New Subscription Service Tightens Apple’s Control Over Content

Yesterday’s launch of The Daily, Rupert Murdoch’s iPad-only newspaper, marked the introduction of Apple’s new subscription model – a way for publishers to offer renewable subscriptions to their app-based content. And while Apple is heralding the move as a way for publishers to get more customers, some are uneasy about the company’s efforts to channel all billing and delivery through its iTunes marketplace.

The concern comes, in part, as a response to news on Tuesday that Apple had rejected Sony’s e-reader app as it allowed users to buy as well as read books from the Sony Reader store. That rejection caused immediate speculation (verging on panic) that this would have huge ramifications for other apps that do something similar – namely, the Amazon Kindle app, the Netflix app, the Barnes & Noble Nook app, and so on.

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Apple responded to the outcry, saying that “nothing had changed” in its Terms of Service. But whether it’s the spirit or the letter of the law, clearly things have, if only with the introduction of this new subscription offering.

The Wall Street Journal reports that publishers have been notified that by March 31, “newspaper and magazine apps that don’t take payments through the iTunes store will be rejected.”

Apple traditionally takes a 30% cut from developers’ app sales, but it’s not known what the company’s share of subscription revenues would be. For its part, Apple contends that by managing the billing, it will help publishers sell more content. Indeed, many publishers have long lobbied for Apple to add the subscription feature as it will improve delivery over the current system, which until now has forced users to buy a new app for each new “issue.” And as sales of digital magazines have been less than stellar, a better billing and delivery system may not be a bad thing.

That is, of course, unless you’re a publisher who’s built your business model on selling digital content through your own website, rather than via the iTunes store.

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