Home > In The News, Industry Talk, iPad > NewspaperDirect Offers a Strategy to Publishers Wrestling with Apple Tax

NewspaperDirect Offers a Strategy to Publishers Wrestling with Apple Tax

Only a year ago, Apple’s iPad was touted as a publisher’s dream: a portable device that delivered an intimate and immersive reading experience.  Today, Apple formally announced a 30 percent tax on all content sales via iTunes, requiring all publishers to provide in-app subscription plans that are the same (or better) than their subscription plans outside of the app.  On those subscription plans, Apple will take 30% off the top!

Right up front, let me assure everyone that NewspaperDirect is totally against this money grab from Apple and believes that publishers and subscribers should take the same position.  Here’s why:

1.  It is unjustifiable for a hardware device manufacturer to charge 30% on a transaction that costs them less than 5 percent to perform.

2.  It is inexcusable to force publishers to comply with a manufacturer’s tiered subscription levels under that manufacturer’s terms and conditions, not just on its own iOS devices, but on whatever platform the publisher supports under their subscription plan (e.g. Android or BlackBerry or even PCs).

3.  Apple’s personal data policy is completely self-serving, helping neither publishers nor their subscribers.

Offering opt-in choices for subscribers to share their personal data with publishers is fine for single copy sales, but when a user specifically subscribes to a publisher’s content, the publisher should have access to the personal data of “their” subscribers.  These are not Apple subscribers; these are the publisher’s subscribers.

In a world where personalization is becoming more and more important, publishers must be able to tailor content to the preferences of their subscribers. Under Apple’s policy, this will not be possible.

And what is even worse is that publishers will not be able to count these subscribers in their audited circulation.  Ridiculous!

“I’m very dismayed that Apple would make such an unpopular move at this time, given the abundance of high-quality alternate devices entering the market,” said Nikolay Malyarov, NewspaperDirect’s VP of publishing and legal affairs. “We’ve already seen how Android-based phones negatively impacted the iPhone market share; I expect nothing less from the open, full-featured Honeycomb-based tablets, BlackBerry and Win 7 devices coming soon.  People want a wide variety of choice when it comes to devices, and this move will likely compel content owners and publishers to rethink their tablet strategy.”

Publishers must act now to avoid lock-out from their subscribers

NewspaperDirect recommends that publishers immediately implement a viable cross-platform strategy and factor Apple’s 30 percent cut into content sold via the App Store:

1.  Cease all free promotions of the iPad in newspapers and on publishers’ websites. Instead, accord more attention to non-iOS devices in their publications. If Apple is choosing to exert control over their channels, publishers should focus on channels that are not subject to the whims of greedy hardware vendors.

2.  Develop free news apps for the Apple iOS, and use them to drive traffic to publishers’ websites where more reasonable options are available to subscribers on other platforms.

3.  Pursue a multi-platform approach that uses cross-platform technologies and create two subscription models on your website:

Subscription plan 1:  Offer content across all supported platforms except iOS devices at your normal subscription rate.

Subscription plan 2: Offer content across all supported platforms including iOS devices for 30% more than Subscription plan 1.

Marketing will be key in communicating to subscribers the added value they will receive through a subscription with publishers rather than through Apple — value such as subscription portability across devices and platforms, digital value packages, loyalty programs, etc.

Publishers who already have iOS apps in the App Store or have apps in development, will  need to update their subscription plans/tiers to comply with Apple’s new policies.  NewspaperDirect will take care of all the UI development to ensure your apps are fully compliant.

“Apple’s subscription model and user data policy for publishers is very short-sighted,” said Alex Kroogman, CEO of NewspaperDirect.  “With powerful, new web apps gaining popularity, and technologies like HTML5 which provide native-like functionality on tablets, publishers can now give their subscribers an excellent news app, directly in the web browser, and completely bypass Apple’s App Store.”

Apple has gone too far.  It’s time for publishers and subscribers around the world to stand up and fight this extortion.  Do your part – speak out now!


Categories: In The News, Industry Talk, iPad Tags: , ,
  1. Johan Duvenhage
    February 16, 2011 at 2:01 am

    How does/willthis affect current subscribers using PressReader on iOS?

    • February 16, 2011 at 5:19 pm

      Hi Johan

      Thanks for your question.

      Apple says that existing subscribers will not be affected by the 30% tax. And new subscribers that come from PressDisplay.com should not be affected as well. Apparently this 30% only affects new subscribers that Apple brings to the table. We are monitoring this carefully to ensure that our installed base and new customers from our side are protected.


      • Laurence
        February 18, 2011 at 1:18 am

        The way I read this, you must offer in-app prices that equal your website prices if you want to participate in Apple’s playground. So, Apple insists that you raise website prices for an iPad-enabled subscription by 30% (and keep that money) unless you want to risk losing your profits on an in-app subscription to the Apple tax. It’s quite the money grab, especially considering the utter lack of publicity that Apple has given PressDisplay’s terrific service in the App Store.

        What I want to know is, if the PressDisplay app did get kicked out of the App Store, would existing customers still be able to use the app we already have on our iPads? And if you do develop an HTML5 solution, will it include offline reading capabilities? Very important in the subway. 🙂

      • February 18, 2011 at 9:30 pm

        Hi Mark

        You can offer different plans on your website, as long as 1 of them is the same as what is offered on iTunes.

        We’ll have a web app to ensure our iPad users can continue to enjoy the service regardless of what Apple does. HTML 5 does allow for offline reading, which is why it is a good workaround for us.


  2. Mike
    February 16, 2011 at 3:21 pm

    Apple’s plans are disproportionate and deeply unfair, but don’t penalise iPad users by upping your iOS prices!

