem with this is that it yanks you out of the app and there is no consistent experience from app to app.
The fix - Apple gives a little and so do the publishers(you can stop laughing hysterically now, it's not thaaat funny). Apple needs to let publishers have access to who is subscribed to their app so that they can offer subscribers free access to their online magazine. Apple should offer special magazine development tools that gives each magazine a genuine feel, basically all of the controls, including brightness, found in iBooks. Maybe even offer an iMagazines app so you can manage your subscriptions through iTunes and have them all in one place. However, Apple also needs to let you download each month's issue from the publisher's servers, in app, and take a lot less of the money from these in-app purchases, perhaps 5%. Obviously Apple would heavily screen these servers.
The publishers also need to compromise - this is a new ball game that they must adapt to. This means innovating and doing their best to offer subscribers the app for free if they already pay the company. It really boils down to being less greedy and displaying some common sense because who wants to, and more importantly, will, pay for an iPad and online subscription - not many. Also, they cannot expect to be paid as much money per issue as a print subscription, even if it is more expensive to design a emagazine - the Golden Age of print is dead!. (On a side note, Apple needs to make student discounts for this a reality!, IMO).
The bottom line is that Apple needs to take the lead on a publishing solution, and not just put magazines into iBooks, because iBooks could be improved - ever just try browsing the iBookstore?(ie, not just search for something but try to find something you like). Apple needs to realize they can't and shouldn't get 30% of the money from each magazine subscription. They need to either develop a kick-apps iMagazine app or make it easy for publishers to make magazine apps that provide a relatively consistent user experience. Magazine publishers need to realize they might not make quite as much money and offer their iPad version free to online subscription. Here's looking at you, Steve. Give us an Apple solution!

Sorry about the format of my comment, beats me why it did that. I hit enter after each paragraph and hit the space bar five times to indent.

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