As expected, the tricky question of “How we gonna get paid?” has reportedly become a sticking point in Apple’s negotiations with newspaper and magazine publishers. Put simply, subscriber information is deeply valuable, and Apple doesn’t want to to share it.
Demographics are everything to magazine (and blog) publishers. It’s how you sell ads. Under the iTunes model, content producers receive sales numbers, and the money that goes with them. No credit card numbers, no addresses, no hint whatsoever of who’s buying what. This does not sit well with publishers.
Also, while the 70 per cent split makes book publishers giddy that they’re controlling their own destiny since they can set prices (good luck with that, guys) newspaper dudes are understandably less thrilled about giving away a third of the subscription, since it’s an ongoing payment. “Thirty per cent forever changes the economics,” one exec told the Financial Times. Apple won’t move on this point at all, apparently. Magazines are basically like apps to Apple. I’m sure the homogenisation of content, conceptually speaking, sits very well with publishers and their precious, glossy pamphlets.
Since both the NYT and Conde Nast’s Wired are both officially on board with launching iPad content, I’m curious if they’ve agreed to the terms that other publications are supposedly baulking at, or if they have a different kind of deal – or if their deals are in fact still up in the air.
In the end, it’ll get worked out. The glistening trickle of slobber sliding out of their lips gives the publishers away. They can’t not be on Apple’s glossy slab of the future. And then they’ll privately grumble about how unhappy they are with the crappy deal they were forced into. But whatever, because they’re just one app out of 140,000. [FT]