Rumor: Mindful Of Its Own Profits, Apple Working On Newspaper Subscription Plan
September 16, 2010
It looks like Apple will soon announce a new subscription plan for newspapers on the iPad. So far, national newspapers like The Wall Street Journal allow their subscribers to use a free app to read their daily publications. However, this new plan could increase the number of iPad-based newspapers that enter the App Store. Still, it all boils down to money and how much of the pie Apple wants to take.
According to Roger Fidler, head of digital publishing at the Donald W. Reynolds Journalism Institute in Columbia, Mo., the specifics of the plan are all about money. Fidler concludes that Apple will most likely take a 30 percent cut of all subscriptions and as much as 40 percent of the advertising revenue from each app itself. This information was first reported by the San Jose Mercury News.
Publishers, according to the report, had been pushing an "Apple pays a fee" model, but instead the Cupertino, California-based company has been using its leverage in demanding a revenue sharing model. With the iPad dominating the young tablet market, Apple will certainly get its way and publishers will have to pony up to get in on the action.
With declining print circulation and advertising revenue affecting media companies across the board, any new source of profits will be welcomed. Once Apple establishes the rules, those new profits could be realized quickly.
As part of the rumored plan, Apple will provide an opt-in function for subscribers, which will allow the company to share their information with publishers. This would include vital data that news organizations use to attract advertisers.
Fidler stated that publishers desperately "want the data of their customers so they can integrate it into their circulation database so they know who their customers are."
Apple had no official comment on this rumor. However, some sort of announcement is expected sooner rather than later.
