Apple now requires that newspaper and periodical apps offering access to subscription content either offer subscriptions through in-app purchase, which entitles Apple to a 30 percent cut of all revenue, or remove links to their own external subscription sign-up pages. FT‘s subscriptions were handled outside of the store, and rather than just remove the sign up link like competitor The Wall Street Journal did, FT apparently prefers removing its native software altogether in the hopes that readers will make the transition to the web-based app.
The problem with Apple’s model wasn’t so much the revenue split, according to FT CEO John ridding, who spoke to paidContent.org recently. More important to the newspaper was the valuable customer information normally gathered through subscriptions, which under Apple’s model is an opt-in process that customers can decide on for themselves, rather than something passed on to the publisher automatically. FT‘s revenue model depends on its ability to gather that information, which isn’t guaranteed through Apple’s system.
But the effect the iPad has had on FT‘s digital success is not insignificant. FT.com now represents around one-quarter of the newspaper’s overall sales, and the iPad was directly leading to around 10 percent of the company’s digital subscriptions. Since the iPad’s introduction, however, the FT has seen around 100,000 new subscriptions, and even if only a fraction of those actually signed up through the iPad, that doesn’t mean other web-based subscribers didn’t consider iPad access a motivating factor in their decision.
The web app has already seen 550,000 users according to the FT, but it also provided free access for multiple weeks following launch, so it’s too early to say whether it’ll be able to drive the same kind of subscriber increases that the app managed.
So far, Apple has had mixed results when it comes to convincing publishers to embrace its subscription model, but many magazines in particular seem to be on board, and that number is growing. That might be because magazines depend more heavily on advertising dollars as opposed to subscriber info for revenue. FT is actually planning to continue to use the App Store for those type of products, including its How To Spend It weekend luxury magazine.
For those interested in seeing how an outsider approach to Apple’s ecosystem works out when compared to playing nice with Apple’s guidelines in exchange for a spot in the App Store, the FT represents a near-perfect test case, so stay tuned.