{"id":4910,"date":"2011-02-21T10:22:13","date_gmt":"2011-02-21T09:22:13","guid":{"rendered":"http:\/\/tokao.com\/?p=4910"},"modified":"2011-02-21T10:22:13","modified_gmt":"2011-02-21T09:22:13","slug":"steve-jobs-doesnt-want-to-kill-publishers-but-apples-subscription-strategy-will","status":"publish","type":"post","link":"https:\/\/tokao.com\/wordpress\/2011\/02\/21\/steve-jobs-doesnt-want-to-kill-publishers-but-apples-subscription-strategy-will\/","title":{"rendered":"Steve Jobs Doesn\u2019t Want to Kill Publishers, But Apple\u2019s Subscription Strategy Will"},"content":{"rendered":"<p><em>This guest post is by Tien Tzuo, founder of\u00a0<a href=\"http:\/\/www.zuora.com\/\">Zuora<\/a>, a subscription billing company. Previously, he was chief strategy officer and employee No. 11 at Salesforce.com.<\/em><\/p>\n<p>Publishers have been struggling for years. Now local newspapers, magazines and even the New York Times, that Grey Lady, are being treated like old ladies by Apple, stealing their pocketbooks while they\u2019re trying to stay on a fixed income.<\/p>\n<p>This week, Apple announced what the publishing industry has been clamoring for,<a href=\"http:\/\/techcrunch.com\/2011\/02\/15\/apple-launches-subscriptions-for-content-publishers-on-the-app-store\/\">subscriptions<\/a>, in exchange for a whopping 30% cut. Clearly, paid subscriptions are a part of the future of all online media, whether tied to a print version or not. That\u2019s what\u00a0<em>The Daily<\/em> is all about and even AOL might one day go down that path (<a href=\"http:\/\/www.cnn.com\/video\/?\/video\/bestoftv\/2011\/02\/07\/exp.piers.ariana.huffington.sale.cnn\">Tim Armstrong admitted as much on CNN<\/a>). It\u2019s part of the shift to the Subscription Economy that\u2019s happening across not just media, but software, cloud computing, communications, consumer services, entertainment, you name it. In just the past year, as one example, my company, Zuora,\u00a0<a href=\"http:\/\/www.techcrunchit.com\/2010\/05\/12\/billing-startup-zuora-signs-over-1-billion-in-subscription-revenue-in-q1\/\">has signed over $1 billion in contracted subscription revenue<\/a>.<\/p>\n<p>But something very dangerous is happening. Apple is now calling the shots for the entire publishing industry\u2019s digital strategy. Think about that for a minute. While Apple is prescient and makes great products, it\u2019s hardly a publishing expert. Yet, Apple is setting up new rules that could bring the publishing industry to its knees. As if it weren\u2019t already in that position.<\/p>\n<p>It\u2019s not that Apple can\u2019t save publishers\u2014which I don\u2019t think it will with these financial terms. It\u2019s that its model completely ignores the realities of the publishing business:<\/p>\n<ul>\n<li>The App Store and iTunes only offers one subscription pricing model. Will a single model work for the\u00a0<em>San Jose Mercury News<\/em>, the\u00a0<em>Wichita Eagle<\/em> and\u00a0<em>Runners World<\/em>? The reality is that it\u2019s likely going to be very different for different titles and subscribers.<\/li>\n<li>Apple has no way to bundle physical and digital goods. Do you want to give up home delivery forever? Or would you still like to get a Sunday paper every week or monthly glossy magazine along with your digital version? I bet most consumers would like some combination of both.<\/li>\n<li>With the Apple model, there\u2019s not enough adequate ad revenue from tablet editions of magazines and newspapers. In particular, eliminating the Sunday delivery also means that local papers lose a huge advertising vehicle.<\/li>\n<li>Consumers won\u2019t stand for one subscription through one device. People want to consume their news on whatever device they have at hand\u2014whether it\u2019s a Blackberry, an iPad or an Android phone. Amazon is showing us all the way with their \u201cKindle reader everywhere\u201d strategy (with syncing bookmarks to boot), and\u00a0<a href=\"http:\/\/techcrunch.com\/2011\/02\/11\/android-sports-illusrated-digital\/\">Google has set a strong standard<\/a> in its deal with Time Inc around Sports Illustrated subscriptions. Publishers also know that content ubiquity requires platform independence.<\/li>\n<li><a href=\"http:\/\/voices.allthingsd.com\/20110210\/have-we-forgotten-the-customer-in-the-customer-ownership-battle\/\">As last week\u2019s article from John Squires<\/a>, former EVP for Time Inc, so rightly points out, access to customer data is truly the lifeblood of the publisher\u2019s business model. In the Apple world, Apple is the one controlling this data.