updated 01:10 pm EDT, Wed September 15, 2010
Could circumvent obstacles to industry
Apple will soon announce formal subscription support for newspapers distributed through the App Store, says the San Jose Mercury News. While most of the details are not clear, industry sources claim that Apple has agreed to provide an opt-in clause for subscribers willing to share information with publishers. Newspapers have traditionally relied on subscriber data to sell the ads that keep a publication afloat.
The structure of the App Store has served to deter publishers from producing iOS apps, particularly for the iPad. While some magazines have come up with workarounds for enabling subscriptions, there is no Apple-backed system, and privacy rules prevent companies from harvesting data for marketing. By contrast, subscription options are already available on e-readers from Amazon and Sony.
Several risks may be present for publishers turning to the iPad. Although the tablet is seen as a potential savior of the newspaper industry, switching over from print to apps before ad revenue is high enough could cause serious financial damage. Similarly, Apple could potentially demand large cuts of both ad and subscription revenue, in the same way that it claims 30 percent from all app sales.