Though book publishers were more than happy to jump on the iBookstore bandwagon in order to give them leverage against Amazon's $9.99 e-book prices, magazine and newspaper publishers have remained cautious. Apple's 30 percent take of sale prices and historical practice of not sharing customer data seem to be sticking points that could hold up content deals for the upcoming iPad.
Talks are still ongoing, and don't appear to be contentious, but these two issues have risen as top concerns for content providers. Having demographic information about subscribers has been an important asset to magazines and newspapers, especially when it comes to selling advertising. "Is it a dealbreaker? It's pretty damn close," an executive at one US newspaper told Financial Times.
The pricing split, with 30 percent going to Apple and 70 percent going to content providers, seems to be an issue as well. "Thirty percent forever changes the economics," one media executive told FT. "Should [subscriptions] be treated differently than single-item sales?" That's a good question, but magazines regularly offer annual or biannual subscription prices that are 50 percent or more off the cover price.
In the face of dwindling subscriber counts—especially for newspapers—and a growing concern about how to monetize content in an increasingly online world, it seems unwise to pick nits about the revenue split. Apple's 30 percent earns it a smallish, if non-zero, profit, and the majority of it covers Apple's costs to maintain its servers, bandwidth, credit card processing, and some marketing.
The loss of specific subscriber information could be more damaging in the short term, but it may just mean a shift in how publications gather demographic data. Condé Nast (Ars Technica's parent company) is already experimenting with providing iPad versions of GQ, Vanity Fair, and Wired. "We look at iTunes as a digital newsstand," Sarah Chubb, president of Condé Nast Digital, told FT.