<\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.ft.com\/cms\/s\/746b73de-1a7d-11df-bef7-00144feab49a,Authorised=false.html?_i_location=http:\/\/www.ft.com\/cms\/s\/0\/746b73de-1a7d-11df-bef7-00144feab49a.html&amp;_i_referer=\">To quote Steve Jobs himself<\/a>, \u201cA functioning media is vital to a functioning democracy.\u201d I agree, and I think there\u2019s a better way to use the genius of the iPad and other devices that enables publishers to control more of their destiny\u2014and benefits everyone financially.<\/p>\n<p>So what\u2019s a publisher to do?<\/p>\n<ul><strong>Take Matters Into Your Own Hands<\/strong>: Don\u2019t be tempted by that juicy red apple called the iPad. You need to build your own online subscription commerce strategy, one that allows for lots of different ways to package up your content and sell it.<\/p>\n<p><strong>Not Your Father\u2019s Subscriptions<\/strong>: The industry continues to see \u201csubscriptions\u201d in terms that are far too simplistic. Yes, consumers will never agree to switch to a full \u201csubscription only\u201d paywall, so you need to have flexible billing that can slice, dice and package content by the month, the article, by home delivery days, by online, and the list goes on.<\/p>\n<p><strong>Make It Easy<\/strong>: Provide customers single click convenience while providing a\u00a0<a href=\"http:\/\/en.wikipedia.org\/wiki\/Payment_Card_Industry_Data_Security_Standard\">PCI-compliant<\/a>payment and billing process. You need to be able to bundle, cross-sell and rapidly deploy promotions to capture more readers than you ever could through a call center.<\/ul>\n<p>And as for Apple? Can you redeem yourself?<\/p>\n<ul><strong>Customers with Benefits<\/strong>: If you want that 30% cut you have to let the publishers own the subscriber relationship. Share that data and you both win. Simply giving subscribers \u201cthe option\u201d won\u2019t cut it.<\/p>\n<p><strong>Freedom of Choice<\/strong>: You know consumers want both print and digital. This isn\u2019t music. There\u2019s no love lost for the CD. Most consumers want to keep home delivery, and publishers want to be free to work across platforms and devices. \u201cControl\u201d and \u201cclosed\u201d are completely counter to the anti-Big Brother brand.<\/p>\n<p><strong>Help Them Help You<\/strong>: Selling publications is not the same as marketing the latest Black Eyed Peas song. Newspapers and magazine titles will get lost in the iTunes model. Just being part of the App Store isn\u2019t enough. You need to deliver more merchandise value for a 30% cut.<\/ul>\n<p>The bottom line? The Subscription Economy is here, and Apple should be applauded for offering content via subscription. Unfortunately its model just scratches the surface. In the end, publishers should think twice before taking a bite of the Apple. This current plan will do more to hurt publishers then to help them make the shift to the online world.<\/p>\n<h5>(from <a href=\"http:\/\/techcrunch.com\/2011\/02\/19\/apple-kill-publishers\/\" target=\"_blank\">techcrunch<\/a>)<\/h5>\n","protected":false},"excerpt":{"rendered":"<p>This guest post is by Tien Tzuo, founder of\u00a0Zuora, a subscription billing company. Previously, he was chief strategy officer and employee No. 11 at Salesforce.com. Publishers have been struggling for years. Now local newspapers, magazines and even the New York Times, that Grey Lady, are being treated like old ladies by Apple, stealing their pocketbooks [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[78,5],"class_list":["post-4910","post","type-post","status-publish","format-standard","hentry","category-technology","tag-apple","tag-news"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/posts\/4910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/comments?post=4910"}],"version-history":[{"count":0,"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/posts\/4910\/revisions"}],"wp:attachment":[{"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/media?parent=4910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/categories?post=4910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tokao.com\/wordpress\/wp-json\/wp\/v2\/tags?post=4910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}