Apple offers subscription services
Apple Inc. said Tuesday that it is starting a subscription service for publishers of newspapers, magazines and other content applications, allowing them to sell iPhone and iPad users up to a year's worth of issues through a single purchase.
The subscriptions would be available in Apple's online App Store, and Apple would take a 30 percent cut of the revenue.
The subscription service differs from the previous practice of "newsstand sales" under which each issue of a magazine, for instance, is bought separately. Apple also takes a cut of sales fees in those cases.
Experts said the new arrangement could cut into publishers' profits but also help bring them new digital subscribers. California-based media analyst Ken Doctor said in an online posting Tuesday that there was little surprise in the Apple announcement, which, he said, echoed what it has said privately to news and magazine companies: "Your old business is still your business, but the new business - when we help you get it - is our business, too," he wrote.
Newspaper and magazine companies are betting that the simplicity of Apple's system will help boost flagging sales, offsetting any losses they may suffer by sharing revenue.
The decision to broadly introduce a subscription service comes just weeks after Apple teamed up with News Corp. to launch The Daily, which was the first subscription product available through Apple's iTunes store.
Apple's announcement Tuesday said publishers will set the price and length of subscription - weekly, monthly, bimonthly, quarterly, biyearly or yearly. Customers will pick the length of subscription and automatically be charged.
Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription.
"Our philosophy is simple," Steve Jobs, Apple's chief executive, said in a statement. "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."
Publishers who participate will have to offer their lowest subscription rates within Apple's store. "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," Jobs said. Apple will give publishers until June 30 to comply with the new rules.
Paul Fleishman, Newsday's vice president of public affairs, said, "Newsday's iPad and iPhone apps are available at no charge."