The iPad Newsstand Could Work, But Will Publishers Cede Subscriber Control To Apple?

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This past May, a month after the iPad’s launch, I wrote about my changing media consumption habits due to the device. Surprisingly, I had started reading print media again after several years away. Well, reading it in digital format on the iPad. That said, I noted that there were still some big problems with the pricing that would likely stop most consumers from doing the same. Apple now appears to be on the verge of fixing that — maybe.

A few reports over the past several days have noted that Apple is in talks with magazine and newspaper companies about creating a new store — a digital newsstand, as it were — similar to the store Apple created to sell books on their devices. Through this store, Apple would sell print publications by way of subscription (and, presumably, stand-along issues also). The latest report today in the Wall Street Journal suggests such a store could launch as soon as October or November — or possibly early next year alongside a new version of the iPad itself.

From these initial reports, it sounds as if this store could be just the thing Apple and these print publications need. Currently, the magazine/newspaper situation on the iPad is a mess because each of them is an individual app. It was actually worse at launch because each individual issue of each individual publication was a separate app — most have since switched to one app for their brand with in-app purchases being used to buy new issues in that app. The launch of iOS 4.2 in November will also clean things up a bit since you will be able to stick all your magazines/newspapers in a folder to better organize them.

But a centralized repository of this content is a much better idea. Others, like Zinio, have done this, but obviously an Apple offering could be more streamlined with the device. One big reason is that Apple’s digital newsstand would use the iTunes payment system in place on every iPad out there. Magazines and newspapers would be one-click to buy and you wouldn’t have to worry about entering your credit card information again. Further, with subscriptions, you could get new issues automatically pushed to your device the day they come out.

Subscriptions account for something like 70 percent of the consumption of print media, so it’s clear that this model is needed for the iPad as well. Currently, most magazine issues cost between $4 and $5 on the device — comparable to the actual print versions — but if you look at the reviews of these apps in the App Store, nearly all of them trash the apps for not being cheaper. Considering there is no need to print anything out, nor is there a need to pay for postage, it makes sense that they should be cheaper. But if the Apple newsstand subscriptions could come in around the same price that people pay for print subscriptions (about a dollar an issue), the pricing would likely be seen as less of a problem.

But at the same time, the publishers themselves may have a problem because the reason they love the subscription model is all the data they get from it. Name, address, credit cards — all of this is used to entice advertisers to sign up. Under Apple’s new system, Apple would be the ones getting that customer data — and they apparently wouldn’t be willing to give it up, according to the WSJ report. This could be a big problem for publishers — and it may be why only one is said to be for sure on board with this idea right now.

That said, WSJ also notes that Apple may be open to different ways of letting publishers get that user information. The example given is that a newspaper could give away a free Sunday edition to those who fill in their information for that company to use.

Another potential hold-up is Apple’s current model of taking 30 percent off the top of all content sold through its stores. Of course, Apple already does this with the stand-alone magazine/newspaper apps — perhaps these guys are worried that if this model becomes a huge hit, they’ll be giving away a lot of money to Apple. Though, I think that would be a pretty nice problem for them to have given the current state of their industries.

If that’s a huge concern, WSJ also says that Apple is open to letting publishers circumvent their own subscription layer by offering one themselves inside their own apps. This is what WSJ, Financial Times, and Zinio currently does. But it’s too cumbersome of a process. The whole point of the Apple newsstand would be to streamline the ecosystem. For it to work best, all publishers would be on board offering all their content in one easy-to-consume way. You know, like iTunes.

Two other issues these publications have to address: 1) A more timely delivery of content. 2) File sizes of the content. The first issue has been annoying. People who want say, the latest issue of Wired on the iPad, often have to wait a few weeks until after it hits newsstands (and well after most of the content is already online, for free). Another big benefit of traditional subscriptions is that you often get the issue before it hits newsstands. If Apple can convince publishers to deliver this content first to their new store, that could be big. Further, a big part of enjoying a newspaper for a lot of people is getting it very early in the morning. On the iPad, for newspapers to work, it should be no different.

The second issue varies depending on the publication. Again, to single out Wired, their issues are often 500 megabytes or larger (each issue!). They need to get these way down in size if they want people subscribing to them. On the low-end iPad, for example, you could only carry about 32 (or less) issues before you were completely out of room on the device. Naturally, you can delete these issues after you read them, but you shouldn’t have to do that if you don’t want to.

Or how about this idea: magazines/newspapers getting users to sign up for a multi-year elevated digital subscription agreement and sending them an iPad with the subscription pre-loaded on the device as a “free gift”. Perhaps that would be too expensive for relatively cheap magazine subscriptions, but long-term newspaper subscriptions could pay for that. Remember, most of the money is still in advertising, and it’s all about keeping those customers they’re currently bleeding — and, gasp, maybe even attracting new ones.

[images: Disney and Paramount]

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