Commentary

Apple Offers Subscription Model...Finally

In what may be that rare example of Apple actually caving to external market pressures, the company finally announced this morning its subscription model for iOS apps. Now newspapers and magazines can offer recurring billing for access to their digital versions. According to Apple the purchases will use the same billing system as one-off purchases and Apple will retain its customary 30% of the take. Customers are automatically charged on a weekly or monthly basis and they can manage their subs from their iTunes account page.

Here is Steve Jobs himself stating the Apple policy. ""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." Apparently publishers will be free to give existing subscribers to a print pub complimentary access to the corresponding app, and the publishers even can sell digital subscriptions outside of the App Store and give those users access to the apps. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app," Jobs says. "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."

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The key piece in all of this, however, has to do with the precious data. Periodical publishers have been at odds with Apple over data sharing, since for most magazines especially, it is the user's name that has even greater value than the subscription fee. Until now, Apple has held this data tightly and driven publishers to loudly announce plans to deploy on Android and HP's WebOS instead.

Whether Apple is feeling the heat over these announcements is hard to say. We know that Apple has been discussing a subscription arrangement all along. But now the company seem to have come up with a plan for data sharing that puts the consumer in control. According to this morning's statement, customers who purchase a subscription in the App Store will have the option of giving the app publisher their name, email address and zip code at sign-up. "Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher's privacy policy rather than Apple's," says the press release.

This is clever of Apple. The move offers a model that should have been in place from the beginning -- but also brands the company as a privacy guardian. One of the most interesting and underreported stories around Apple's breakthrough success in mobile is how it has catapulted the company into entirely new relationships with media (relationships that have gotten increasingly rough through the years). The famously closed Apple OSes now have to learn to play nicely with third parties in ways they never did before. Ironically, this puts Apple in the same position the carriers found themselves in as smartphones began to rise. The carriers never really got used to being media companies, which meant having to share data, cooperate on marketing, and actually give others some measure of control.

Apple is smarter, but it seems to be making new rules for itself and its partners as they go along. Apple strategists recognize that they are as dependent on good content as every other part of the content distribution  ecosystem. But they also know that the world loves them -- and all of their media partners are a bit scared right now.

Will this make the world better for newspapers and magazines? I sure hope so, because I continue to think that some of these companies really are thinking very hard about what mobile screens and delivery systems can do.

Today's launch of Sports Illustrated's annual Swimsuit Issue is a case in point. For those who have been rightfully complaining about paying high per-issue fees for magazines on the iPad, I would recommend them trying the $6.99 digital version. It is simply a better experience than print or the Web. The videos of bikini-clad models are all over the place, seamlessly combining the lean-back experience of thumbing the magazine with the lean-in experience of going to the SI Web site and getting the multimedia.

Even better, advertisers like RAM Trucks and SoBe drinks have integrated both multimedia and the swimsuit themes content exceptionally well. The SoBe iPad ad is among the most sophisticated ad-as-app I have seen, including an embedded contest that lets the users play photographer and grab the best shots of a body-painted model. The M&M ad is a full video of a female candy piece talking about her SI photo shoot and peeling part of her candy-coating. This is the kind of creative that makes me optimistic that periodical media finally are focusing on the digital opportunity to enrich, not just repurpose, themselves.

1 comment about "Apple Offers Subscription Model...Finally".
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  1. Bruce May from Bizperity, February 15, 2011 at 3:06 p.m.

    This is so significant for all the reasons you state and more. Imagine what the record labels would say if they could only get a deal like this? Maybe they can find a way to leverage the subscription option (any music producers out there willing to take a chance with online concerts?). The iPad is giving us all a whole new experience and new tools for producers to create content that truly fulfills the promise of digital media.

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