Financial Times owner Pearson threatens to go ‘somewhere else’ over Apple’s iPad app subscription rules

“Financial Times owner Pearson has put itself on a collision course with Apple over the onerous terms it is demanding for print app subscriptions, with chief executive Marjorie Scardino arguing that as competition increases publishers will no longer have to cave-in,” Mark Sweney reports for The Guardian.

“Earlier this month Apple announced a new subscription service for magazines, newspapers and music bought through its app store, but offered tough terms including keeping 30% of subscription revenues and retaining control of customer information,” Sweney reports.

MacDailyNews Note: Actually, there’s a bit more to the story:

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. 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, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers. – Apple CEO Steve Jobs, February 15, 2011

Furthermore, publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Protecting customer privacy is a key feature of all App Store transactions. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe. The use of such information will be governed by the publisher’s privacy policy rather than Apple’s. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher’s privacy policy rather than Apple’s.

Sweney continues, “‘It is unclear how their proposal is going to work, we are still talking to them,'” said Scardino. ‘The important thing to remember is there are many, many tablets coming out and multiple devices … [from] Kindle to mobiles. If indeed Apple are not happy to give us customer data then maybe we will get it somewhere else.'”

Read more in the full article here.

MacDailyNews Take: Margie’s in for quite the rude awakening.

52 Comments

  1. “If indeed Apple are not happy to give us customer data then maybe we will get it somewhere else.”

    Mean old MAC is up to their dirty tricks and shakedown tactics once again. I pity the subscription service providers who try to kindly negotiate with the control freaks in Cupertino. Who does MAC think they are getting between the publishers and MAC’s customers? One thing is for sure, Microsoft would never get in the way of the publishers. If it’s customer data publishers want, fine. Redmond is open for business! It’s such a little thing to be worried about anyway; customers shouldn’t mind.

    The question MAC fangirls should be asking is how much is enough? When are you lemmings going to get tired of MAC’s shenanigans?

  2. The truth comes out. Publishers really don’t care about the 30% they have to give Apple for new subscribers. What they’re really upset about is no longer having free access to private customer information that they can sell to advertisers and spammers – customer’s have to opt-in to sharing their info. Apple is in the right in this case and these publishers are scared.

  3. In economics we call this “monopolistic competition”, not that apple has anything like a monopoly on phones, but that they have a monopoly on the iphone (and other ios devices), this can be frustrating to some people who mostly like the iphone, but don’t like some piece of it (30% goes to apple for most things, no gpl software, no scripting etc). it seems to me, that these people (sometimes including myself) who are, of course, powerless to change anything, just make a bunch of racket about it and hope apple will change it for them….

    It also seems like apple usually (though not always) gets it right the first time.
    just my two cents

  4. Worlds collide when greed, dogma, and ignorance dominate over sound judgement. I doubt that Apple’s financial performance and iPad sales will be subjective to Pearson’s Fsck Times.

  5. Scardino: ‘The important thing to remember is there are many, many tablets coming out and multiple devices … [from] Kindle to mobiles. If indeed Apple are not happy to give us customer data then maybe we will get it somewhere else.’

    And maybe pigs will fly. Go somewhere else, Scardino. Your attitude fits perfectly with the crapware, revenue, and privacy models offered by other vendors like Google.

    1. Pigs might fly because Pearson is doing the impossible. Pearson is making money hand over fist when all three of their major business units, book publishing, newspapers and education are in industries where everyone else is losing tons and going bankrupt.

      Pearson’s massive Profit growth in idustries that are bleeding money indicates they know what they are talking about and Apple may want to listen to their content providrs for once.

  6. @Stephen – that nonsensical rant was just that NONSENSE. iPhone is a PHONE, Apple does not have a monopoly on phones. You do not get to say it is a monopoly because no one else makes an iPhone. It’s like saying Ford has a monopoly on the focus because Chevy doesn’t make one.

    You clearly need to read up on what a monopoly is and isn’t.

  7. Pearson is a lumbering giant. They practically own the education market for text books and SIS. They are the big player in the pool. (remember powerschool? they bought it, macschool, same thing) they are slow, expensive, and full of their own koolaid. They are also very windows centric in most of their software platforms. I hope this doesn’t affect them bringing txts to iPad.

    Also of note is the reporter dissing the Apple terms and siding with Pearson in the article, yet they gloss right over the real heart of the dispute: Apples unwillingness to sell my data and privacy down the river. I grow weary of these attempts to paint Apple as greedy when that isn’t the real issue at all.

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