Apple And Time Finally Strike A Deal
Michael Harper for redOrbit.com
Oh how the mighty have fallen.
One of the most outspoken critics of selling subscriptions through Apple´s Newsstand app has finally decided to ditch their principles and join forces with the iMaker. The two companies announced their deal on Wednesday.
The New York Times is reporting Time Inc.´s chief executive Laura Lang and Apple´s senior vice president for Internet software and services Eddy Cue have confirmed the agreement in phone interviews. This deal will allow Apple customers to subscribe to 20 of Time´s publications, such as Entertainment Weekly, InStyle, People and Sports Illustrated via the Newsstand app.
“We are thrilled to bring our entire US portfolio to Newsstand. It´s an important step toward fulfilling our goal of being everywhere consumers want us to be,” said Laura Lang in a statement.
Other large publishers, such as CondÃ© Nast and Hearst were quick to sign deals with Apple to bring their publications to the hordes of iPad and iPhone users. Time Inc., on the other hand, had their hesitations and were displeased with some of the restrictions Apple imposes on their publishers. Some of their restrictions include giving Apple 30% of the cut for every subscriber and not allowing new subscribers a way to sign up outside of their App store.
Until now, Time Inc. had only offered single-issue app versions of their most popular publications.
“For a magazine or brand like People or Time, a tablet will become an increasingly important part of the experience,” Ms. Lang said.
Lang took the reins at Time Inc. in January and has said signing a deal with Apple was a top priority for her.
According to MarketWatch, Time Inc. may have been encouraged to strike this deal with Apple due to a drop in income. In 2011, Time Warner´s publishing division recorded a 9% loss due to fewer subscriptions and a decrease in advertising revenue. Time admitted at the time that their publishing business would be hurt by digital distribution deals.
Neither Apple nor Time offered any financial details about the agreement, though Mr. Cue did say they were not intimidated by Time´s size.
“We offer the same terms to everyone no matter how big or how small,” he said.
Currently, Apple sells more than 5,000 publications to be read on their smartphones and tablets via their Newsstand app. There, customers buy entire subscriptions or single issues, a benefit for the struggling publishers.
Apple also stands to benefit from announcements such as these as their app store progresses from just games and fart apps and moves into the realm of information and news.
When they first released Newsstand, many publishers, like Time, balked at Apple´s terms. For instance, Apple wanted to hold onto subscriber data, a valuable source of information for the publishers, allowing them to customize ads and make themselves more appealing to advertisers. Now, Apple allows their customers the choice to share their information. This new decision seems to be working, as 66% of tablet users say they would share their data with the publishers of their favorite magazines. Time´s magazines are now available and ready for download in Apple´s Newsstand store.