Financial Times hopes against hope they can skirt Apple’s iPad app subscription rule

“The Financial Times wants to keep selling subscriptions for its digital news directly to readers rather than surrender control of new customers who sign up via Apple’s iPad, the managing director of FT.com said,” Georgina Prodhan reports for Reuters.

“Apple’s hit tablet computer, the iPad, has become a major driver of new subscriptions to FT.com, thanks to its large and crisp display, possibilities for interactive features and affluent customer base,” Prodhan reports. “But the FT values direct relations with its customers which allow it to tailor advertising and products to its audience, and is resisting Apple’s efforts to channel them through the App Store.”

“‘We don’t want to lose our direct relationship with our subscribers. It’s at the core of our business model,’ Rob Grimshaw told Reuters in an interview on Monday,” Prodhan reports. “He said he was hopeful of a positive outcome to negotiations with Apple, but added: ‘If it turns out that one or another channel doesn’t mix with the way we want to do business, there’s a large number of other channels available to us.'”

MacDailyNews Take: Grimshaw ought to be careful about making veiled threats when he doesn’t a leg to stand on. Apple requires publishers to first ask for permission from customers who choose to subscribe to publications from within iOS apps (customers can also opt instead to subscribe directly via the publishers’ sites) to access the customers’ personal information. Subscribing via FT’s website requires customers to give name, address, telephone number, email address, credit card number, credit card security code, along with job title, job responsibility, and industry. Make no mistake, forcing that information out of subscribers upfront is what is at the core of The Financial Times’ flawed business model.

Prodhan continues, “He added: ‘We have a great relationship with Apple.'”

MacDailyNews Take: That’s right, you’d better be very careful. The Financial Times needs Apple’s iPad far more than Apple’s iPad needs The Financial Times. Grimshaw is nuts if he really believes he’s “negotiating” with Apple, especially from a such a weak position.

Prodhan continues, “Grimshaw said FT.com had far more to lose by giving up its customer relationships to Apple than many other publishers, who had not yet developed a successful online business model. ‘We have something to lose,’ he said. ‘The publishing market as a whole is in a different situation.'”

MacDailyNews Take: Again, what does FT.com have to lose, exactly? Names, addresses, telephone numbers, email addresses, credit card numbers, credit card security codes, along with job titles, job responsibilities, and industries; all forced out of customers at the time of subscription. That is precisely what The Financial Times does not want to lose. Apple’s App Store lets customers keep their information in one safe place, with Apple, not spread among X number of publishers, at the whim of their “security” or lack thereof.

Read more in the full article here.

MacDailyNews Take: With App Store subscriptions, Apple’s on the side of the consumer yet again. Anytime you read differently, it’s highly likely that it’s from a publication that wants to continue to be able to force your name, address, telephone number, email address, credit card number, credit card security code, job title, job responsibility, and industry from you at the time of subscription.

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

Related articles:
Financial Times owner Pearson threatens to go ‘somewhere else’ over Apple’s iPad app subscription rules – March 1, 2011
The Independent foments ‘discontent’ over Apple, but presents precious little evidence – February 22, 2011
App Store subscriptions: Apple’s on the side of the consumer yet again – February 17, 2011
Apple debuts subscription service on the App Store; Steve Jobs: ‘Brand new opportunity’ for content publishers – February 15, 2011

50 Comments

  1. I have to point out something very important to remember.

    While Financial Times can afford it… smaller magazine publishers wishing to go digital cannot afford the 30% take on Apple’s end.

    There’s more to it than this but this is the main concern about allowing Apple to take the sale rather than Apple allowing the sale outside of it’s payment system.

    1. Sorry but you’re wrong, most publications make the bulk of their money from ad space sales and selling customer data to ad agencies. The subscription fees are usually a small part of it. Physical media publishers (even the small ones) already pay a lot to brick and mortar places (usually much higher then 30%) to sell their products in these brick and mortar stores. Not to mention the cost of shipping and manufacture of physical media; paper doesn’t print it’s self after all.

