Tuesday, March 29, 2011

Why Magazine Apps Have to be Subscriptions

The major consumer magazine publishers are backing themselves into an extraordinary corner with their reluctance to engage in subscription transactions on iTunes. Conde Nast for example will be selling magazine issues as apps, one issue at a time through iTunes, requiring existing subscribers who want to read their magazine on an iPad to repurchase an issue to which they may already have access through a print subscription. That the customer already has a print subscription counts for nothing. In fact, things get worse. To judge from the help pages, in iTunes, customers who have bought one of the latest issues of a magazine through the iPad, may be asked to 'repurchase' a previous issue that they had already bought for their iPad, to go through the motions including keying in their iTunes password, but they will not be charged for it. The problem that Conde Nast have created for themselves here, is that they do not have a way of knowing whether or not someone has previously bought a specific issue of the magazine, because the previous purchase was made through iTunes and Apple, not Conde Nast, keeps track of iTunes customers. Conde Nast are trying both to sell single issues, through iTunes, AND meet the expectations of users who should have access to earlier issues when they buy a new number. Conde Nast are by no means the only consumer magazine publisher getting their knickers in a twist over this. When there really should be no problem at all. All subscribers to a magazine should have access to the magazine for the term of their subscription through all available means.

The first point that we should notice is that Apple themselves takes the view that if a customer already has access to content, they should have access to it on their iPod Touch, iPad or iPhone. This is not controversial it is just good customer relations. Furthermore Apple makes absolutely sure that a customer who has access through their iTunes account to content on one Apple device, has access to that same content on the other devices connected to the same account (exceptions of course if the content cannot run on the other devices). Apple, in other words, takes the view that subscriptions are fungible across Apple devices: up to five devices per iTunes account. Why on earth have consumer magazine publishers not taken a similar view, why not grant that customers who subscribe in print should also have access via their iPad? Magazine publishers should view personal subscriptions as fungible across print, web and digital devices. Magazine publishers must do this if they want to retain any hope of continuing to control their subscriber data. Magazine publishers generally have a very good picture of who their subscribers are, they have databases that carry up to the minute information on subscribers, so granting them access through an iPad app is not a tricky issue. Is it not a kick in the teeth for your existing print subscribers when you tell them that they have to buy another subscription, or another single copy sale, to read their magazine on the iPad? Will it not be another kick in the teeth when customers are told that they have to buy another subscription for their Android phone/tablet? Or their Web O/S device? There will soon be many customers with Android phones who also happen to have iPads. If there is going to be a competitive tablet/mobile out there in a few years time (at the moment Apple looks like the only game in town, but we can hope for competitive variety) it will be incumbent on publishers, or purveyors of content subscriptions, to offer platform-agnostic subscriptions. Apple is unlikely to extend the hand of subscriber friendship to Android, so the publisher has a privileged position in this battle of platforms selling subscriptions that cross hardware boundaries. Look at the success that Amazon has been having with ebooks by straddling hardware solutions with the Kindle.

The second point to note is that Apple have said that it is perfectly OK to provide free access to print subscribers from the iTunes platforms.

“Our philosophy is simple—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,” said Steve Jobs, Apple’s CEO. Apple Press Release 15 February 2011

And of course, newspaper publishers are working in this way (the New York Times, the Wall Street Journal, The Times and the Financial Times all reward their print subscribers with free access to the web or app versions of these papers). As indeed are most of the magazine publishers who deliver branded iPad/iPhone apps with the Exact Editions platform.

It may be said that these major consumer magazine publishers are taking this extraordinarily unfriendly position in relation to their print subscribers (similar policies are being pursued by Hearst, Time and Meredith -- consumers are being expected to buy single issue iPad apps even if they have valid print subscriptions), because they are trying to 'protect' and defend their print subscriptions (those numbers are vital both for the income generated and for the circulation base which attracts advertising revenue). But this is clearly nonsense, print subscription numbers are going to be strengthened and defended if print subscribers are also enfranchised for the iPad and other tablet editions that are no doubt coming. Trying to persuade your loyal subscribers that they should pay for the same content twice over is a losing proposition, and it is certainly adding grievous insult to injury to encourage those who have paid twice over, that they need to go through the motions of a 'repurchase' one more time. Small compensation indeed, that the customer who has already paid twice for an issue will not in re-syncing his previously purchased single issue, be paying three times over. Apple, at least, knows better.

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