Publishers Stumble Over Key Issues in iPad Deal

Publishers are stumbling over key issues such as sharing subscription revenues as they consider digitally distributing content on the iPad, according to the Financial Times.

These talks are in early stages and were considered friendly and ongoing, executives familiar with the discussions said. But Apple's proposals could significantly alter business practices that have protected profits over decades, publishers fear.

Ownership of subscriber information and pricing have emerged as key issues.


Apple shares very little consumer data with their partners. "Is it a dealbreaker? It's pretty damn close," said one senior media executive of a major US metropolitan daily newspaper. Publishers use subscriber information to create marketing plans and decide on the content of upcoming publications. Apple's current policy would separate publishers from their most valuable asset.

"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 point of contention is Apple's compensation model. Magazine publishers especially are finding it difficult to give away almost a third of subscription sales for an indefinite period of time.

"Thirty per cent forever changes the economics," one media executive in discussions with Apple said. "You can imagine we feel less good about it. Should (subscriptions) be treated differently than single item sales?"


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