Digital Content Distributors Muscle in on Pub Subscription Revenue


fistADOTAS – Woe are the content producers just trying to use subscriptions to get some money back for that painstakingly created content. You know, it takes a lot of effort for Cosmo editors to come up with 15 new ways to please your man; Maxim editors have to reach real far into their inner children for juvenile comments about scantily-clad supermodels.

It’s bad enough consumers don’t want to pay for such golden fluff, but now digital content distributors want a piece of the little subscription action publishers can get. At least it seems like Google is trying to play nice guy to Apple’s hardliner.

Opening the “innovative” digital subscription billing service used for News Corp’.s just launched iPad-only journalism outlet, The Daily, subscriptions for magazines, newspapers, video and music can be bought at Apple’s App Store or within apps. Only thing is, Apple takes a 30% cut of any subscription, the same as with all other in-app purchases such as virtual goods and extended levels for games.

Apple, which isn’t fond of sharing sign-up data with app developers, acquiesced to publisher demands regarding handing over names, email addresses and zip codes (it’s optional for the user to hand these over). But pubs must provide the same in-app subscription price as outside the app and cannot include links within the app to purchase subscriptions on a pub’s website.

As Matthew Ingram explains on GigaOm, “In effect, Apple has put up a roadblock for publishers that makes it difficult to route around the in-app purchase, increasing the likelihood that users will opt for the simplest choice, which is to buy the item through the app itself.”

Apple CEO Steve Jobs retorts, “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.”

On the other hand, The Wall Street Journal says will take a modest 10% of subscription revenue through its One Pass subscription management platform, which will allow site and app publishers set their own prices and terms for their digital content, as well as manage subscriptions and all data included. Publishers can also manage paid content offerings such as subscriptions, metered access and freemium.

Via a Google Checkout payment system, subscribers will be able to access content on all devices — PCs, tablets and smartphones, oh my — through a single sign-on with an email and password.

As Ryan Grim from GigaOm notes, this could be a boon for content distribution: “While many [publishers] have looked at distribution through native mobile apps, having a system like One Pass might convince them to look at creating their own web readers and investing more in web apps.”

And only 10% goes to Google — aren’t the G-boys so much nicer with their racket than those Apple goons?


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