Apple Preps Newspaper Subscription Plan
Although publishers have looked to Apple's iPad as a potential savior, Apple has not unveiled a standard system for allowing digital newspaper subscriptions to be delivered via the new reading device. But such a plan is in the works and may launch soon, according to the San Jose Mercury News.
Apple is prepared to share subscriber information with newspaper publishers, provided the subscribers opt in, according to the report. That's an important step that could allow publishers to deliver targeted advertising based on demographic data and other subscriber characteristics.
While Apple did not comment on the rumor, industry observers speculate the tech company could take 30% of subscription revenues and up to 40% of ad revenues from newspaper apps delivering subscriptions on the iPad.
For newspapers in general, the prospects for subscription sales of digital editions is still an unknown quantity, as consumer expectations have been molded by a decade of free access. One standout -- The Wall Street Journal -- has had great success charging for online access, but it occupies a fairly unique position as the provider of high-value business information.
The results of other online subscription schemes are not nearly as promising. On Monday it was revealed that Newsday has sold a paltry 35 online subscriptions since it began charging $5 per month for access last year.
However, many argue that consumers are more likely to pay for the convenience of a mobile subscription, and the iPad has been selling at a brisk pace, so the potential audience is growing fast.
A recent report from Forrester Research estimated total e-reader sales (including other devices like Amazon's Kindle) at 3 million units in 2009 and projected another 6 million units sold in 2010, for a total of about 10 million units when 2007-2008 sales are taken into account.
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At 30 percent share for subscription revenue and 40 percent of ad revenue, it seems to me that Apple is charging a stiff fee to the publishers. Besides, there will be more than one way to deliver newspapers and magazines to tablets. Apple will soon face competition that will drive down device prices as consumer choice increases.
I suggest that the industry keep an eye on Journalism Online's "Press+" subscription service. I believe it will be device neutral and will take a smaller share of revenue, providing better opportunities for publishers.
Henry Blaufox
Hahaha - let's ignore the 50 billion browsers out there on desktops, the quadra zillion laptops in briefcases, the mungo-gungillion smartphones with browsers and sell our newspapers to the people stupid enough to pay big dollars for and iPad and THEN are willing to cough up even more to read the Wall Street Journal. I figure that's an audience of about three - so you better charge them a lot. Oh, in reference to :"the prospects for subscription sales of digital editions is still an unknown quantity" - no it's not, it's like 1%. Can I have my consulting fee now?