In a parallel to the classic “man bites dog” twist on what makes newsworthy headlines, separate reports suggest Apple is working with content publishers to shift the development of no-cost web apps – a free view of news and information – towards a subscription-only model through its iTunes e-commerce platform. The updated iTunes subscription model is evidently not ready for primetime, resulting in delayed news service launches and publisher frustration.
The Wall Street Journal’s All Things Digital blog reported that Apple and News Corp have jointly agreed to delay the launch of an iPad-exclusive news service. Dutch publisher NRC Media wrote that Apple has given it and other content owners until the end of March to register its newspaper applications under a new set of requirements or face removal from the iTunes App Store.
The shift in Apple strategy is intended to transition free content app users to a subscription model that entitles Apple to a rumored 30% of fees received by publishers. Under the current free application model, Apple only generates revenue from those implementing the company’s iAd service.
Clearly, the change benefits Apple. Will publishers, content owners, and consumers go along quietly? ABI Research believes that the largest publishers are supportive of the Apple initiative; however, smaller publishers, independent publishers and end-users could struggle with the change. Some will go along with the business model change, while others will migrate to greater use of the web browser to overcome the restriction.
