Original URL: http://www.theregister.co.uk/2011/02/15/apple_subs/
Steve Jobs unveils 30% subs model for ... everything
Publishers get 'magical, revolutionary' our-way-or-the-highway deal
Apple finally unveiled the shape of its new subscription model for the App store today, confirming that it will force magazine and newspaper publishers to hand over 30 per cent of their cover price.
Cupertino billed its take-it-or-leave-it T&Cs as "the same innovative digital subscription billing service that Apple recently launched with News Corp’s 'The Daily' app".
Apple has given publishers – whether of words or video or music – the power to "set the price and length of subscription", which customers can choose with a single miraculous click, before Apple processes all payments, "keeping the same 30 per cent share that it does today for other In-App Purchases".
Publishers are still permitted to "leverage other methods for acquiring digital subscribers outside of the app," – ie, sell digital subscriptions on their website without having fork out cash to Apple. But, of course, they then have to provide "their own authentication process inside the app for subscribers that have signed up outside of the app".
As well as kissing goodbye to 30 per cent of the take, publishers can also kiss goodbye to knowing who their readers are. Apple's process will give buyers the "option" of providing their name, email, and zip code.
With razor thin margins in digital content, 30 per cent may well be too much. It's almost certainly going to be too much for Amazon, who may discontinue their iOS Kindle app, rather than make a substantial loss on sales.
This is one of the benefits of controlling your own platform – and magazine and newspaper publishers have only themselves to blame. They've had years to come up with their own, owner-operated distribution mechanisms, but failed to do so. Most recently, the newspaper industry collectively shunned Project Alesha, a common payment platform, because they didn't trust Murdoch, who wanted to share the technology with rivals.
If this all sounds like the deck is loaded in Apple's favour, consider this: Steve Jobs took a break from his sick leave to extol the benefits of the new model.
“Our philosophy is simple – when Apple brings a new subscriber to the app, Apple earns a 30 per cent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 per cent and Apple earns nothing,” said Jobs, Apple’s CEO.
"We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”
Subscribers, apart from the joy of ensuring cash goes to Apple instead of to content providers, will get a personal account page which will allow them to cancel automatic renewals. Which at least means a moment's weakness in the face of a surprisingly attractive Trotskyite doesn't mean you're saddled with a copy of Living Marxism turning up on your doorstep every month until the end of time.
And no doubt regulators will be please to see Apple's new T&Cs. Belgian regulators have already been sniffing around Apple's subs plan. Now they'll be able to get stuck in proper. ®