3 strategies emerge for charging for iPad publications

Apple has been talking to publishers about launching enhanced subscription tools for the iPad, but simply allowing subscriptions is not enough. The iPad needs a digital newsstand for newspaper and magazine sales and subscriptions.

Right now there are a number of obstacles separating the needs of publishers and the expectations of consumers regarding iPad-based publications. Apple is right in the middle of the problem and the solution.

To start, until recently it was not possible to purchase a subscription to a magazine, such as Newsweek, through iTunes. Even now, consumers can’t automatically renew subscriptions; they must manually re-purchase at the end of each term.

For publishers, allowing Apple to process their iPad subscriptions means giving up 30 percent of the revenue and losing access to customer data for those readers. That makes it difficult for publications to provide free access or discounts to their current print subscribers.

And with publishers experimenting with subscription approaches, consumers face a confusing array of options. Some publications are paid downloads, some are not. Some offer subscriptions, some don’t. Some sell individual issues through Apple’s iTunes store, and others circumvent iTunes partially or entirely.

And, for many of these apps, it is nearly impossible to decipher what you’ll pay for — and how — until you download and install the app.

In the last six months — accelerating recently — I’ve seen the emergence of three general subscription options for the iPad:

  • App downloads via iTunes, with single copy sales handled by iTunes and subscriptions handled by the publisher. People was one of the first to offer such hybrid print/tablet access. Each issue costs $3.99 in iTunes, but People enables print subscribers to log in to the app for free access.
  • App downloads via ITunes, with subscriptions and single-issue sales handled by the publisher. The Oklahoman has taken this approach, which means Apple does not get a percentage of sales.

And within those general categories there are more, sometimes slight, variations.

For instance, the New York Post app is a paid download that includes a 30-day subscription. Renewals are handled within iTunes.

The Columbus Dispatch can be downloaded for free, but users must register to get access to a 14-day trial. Past that, users need a subscription, which is handled by the publisher.

The Wall Street Journal is a free download but full access is restricted to print subscribers, also handled directly by the publisher.

And of course some publications, like USA Today, are entirely free.

What publishers and consumers need from Apple is a real digital newsstand, which would allow:

  • One-stop shopping for multiple publications
  • The ability to buy a single issue or subscribe
  • Capability to connect print and tablet subscriptions, including any package discounts
  • A central location to access purchased or downloaded publications
  • Sales via iTunes or a publisher’s own circulation system, with royalties adjusted appropriately

Publishers still would be able to set their own prices for single copy and subscription sales. And they could still have apps that include archives of their publications. Customers would have an easier time finding publications that interest them and figuring out what they cost.

It is easy to forget that only a year ago tablets were still a distant vision for most publishers. But 4 million iPad sales later, it is time for Apple, and the publishing industry, to figure this thing out to everyone’s benefit.

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