    • February 16, 2011 at 5:07 pm

      Hi Mike
      I appreciate your comment. Thanks. Certainly this is not an option we want to choose in the long run. That is why we will be coming out with an HTML 5 web app that will allow iPad users to enjoy PressReader without paying the extra price of having it as a standalone app.


  3. Carlos E Anzola
    February 16, 2011 at 6:39 pm

    I’m a very happy pressdisplay reader and think your company has made a great contribution to the press. But find your approach above very aggressive.
    I also think Apple has made and is making a great contribution en general, prices alternatives, business models are up for discussions. Sometimes I pay more and get better service etc. Let people decide.

    • February 16, 2011 at 6:47 pm

      Thanks so much Carlos. I always love hearing from readers like you who care.

      Totally agree that we need to let people decide. We at NewspaperDirect decided we need to oppose this tax and take an assertive stance on the matter. What people decide to do with our recommendations is their choice. Some will agree and others not. That’s perfectly okay with me. One size does not fit all.


  4. February 16, 2011 at 9:11 pm

    You know I’m an odd combination…. I have used Pressdisplay for several years so I am an early adaptor. I also own an iPad. I also own Apple stock which has quadrupled in value. Oh, and I also own 3 gay newspapers in the Midwest and South. I am shall we say, in ALL of the groups in this equation. I will be damned mad if I have to pay Steve Jobs 30% more for the ability I now have to read all my British and other newspapers on BOTH My computer and iPad…and I won’t be happy with PressDisplay if you charge me 30% more as a long-time user to pay Mr Jobs, either. I strongly suggest that Mr. Jobs and the publishers sit down and get this resolved because I agree, Gayle that his power grab here would be like the phone company deciding who I could talk to on the phone I bought. Or the car folks saying where I could drive “their” vehicle I paid for. But the problem here is that all sides NEED the others. As a user, consumer, supplier and stockholder (and I own a bit of at&t too!) it doesn’t make me happy that Apple is power-grabbing, but it also would not make me happy if I lost my current ability to read on the iPad. I am just not ready to go back to writing 5-7 days for the British newspapers to get to me, so in short you, Apple and the publishers need to work it out. If all parties fail, they all lose—including those of us who sit on all sides of the equation!

    • February 16, 2011 at 9:30 pm

      Hi Ted
      You nailed it. I would love to pull publishers and Apple into a room and have them work out something that works for “the people”. Have you ever tried to talk to anyone at Apple? We have had a lot of experience trying to talk to Apple – it’s extremely difficult to get their attention. They don’t return calls. If your app is denied, the appeal process is horrendous. It’s like the wizard of Oz – lots of mystery behind the “wall” they’ve built up around themselves. I wish we could break it down and get a dialogue going. Transparency is not their strong suit.

      There is a round table happening soon in the UK with publishers and “interested bodies” to discuss this issue and try and figure out a way to make things work.

      Meanwhile, as a PressReader user, you are safe – having already authorized your account through PressDisplay, Apple won’t tax you (at least I think that’s what they said).


  5. February 16, 2011 at 9:17 pm

    Happy to see our colleagues at INMA publish this statement today.

    INMA optimistic about Google service, skeptical of Apple app policy


    • February 16, 2011 at 9:43 pm

      Thanks Gayle….NOW lets make the same advantage for all possible. If I lose my British papers I will have to reconsider using you all as 90% of what I read IS from the UK….Funny you asked if I have dealt with Apple…indirectly as my paper offers an online e-edition and the firm it goes thru (interested in a gay paper? contact me!) so far has been unable to get THEIR app approved, so right now I, too, am at a disadvantage as Apple has been declining their app for over 9 months I am told. Biggest issue I have with ALL of the apps and the fees and the he-said she-saids is that every one of them discourages reading, listening and using the great technology we now have. I am 60 years old and am thrilled I can listen to BBC Live while reading The Guardian all on my iPad… too bad rights restrictions mean the cost keeps going up and those “blackouts” due to radio rights keep interfering. Technology would be a great thing if we could all pay fairly, and once, and split the cash and move on. Sadly, it seems we let greed get in the way all too often—whether it be by the news-gathering agencies, sports teams or music rights-grab folks. In the end, the consumer suffers and then we all wonder why the goose no longer lays any golden eggs!

      By the way, I wish your firm would let we subscribers know when it happens and who to write when a paper we have on auto-subscribe drops out of your program. We just suddenly see this or that title vanish with no clue as to why or who to write. I suspect bosses at too many publications do not realise the importance of having your company out here providing us a PAID service — and I mean papers like Scotland on Sunday and The Journal from Newcastle, UK…both now ex-available on PressDisplay.com and sorely missed!

      • February 16, 2011 at 9:56 pm

        Hey Ted. We’ll do everything we can to keep your UK papers on PressReader 🙂

        9 months??? Unbelievable. Bypass the app store and build it as a web-app. Then you stay in control.

        As for the publications that some times leave PressReader. I hear you on that. Often we can get them back, but it can take time and that’s frustrating for readers. I think more transparency in this is a good idea. Let me pass that along to the powers that be and see what can be done.


  6. February 17, 2011 at 4:07 am

    It doesn’t cost anything to host and serve your content?

    • February 17, 2011 at 5:58 pm

      Thank you so much “Mr. Jobs” for putting a smile on my face this AM. 🙂

      But you of all people should know that Apple doesn’t host our content or serve it. Apple may do so with music and video, but not our newspapers.

      But thanks again for making my day 😉


  1. February 16, 2011 at 1:53 pm
  2. March 4, 2011 at 1:11 am

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