Apple Unveils iPad Magazine Subs Model


With big consumer magazine publishers striking subscription sales agreements with competing device-makers, longtime holdout Apple is taking a more conciliatory line. It is unveiling a digital subscription model for the coveted iPad and other devices, which will also include newspapers, video, music and other kinds of content. 

But magazine publishers are still likely to object to Apple's standard revenue split, which gives the tech company 30% of all sales.

The subscription model -- the same used for News Corp.'s recently-launched digital newspaper "The Daily" -- lets users buy subs for magazines and other kinds of content through Apple's App Store. Most publishers were previously limited to single-copy sales, making it more difficult for digital editions to gain traction with iPad owners.

One of the main points of contention has been how much customer information Apple shares with magazine publishers for marketing purposes. The tech company has relaxed its previous prohibition on disclosing consumer information to publishing partners, by agreeing to share the name, email address and Zip code of customers who subscribe to digital content -- provided the customers consent.

Apple will also allow publishers to seek additional types of information about customers, but always on a strictly voluntary basis.

Plus, Apple has relinquished some control by allowing publishers to sell digital subscriptions via their own Web sites, and to offer free digital editions to people who already subscribe to the print version. Publishers get to keep all the revenue from subs sold outside the Apple app store -- a significant concession by Apple on another controversial issue.

Apple CEO Steve Jobs presented the rationale for this approach in a statement: "Our philosophy is simple -- when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing."

Still, publishers are likely to object to the 70-30 revenue split for sales conducted through the app store -- already a sore point with single-copy sales.

Separately, Apple faces growing competition from other device makers and operating systems, which have been more flexible when negotiating subscription deals with publishers. Also this week, Conde Nast announced that it would have digital Android versions of Wired and The New Yorker ready to launch coinciding with the planned debut of the Motorola Xoom device.

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