Google Inc. unveiled a digital-content service that gives publishers a bigger 90% cut of subscription sales than a competing program introduced yesterday by Apple Inc., which gives publishers 70% at the iTunes Store.
My nose tells me Apple is making a rare mistake here. Maybe even an inflection point mistake. Google may well be in the right place at the right time.
Publishers are making no bones about their dislike of Apple’s 30% cut of digital subscriptions, arguing Apple does not have the overhead of app review and development tool development to amortize as in the case of software apps.
Publishers are also seething at Apple’s rather cavalier handling of subscriber information: the user gets to decide whether to pass on the subscriber’s identity to the publisher. How’d you like to be publishing in the dark, with no connection or feedback loop with your readers?
There’s even talk of antitrust, which Big Apple should take seriously after what happened over the last decade to Microsoft, Intel, and Oracle, to name three. [Update Even as I was typing, the Wall Street Journal was reporting interest by the FTC and DOJ.]
Option 1: Apple caves down closer to Google’s 10 percent haircut. Everyone embraces and goes off for martinis.
Option 2: Publishers cave. Apple wins.
Option 3: Publishers walk towards — Anybody But Apple, taking their content with them. Android would be today’s godsend. Publishers use their clout to make sure Android gets lots of press limelight as an effective tablet and smartphone alternative to iPad and iPhone. Apple starts looking a bit moth-eaten as popular publishing franchises are no longer available.
Option 4: Publishers end around iTunes Store, crafting mobile sign-up routines and targeting the iOS Safari browser. They’d pay zero to Apple and keep their own customers too.
There are and have been discussions about Option 1. Don’t stay up late waiting for a verdict.
My money is on Options 3 and 4. Together.
via – Businessweek.