Time Leads the Way

According to the Wall Street Journal, Time Inc and Apple have reached agreement on the provision of free magazine content to print subscribers.

Starting Monday, subscribers to Sports Illustrated, Time and Fortune magazines will be able to access the iPad editions via the apps, which will be able to authenticate them as subscribers. Time Inc.'s People magazine already had such an arrangement, but readers of most publications have had to pay separately for the iPad version regardless of their subscriber status. Time Inc in iPad Deal with Apple

This is a very sensible move, but it is not clear that Apple has had to give any ground. From the get-go Apple has made it clear that it was fine for publishers to sell digital subscriptions which include app deployment, and perfectly all right for them to supply free or 'complementary' app facilities to print subscribers. We have been pointing at this open door here and here and here.

At this point Time's 'free' app access is limited to print subscribers in the US, and Time Inc are not currently offering 'subscriptions' to customers who buy through iTunes. This has perhaps been the one point where Apple has granted Time Inc some leeway. Buying the Time magazine app issues one-by-one is a lot more expensive than buying an annual subscription from the publisher, since there have always been masses of 'bargain' offers for Time print subscriptions out in the market, all of which now include app-rights (for US subscribers), Time Inc is not strictly playing by Apple's rules. Not by a long chalk, since Philip Elmer-DeWitt, at Fortune, can buy a Time sub for 28c an issue, as opposed to the $4.99 per issue available through iTunes. My guess is that Apple's concession was to 'allow' Time a period of grace to get its subscription offering for iTunes customers in place in time for the June 30th deadline that Apple has imposed. Apple might just conceivably have offered Time a month or two additional grace period. But I will be very surprised if Time Inc has not totally fallen in with the Apple way of doing things by the beginning of September. Apple is not kidding around on its rules or its 30% commission. On its iTunes page Time says that 'subscriptions will be available later', though at the moment the app only enables single issue purchase.

Where Time leads, Hearst, Conde Nast, Meredith and the other big players will follow. Competitive pressures will ensure this. Print subscription revenues in the next few years are of major relevance to publishers who see their advertising revenues wilting. The other major consumer publishers will soon understand the tremendous incentive that Time, Fortune and Sports Illustrated are giving to their print subscribers by offering complementary digital access on the iPad (these rival publishers will ruefully compare the brick-bats they are getting on their iTunes customer evaluations with the delight shown by Time's subscribers). At this stage the Time Inc circulation director will wonder whether he really needs to give Mr Elmer-DeWitt an Ultronic Multi-Functional Global Clock Radio when he is also throwing in complementary iPad access with the print bundle? At this stage the potential revenues from digital subscriptions begins to seem interesting and the cost of cheap clocks looks excessive. The second penny will drop when the consumer publishers realize that in offering complementary access to iPad users, they will inevitably have to offer a similar deal to Android users....... and finally, recognition will dawn that these are our customers before they were Apple's; not Android's, heaven help us not Amazon's, and accordingly we have to treat them well on price and access. We have to own them by serving them and recognising them and so long as these customers continue to want our print magazines we actually have an unexpected strength in the market. Time is leading the charge....