If Apple CEO Steve Jobs is to realize his vision for the iPad as an information-sharing device, he may have to win-over newspapers to that idea, a new report suggests. Although talks between Apple and newspapers are described as “friendly,” the head of one major daily calls Cupertino’s demands a potential “dealbreaker.”
The key sticking points in the discussions are two-fold: Apple’s desire to share subscriber information and other data viewed as valuable by publishers, as well as how revenue-sharing applies to newspaper and magazine publishers. Publishers have amassed subscriber names, addresses and credit cards often used to develop marketing campaigns, even newspaper content.
A battle could also be waged over Apple taking nearly a third of subscription revenue “forever,” the Financial Times reports. The Cupertino, Calif. company is seen as unwilling to compromise on this issue, seeing it at the crux of how it made $0.99 songs via iTunes profitable.
Although Apple has offered a 70/30 revenue split with publishers taking the largest portion, some media executives balk at the “forever” provision. “30 percent forever changes the economics,” one exec told the FT. “You can imagine we feel less good about it,” the exec explained. While the revenue split is advantageous for book publishers selling $20 titles, the revenue-sharing concept doesn’t make as much economical sense when it comes to newspaper or magazine subscriptions, publishers argue. Such a deal could cede to Apple a third of subscription sales at a time when newspapers and magazines are struggling to stay afloat, according to the report.
Of course, this struggle isn’t new for the industry. The same concerns arose when music publishers were approached to sell via iTunes or newspaper publishers were asked to sell via Amazon’s Kindle.