Newspapers Fall Out of Love With Apple Over Subscription Policy

The past year's relationship between Apple and newspaper publishers proves the old adage that love is blind. It's clear from the new Apple app policy that love needs more time to prove itself.

Apple's new iTunes subscription policy throws a wet blanket over the efforts of leading brand newspapers to develop apps for the iPad platform. It is a wakeup call for publishers seduced by the beauty of the iPad, the simplicity of iTunes and the brand of Apple.

The careful calculus that will emerge depends more now on audience and engagement than blind faith in one company.

Wipe the slate clean and here's what news publishers need:

  • Data That Drives Business Model Options: The ability to capture customer data, manage the customer relationship, work toward an advertising model and generally control their own destiny when it comes to emerging business models.
  • Policy That Works Across Platforms: The ability to incorporate smartphone and tablet app subscriptions with print and Web subscriptions in a platform-agnostic, multimedia "newspaper anywhere" strategy.

What worries publishers is the additive effect of the Apple policy. Publishers are being told to live with a 30 percent cut for Apple and that they won't own the customer relationship and how to price/promote their apps. Combined, the Apple policy now impacts the newspaper business model beyond tablets.

What the new Apple policy does is treat all of the world's 10,000+ daily newspapers the same. The fact is, the elite newspapers have robust CRM systems that are excellent at capturing and managing customer data. On the other hand, many publishers don't have such systems and iTunes is the perfect service to sell subscriptions. I'd like to see flexible improvements to the Apple policy that take into account these different levels of publisher.

When the iPad emerged last year, newspaper publisher optimism about the product, the platform and Apple itself defied P&Ls, market demand, and pretty much every credo by which newspapers live. Such is the case when love is blind.

Last year, I visited newspapers in Europe, Latin America, the South Pacific and South Asia long before the iPad was released in their countries. It was one of those great creative moments when they proudly showed off their apps often read by only a few hundred business travelers that bought the tablet overseas. There was no market, but there was a lot of faith. It was a badge of honor.

If the rules announced this past week existed one year ago, what you would have seen is a more rational, cautious approach to iPad app development by newspaper publishers. As it is, Apple changed the rules. Shame on us.

The new subscription policy doesn't kill the newspaper industry's relationship with Apple, but it does deflate the irrationality of the relationship. In one swoop, Apple went down the path to being just another vendor serving the news industry -- albeit one in too privileged a position for many countries' antitrust laws.

And publishers will respond in kind. They'll look anew at their app strategy and take a more platform-agnostic approach. They'll look more carefully at tablets in general versus the iPad specifically. There will be new energy and enthusiasm for HTML5 alternatives and tablet competitors -- such as Google's One-Pass service announced this week.

Publishers will still work with Apple, but they'll check their pockets before they leave the room next time. It will be a more sane, more sober relationship moving forward. And that's probably a good thing.

Our faith in Apple has been shaken. We can make up, we can make it work, and we can move forward. But the relationship may never be the same again.