Google Strikes Back On Digital Subscriptions

by Mark Walsh, Feb 16, 2011, 4:30 PM

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A day after Apple unveiled its digital subscription plan, Google Wednesday fired back with its own, clearly trying to woo publishers away from its rival with more attractive terms.

Through its new service, Apple takes its standard 30% cut of sales and requires that any purchase offer outside the app must be at the same price as the in-app offer. Apple also controls subscriber information like email addresses and zip codes but allows customers to provide that personal data to publishers if they wish.

 

With its new One Pass service, limited for now to online newspapers and magazines, Google will collect only 10% of subscription revenue and share the a subscriber's name, zip code and email address with a publisher, unless specifically asked not to by the customer. Google will also let publishers give existing print subscribers free or discounted access to digital content, according to a blog post today. Take that, Apple!

Certainly, Google is aiming to capitalize on qualms about Apple's new subscription offering, with some publishers balking at conditions set by the company. A Time Inc. spokesperson, for instance, called the Apple initiative a "step in the right direction" but expressed concerns about the terms, especially around control of subscriber data.

Forrester analyst James McQuivey today suggested that Apple is giving publishers a raw deal. "Remember, subscription content is priced as low as it can be to drive interest while paying off reasonable costs. Taking a 30% toll amounts to a massive increase in the cost basis of a content business that will kill it," he wrote in a blog post. The only way to survive is to past on the extra cost to subscribers, he suggested.

As the underdog to Apple in the digital content arena, it's only natural for Google to try to undercut the top player on price and flexibility to gain more market share. While Android is spreading rapidly, the iPhone and iPad have been the premiere platforms for magazine and newspaper publishers launching digital editions. And Google Checkout--which will handle payments via One Pass--is hardly as well entrenched or regarded as iTunes.

Eric Chu, group manager of Android at Google, admitted last month that Google wasn't happy with sales in the Android Market to date. He said Google would introduce in-app payments and carrier billing options to help boost premium app sales.

Some publishers are betting on both company's subscription plans. Bonnier Corp. has adopted both Apple's and Google's new services. "The No. 1 complaint we've had about the App Store is that people want to have subscriptions," said Sarah Ohrvall, head of research and development at Bonnier, which has launched Popular Science and other titles on the iPad.

She conceded that Google's terms were better and said she also liked that One Pass allows readers to access publisher content on tablets, smartphones and Web sites using a single sign-on with an email and password. Bonnier last year released a one-off issue of Popular Science for the Galaxy Tab last year but will soon roll it out on a monthly basis for the Android tablet to be followed by other magazines. "We just want to put the consumer first,' said Ohrvall.

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