For those interested in selling premium electronic content, the week of Valentine’s Day this year was filled with hearts, flowers and, potentially, some candy boxes with pieces already missing. Recent back-to-back announcements by Apple and Google unveiled plans to support premium subscription sales, leaving many publishers surprised, puzzled and a little stressed out as to how to react to these offerings. Should they give these new plans a fat, wet kiss, blow kisses from afar, or send them back with a note saying “address unknown?” By week’s end, many publishers were still searching for the right reactions.
The problem that content publishers face with these plans is that they are in some ways quite radically different, both in their structure and their implications. The opportunities and stark choices that publishers face now are underscored most by Apple’s announcement of their subscription plan. Used so far only by Rupert Murdoch’s The Daily news app for Apple’s iPad and announced with no apparent preview to major media companies, the new Apple subscription plan seems to have been received by most publishers with a hushed surprise.
At its core the Apple plan is fairly simple, but not necessarily easy for media companies to stomach. Apple will take a 30 percent cut of all subscription revenues generated by sales through their iTunes app store, though publishers selling subscriptions through their own e-commerce services may sell apps and take 100 percent of the subscription revenues. However, if they do sell their subscriptions for apps outside of Apple’s e-commerce facilities, publishers must use their own technology to validate the subscription on Apple platforms. Moreover, from within a subscription-supported Apple app a publisher may not link to other content or offers outside of the app, and the pricing for the Apple subscription must be no more than any other subscription offer outside of the Apple e-commerce stores.
The economics of the Apple plan are restrictive enough in many ways, but even should publishers opt in to all of these requirements, there’s no guarantee that they’ll know who their subscribers are. Apple will release information about apps users obtaining content via a subscription only if they opt in to share it with them. For magazine publishers used to being able to share demographics with advertisers and marketers as one of the core of their marketing efforts, that tends to put a rather large chink in their typical expectations for media sales.
By contrast, Google’s new One Pass content e-commerce service is a subscription management tool for digital content that can be applied to any content format on any platform, including content in applications designed for devices using Google’s Android mobile operating system. As long as an app store’s terms and conditions allow the use of outside ecommerce services, One Pass can be integrated. Existing subscribers who have paid in to content can sign in to One Pass-managed content using a coupon code. Like Apple’s service the Google One Pass system can support typical traditional lengths from weekly up to annual subscriptions, but can also support day passes or other limited-period access, initial free access that converts to a premium access offer, selling bundles of issues, or unlimited access to individual articles.
The freight that Google charges for using One Pass is definitely easier on publisher pockets: Google takes ten percent of a One Pass sale and makes no restrictions on how publishers choose to host, price, sell or distribute content. Publishers can also get access to the user data that a content purchaser provides via One Pass, no questions asked. Payments are via Google Checkout, which is already integrated into Google’s Android Market and the Chrome Web Store.
Clearly Google’s One Pass is a cross-platform solution designed to enable publishers wrestling with rapidly changing access and use patterns for media to find ways to service their audiences more simply and flexibly. Instead of asking a subscriber to buy content on the Web separately from mobile devices and other platforms, One Pass enables a subscriber to buy once and then not be concerned about access methods. It’s a promising approach for publishers trying to approach advertisers trying to track audiences across all of these platforms.
Certainly Apple’s subscription plan is a welcome addition to iTunes-based ecommerce, but like many aspects of Apple’s premium content strategy, it seems to shut out the Web and other platforms as viable vehicles that publishers may use to deliver content and services. It’s as if to say that these other platforms only complicate what Apple feels that it does very well on their own platforms that offer cross-platform integration from one Apple model to another.
While some media companies are still quite wary of working with Google, the rapid growth of devices using its Android operating system has encouraged many media companies to size up Google anew as they try to get their hands around them in a way that will enhance and not isolate their Web strategies. Popular Science, one of the early adopters of Apple apps, has signed up for both the Apple plan and Google’s One Pass. Time Inc.’s Sports Illustrated will be made available to its subscribers on Samsung’s Galaxy Tab mobile touch-screen tablet, Android mobile phones and the Web for one subscription price via an All Access subscription plan. While it’s not been made clear whether SI intends to use Google One Pass, the model that they are pursuing is ideal for its use.
No doubt many publishers will embrace both platforms with some enthusiasm over time, although threats of potential anti-trust action may slow down some adoption of the Apple scheme. The lure of Apple’s popular devices looms strong, yet it’s important to note that Rupert Murdoch’s The Daily, the first subscription offering on Apple’s iPad device, is an all-new publication by Murdoch with no real Web presence other than landing pages for linked shared from The Daily via Twitter or Facebook. In other words, Murdoch didn’t risk any of his existing brands on the iPad, experimenting with a standalone brand which, should it fail, would leave him flexibility to pursue other avenues for digital subscriptions supporting his existing content services. By contrast, SI is an “all in” approach to cross-platform content ecommerce.
The flexibility of Google’s One Pass and more reasonable and simple terms are no doubt an attractive option, though it will take a few prominent success stories for publishers to be convinced that Google is a truly trustworthy partner for content e-commerce. The solid track record of Apple’s iTunes sales has argued strongly for its premium share of revenues up until now, but with the Android Market gaining competence and an ocean of new Android devices equipped to take advantage of both apps and full-Web content access, the flexibility of One Pass may be what publishers really need, even if they’re not ready to admit it to Google just yet. Certainly Apple’s ham-fisted, “Take it or leave it” attitude towards its subscription launch plays into publishers considering the Google alternative more seriously.
It’s not clear who’s going to win the hearts and minds of publishers in this battle for premium content supremacy, but either way hopefully they can enjoy the sweet taste of more premium digital revenues in the process. It’s that sweet taste that will really determine whether Apple or Google winds up being the sweetheart that publishers yearn for in years ahead, after all.