Economist CEO: Apple’s 30% Subscription Cut Is Fine But Flipboard’s A “Head-On Competitor”

Economist CEO: Apple’s 30% Subscription Cut Is Fine But Flipboard’s A “Head-On Competitor”

Despite a presence in Flipboard, The Economist's CEO sees the app as competition

Apple’s Newsstand feature wasn’t without controversy as the company rolled it out. Issues around Apple’s control of subscriptions as well as the company’s 30% cut of content sales were hotly debated last year. However, with Newsstand a hit, publishers (and Apple) are reaping $70,000 a day from it.

And, if publishing execs everywhere agree with The Economist’s CEO Andrew Rashbass, that controversy is dead and buried – and it’s other iOS digital distribution models that pose a threat to publishers.

Speaking to the Paley Center’s international council in Madrid on Thursday, Rashbass noted that Apple’s model is similar to other publishing agreements including the company’s cut of sales.

I don’t find the 30% problem problematic. The majority of people in this room have always worked through third parties – whether through newsstands or other things. Even we have always have a newsstand presence.

Instead, he identified iOS content aggregators as the chief threat in mobile publishing, citing the popular Flipbook app by name and calling it a “head-on competitor.”

Like other iOS content apps, Flipboard pulls together a range of content and displays it in an attractive newspaper or magazine layout style. That content can include social network timelines, RSS feeds via Google Reader, read-later services like Instapaper, and content from online publications.

The Economist has a presence in Flipboard, but content is pulled from the company’s website (generally without ads) rather than being drawn from or packaged in the same way as the print magazine or digital editions through The Economist app, which supports Newsstand.

Rashbass called Flipboard “problematic” because context is pulled without context and delivered in a way that’s difficult for publishers to monetize. Publishers had similar complaints as publishing moved to the web and services like Google News offered the ability to cherry-pick content. Indeed, that was the chief complaint that Rashbass had.

But you’re heading down a route we’ve seen before – giving the opportunity to extract value to somebody else in an area that should be our own.

He also noted that many news and information aggregators don’t consult with publications from which they draw content.

They didn’t ask me and, if they did, I’d probably have said no.

Rashbass also said that he expects The Economist and other publications to eventually go all-digital, though he didn’t offer a particular timeline for when or how that would happen.

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About the author

Ryan FaasRyan Faas is a technology journalist and consultant living in upstate New York who has written extensively about Apple, business and enterprise IT, and the mobile industry. In addition to writing for Cult of Mac, he is a contributor to Computerworld, InformIT, and Peachpit Press. In a previous existence he was a healthcare IT director as well as a systems and network administrator. Follow Ryan on Twitter and Google +

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