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Apple unveils iPhone, iPad subscription policy
Question of the Day
NEW YORK (AP) - Apple Inc. announced a subscription system for buying newspapers and magazines on iPhone and iPad applications on Tuesday, making it easier for publishers to mine the popular mobile devices for more revenue.
The update announced Tuesday enables publishers to sell subscriptions by the week, month, year or other period of time, instead of asking readers to buy each issue separately.
The added convenience promises to help publishers sell more digital copies as they look to smart phones and tablet computers to replace some of the revenue that has disappeared over the past few years as readers and advertisers migrated from print editions.
But publishers won’t be allowed to automatically collect personal information about people who buy subscriptions through the Apple apps. That data is prized by publishers because they use it for marketing purposes.
Instead, subscribers who sign up through an app on an Apple device will be given the option to share their information with publishers, a choice most people don’t make. If people don’t share their information with publishers, Apple will still hold onto it, though it will not pass it on to the publishers or other third parties.
Time Inc., whose magazines include Sports Illustrated, People and Time, applauded Apple for allowing publishers to sell app subscriptions, but said it still has questions about access to customer information. Sports Illustrated, for one, already has worked out deals to sell subscriptions with access to customer data on computer tablets running on software made by Apple rivals Google Inc. and Hewlett-Packard Co.
Apple will take its standard 30 percent cut from all app and content sales made in its iTunes store, which peddles a variety of music, movies, games and e-books. This new subscription system also applies to video and music services _ for instance, the app for Netflix.
Content providers that don’t want to automatically give Apple a slice of the revenue can try to sell subscriptions outside the app, too. One way to do that would be through the Web browser, although that might prove too much of a hassle for people already used to buying apps, music and other things on iTunes.
Apple is insisting the financial terms of the digital subscriptions sold outside the app be no better than those offered in the iTunes store. And people must have the option to buy subscriptions within iTunes, if they want.
“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,” Apple CEO Steve Jobs said in a statement. Jobs, a cancer survivor, is on medical leave but continues to serve as chief executive.
Apple’s new subscription policy follows News Corp.’s launch of the first iPad-only newspaper, The Daily, earlier this month. Its subscribers are charged through iTunes, making it the first iPad app to take advantage of this subscription feature.
More newspapers are focusing on digital devices because their biggest source of revenue, print advertising, has plunged during the past four years. Digital advertising has been steadily rising, but those increases have only made up for a fraction of the losses on the print side.
Subscriptions to print editions also have been dropping in recent years as more people turned to the Web to get news and other information for free.
In stark contrast to publishers, Apple has been thriving. The company, based in Cupertino, Calif., generates more than $65 billion in annual revenue and boasts a market value of $330 billion _ second only to Exxon Mobil Corp. among U.S. companies.
Apple now sees an opportunity to get even richer from these so-called in-app purchases. As part of its effort to ensure it gets a cut, Apple recently rejected Sony Corp.’s e-book reader app for the iPhone because it doesn’t give people the chance to buy books without leaving the app for a website.
By insisting on an in-app purchase option, Apple believes it is making sure people using its gadgets get a familiar experience every time they buy something _ a new level of a video game or a new issue of a magazine _ through an app. Until recently, Apple has not enforced this rule universally.
AP Business Writer Michael Liedtke in San Francisco contributed to this report.
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