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Major publisher organization criticizes Apple subscriptions

updated 09:55 am EST, Wed February 16, 2011

Experts raise antitrust concerns

The Online Publishers Association is taking a critical stance toward Apple's new in-app subscription policies, according to a representative. The group includes several major publishers, namely Bloomberg, Forbes, Hearst, Time, Conde Nast and National Geographic. Its concern, claims association publisher Pam Horan, is the flexibility to serve customers.

Horan notes for instance that it is impossible to offer a bundle of print and digital subscriptions, as only digital options are allowed in-app, and publishers are banned from linking to outside sales portals. She also complains that most people will opt out of sharing extra information with publishers, used to build demographic data to attract advertisers. "Anything that requires the consumer to take yet another step is always going to reduce the number of people that participate in the process," says Horan. "It limits the ability to gather audience insights to build the right products. With this inability to know who your consumers are, it really affects the ultimate product for the consumer," she adds.

Experts contacted by the Wall Street Journal meanwhile suggest that Apple could run afoul of antitrust laws. Shubha Ghosh -- a professor specializing in antitrust at the University of Wisconsin Law School -- says he is "suspect" of Apple's subscription options. He contends that there are two main question: whether or not Apple is dominant enough to block competitors, and whether it is placing "anticompetitive pressures on price."

An antitrust professor at the University of Iowa College of Law, Herbert Hovenkamp, argues that "millions" will be spent in legal battles judging how broad the market actually is. He is skeptical of the whether or not Apple is dominant enough to violate antitrust laws, but observes that if the company locks up 60 percent of all digital subscriptions through the App Store, an antitrust complaint could "seem feasible."






by MacNN Staff

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Comments

  1. kerryb

    Joined: Dec 1969

    +13

    Magazines sell our personal info

    When you publish a magazine and the focus is on racing cars for example you the publisher must have some clue to the demographic of your readers. Magazine publishers claim they need more personal info on their subscribers to better tailor the advertisement that the reader will find helpful and resourceful, sure they do... The real reason is this information is gathered to sell to other companies so they can send you spam, junk mail and worst of all sales calls when you are in the middle of dinner.

  1. lamewing

    Joined: Dec 1969

    -6

    Simple solution

    These companies just need to leave iTunes completely. They cannot make a profit on sales in iTunes, but Apple will make a nice hefty 30% of the sales for merely allow access to iTunes. Yes, Apple should get a percentage, but no way in h*** is 30% fair.

    If ALL of these companies walked away, Apple would find that their iPad would loose one of its best promoted features...the ability to read books and magazines digitally. I don't know if it would hurt Apple in any way considering they were not making money off of the subscriptions before hand, but at least these publishing companies wouldn't have to raise prices purely to stay on Apple's iTunes.

    As it stands, I will never buy a subscription from inside an app...no;t while Apple is strong-arming these companies.

  1. rtamesis

    Joined: Dec 1969

    +9

    Publishing companies with a sense of entitlement

    Nobody's holding a gun to their heads to provide subscription apps to the iPhone/iPad. If they are that concerned about Apple's rules about the iOS platform, why don't they just solely support the Android or Kindle platforms by helping their manufacturers promote their tablets and phones? And if consumers don't like what Apple provides, aren't they free to take their money elsewhere and support other competitors? Isn't that what competition in the marketplace is supposed to provide?

  1. bleee

    Joined: Dec 1969

    +11

    It's a very one sided argument...

    Magazines fail to mention that they get to serve dynamic ads and charge advertisers by page views which they can't on traditional print magazines because there's no way to track. If you pick up last months Time Magazine print edition the ads don't change and the publication doesn't get any more money if I flip through the pages. With the digital edition they do.

    With regards to subscriber information... I'm paying for this magazine and I don't want to tell you anything about me. If you want my personal info you can PAY me for it.

  1. Inkling

    Joined: Dec 1969

    -4

    Confusion in Apple's Executive Suite

    Apple executives seem to be confusing the current situation in publishing with that in the music industry almost a decade ago with the iPod was first released.

    Then, music industry executives were in a panic. CD sales were plummeting, in part due to piracy, and they had no answer for the problem. That's when Apple came along with a cleverly packaged solution--everything needed to bring the music industry into the digital age from trendy advertising and an up-and-running iTunes store to iPods and even the earphones. Apple didn't just own a gateway into a new sales model, they owned an entire music distribution ecosystem. Like it or not, music industry executives had to do as Apple demanded. Except for the Beetles, they had no choice.

    Fast forward to today. Yes, publishing is troubled by declining revenue. But that is where the similarity ends. Industry execs are not clueless about the new technologies like music executives had been. They've had a decade to learn. Some, such as Amazon, B&N, and Sony, already have working systems of their own, systems that are by some measures better than what Apple offers. They don't need Apple to bring them a turnkey, end-to-end solution. They just need Apple to get out of their way and allow their apps to stay on Apple's iDevices.

    In short, Apple is confusing its ability to offer a full-scale, carefully thought out solution to a serious problem in 2001, with its ability in 2011 to set arbitrary and self-serving rules about what can and cannot be installed on their iDevices. The former was real power, the latter is just the illusion of power. It's the difference between having an army behind you and being a two-year-old throwing a tantrum.

    --Michael W. Perry, author of Untangling Tolkien

  1. coffeetime

    Joined: Dec 1969

    0

    Nothing to loose

    Apple has nothing to loose even if the publishers take their business somewhere else. iPad's pure profits are not even coming from the publishers.

    "flexible for consumers....". Come one, who are you kidding? Such a mind twister!

  1. dpicardi

    Joined: Dec 1969

    0

    Lamewing

    Do you know how much publishers pay to distribute their newpapers and magazines across the globe?

    I don't either...but it isn't free.

    Frankly I don't see the big deal. I'd be willing to bet a large percentage of readers...25 to 30% wouldn't buy it if it wasn't in the app store (I know I wouldn't - I can't stand holding newpapers and I don't want to carry around 5 magazines all the time))...so at the very least the publishers aren't losing money.

  1. coffeetime

    Joined: Dec 1969

    +1

    Re: Confusion in Apple's Executive Suite

    "They just need Apple to get out of their way and allow their apps to stay on Apple's iDevices."

    Now that's contradicting! Wouldn't you say? It's like "I want my dictating parents stay out of my way but yet I am living under their roof so I can get free office space to conduct my business". Wow, man. You pay to stay. Black and white.

  1. coffeetime

    Joined: Dec 1969

    0

    Re: Confusion in Apple's Executive Suite

    How about you let me stay in your home and pay you 10% (instead of 30%) of your mortgage and let me conduct my ultra-money-making business in your home. How would you like that? Fair?

  1. aristotles

    Joined: Dec 1969

    0

    How do they feel about the 30% Amazon charges?

    Amazon charges 30% for subscriptions with the Kindle. So I have to ask, how is this any different?

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