Newsweek released an iPad application this week that allows readers to buy subscriptions using Apple’s in-app purchasing system, seemingly resolving a major frustration that magazine publishers have had with the iPad.
Newsweek’s app gives readers the option to subscribe for three or six months.But it is unclear how attractive this approach will be to other publishers, because it keeps them from gathering information about their readers.
The magazine industry has had high expectations for the iPad since its release this spring, hoping apps that took advantage of the tablet’s multimedia features could offset the waning fortunes of their print products. For its part, Apple has encouraged this idea.
But publishers soon butted heads with Apple over the issue of subscriptions. Subscribers represent a steady revenue stream for publishers. But magazines also see their subscription rolls as a valuable source of information about their readership, which they use to attract advertisers and new readers. They would also like to be able to bundle print and digital subscriptions.
Apple has been unwilling to provide publishers with information about who is buying their apps. The exact reason is unclear, but Apple values control over its App Store. This summer it rejected an app for Sports Illustrated developed by Time Inc. that included a subscription system where readers would pay Time directly, according to AllThingsD. A Time spokesman said the company was still talking to Apple about how best to handle subscriptions.
Apple has been reportedly working on a plan to cooperate with magazines on subscriptions, but its timetable is unclear. High-profile magazines like Esquire and The New Yorker have recently released apps that require readers to purchase each issue individually.
Newsweek’s app is free to download, and readers then buy the actual content within the app. A single issue costs $2.99, while a three-month subscription costs $9.99 and a six-month subscription is $14.99. Apple receives a 30 percent share of the revenue from these sales. Readers will be able to access issues of the magazine two days before they appear on newsstands.
The technology to offer the subscriptions was developed by Urban Airship, an Oregon-based company that is working with several other publishers on similar subscription-based apps. The publishers acknowledge that they remain frustrated with the revenue-sharing deal with Apple and with their inability to gather information on their readers. But they said they wanted to move forward with the options available to them.
“I’m not going to say that we love giving a hefty fee to Apple, but they have the customer base,” said Scott Havens, vice president of digital strategy at The Atlantic, which is also developing an app with Urban Airship.
Apple did not respond to a request for comment.
Ned May, an analyst for Outsell, a research firm focused on publishing and technology, said that magazines had also started to look at other options for developing content for tablet computers, partially due to continued frustration around the subscription issue. The cost of developing for multiple platforms is also becoming a concern, he said.
The rise of viable alternatives as Apple’s competitors prepare their own tablets will put pressure on Apple to address publishers’ concerns, said Mr. May, in much the same way that the introduction of the iPad pressured Amazon to respond to complaints from book publishers about the pricing of books for the Kindle.
Hila Dar, the director of product development at Newsweek Digital, said she believed that the conflict between Apple and magazine publishers would be resolved in the near future.
“It will get sorted out one way or another, because we need each other,” she said.