Financial Times reports that talks between Apple and a number of newspaper and magazine publishers have encountered several hurdles that have slowed the deal-making process as the periodicals publishing industry attempts to understand how the move to digital distribution will affect its business.
One of the major concerns publishers are reportedly having pertains to Apple’s policy of sharing only limited customer information with its content partners. As the report notes, publishers have long mined data on their subscribers in order to develop marketing efforts and evolve the focus of their publications over time, but Apple’s reluctance to share that information is reportedly making publishers uneasy.
Apple’s practice of sharing with its partners little consumer data beyond sales volume is a problem. “Is it a dealbreaker? It’s pretty damn close,” said one senior media executive of a US metropolitan daily newspaper.
Publishers have spent decades collecting information about subscribers that influence marketing plans and, in some cases, the content of the publication itself. Apple’s policy would separate them from their most valuable asset, publishing executives said. “We must keep the relationship with our readers,” says Sara Öhrvall, senior vice-president of research at Swedish publisher Bonnier . “That’s the only way to make a good magazine.”
Another concern for newspaper and magazine publishers is Apple’s proposed revenue sharing arrangement, which involves Apple taking a 30% share of revenue for handling distribution. The arrangement is the same as that being used in dealings with book publishers and already in effect for application developers in the company’s App Store. Periodical publishers are reportedly unhappy with being asked to give up 30% of revenue on an ongoing basis and argue that their recurring charges for continuing content should be treated differently than single-payment content offerings.
Despite the hurdles, the report notes that the talks are “considered friendly and continuing”, suggesting that deals are still likely to be made as publishers remain excited about the platform and new potential revenue streams available through it.