  2. Guys – before you start to spam with inaccurate comments at least try to get your facts straight! According to the information that has been published so far:

    If you are a Financial Times subscriber then this makes absolutely no difference to you – You can carry on exactly as before – You should even be able to download iPad software and read the FT on it without any extra subscription (assuming the FT offers this option).

    If you want to become an FT subscriber via the iPad you will have two options. Subscribe through iTunes OR subscribe through the FT website (again assuming the FT offers this option).

    Apple are not trying to claim 30% of the online revenue from the FT – Just 30% from the new customers they gain by publishing on the iPad – If existing customers and/or new customers sign up via the FT website Apple get nothing. Oh and that 30% is not just for handling payment – Apple also handle worldwide distribution of the application etc. same as they do for all other applications distributed through the App Store.

  3. LOL@”direct relationship with our subscribers” as if there was some level of reciprocity. Magazines take data and sell it to information clearinghouses. They proceed to spam you with more solicitations – some germaine to your interests, others in no way related to your interests. To see people in comments defending this practice is pretty hilarious. If I want to give my personal information to FT, I’ll make it a point to opt-in when I subscribe.

    Google is more than willing to hand over all the customer’s information to publishers and do it for less of a cut than Apple’s asking. That offer – which was made to publishers in the midst of the 30% in-app purchase brouhaha – should tell you all you need to know about the difference between Apple and Google.

  4. Here’s an interesting post about the cost of newspaper manufacture and distribution:
    http://www.quora.com/How-much-of-a-major-newspapers-subscription-cost-goes-to-printing-and-delivery

    According to them, the price of the paper matches the cost to produce it. Advertising provides the profit.

    If that is the case then providing 30% of the revenue from subscriptions should be a good deal.
    However the interesting point from the post was that advertising revenue is less for online media than paper. Whilst they gain from reduce distribution costs this may not make up for the loss of advert revenue.

  5. Everytime I sign a subscription card and put an extra character in there. The minute I get junk mail with that extra character I know my source. But guess what? I wrote in RED on the card, “Disemination of this information is strictly Prohibited!” Did they grant me that wish? HELL NO! That’s for EVERY MAGAZINE! Bastages!

  6. Some information on the subscriber is needed for the content provider to better sell advertisement.
    Granted not all information is needed but some of the basics I can see like:
    Location:
    – not exact GPS coordinates, but zipcode
    Age:
    – doesn’t need to be exact but age groups should suffice.
    Gender
    Profession and Title
    – general industry and maybe something similar to age groups but pertaining to role / responsibility. There is a difference between general laborer and say top level executive.

    This allows the content provider to select more appropriate advertisement as well as know who to contact to offer space for advertisement.
    An example, MDN itself. Displaying WIndows 7 advertisement that effective on an Apple / Mac News website? Yet the Invisible Shield ads promoting protection for Apple products are.

    You think MDN doesn’t sell the statistics for their site to advertisers? Guess you don’t notice the google ads everywhere.
    Granted I doubt MDN sells our email addresses when we either register or post a comment, but the email address is a required field when doing either of those two.

    Maybe Advertisers or Publishers want more then they should have, in regards to our information, maybe Apple should allow for Profiles and/or the option to allow the Publishers / Content Providers / Advertisers, to ask the user wether or not they want to provide access to that profile, instead of prompting the user to fill in all the blanks.
    They can even have it set up with options (check boxes on the profile) to automatically deny, allow or prompt for permission based on what/who it is.

  7. Yeah, how awful to have access to the over 200 million people who have accounts with iTunes or the 150million iOS devices..
    those numbers must be a fraction of FT’s massive subscriber base… Where are they going Fandroid? That’s a spendy bunch.

  8. So if Apple is so concerned about my privacy, why are they forcing me now to use my real name that is linked to my iTunes account in Gamecenter?

    Is games 4 peetssake! F6@$&&

  9. So let me get this straight – FT (and others) want a free ride on the back of Apple? Tell me where that makes sense. Also, freedom of choice: nobody is forcing you to buy an Apple product, nor are they forcing you to subscribe to anything on it!

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