‘We Can’t Treat Newspapers or Magazines Any Differently Than We Treat FarmVille.’

L. Gordon Crovitz, writing for the WSJ:

‘I don’t think you understand. We can’t treat newspapers or magazines any differently than we treat FarmVille.”

With those words, senior Apple executive Eddy Cue stuck to his take-it-or-leave-it business model of a 30% revenue share payable for transactions through the iTunes service. Despite my arguments to Mr. Cue in Apple’s Cupertino, Calif., offices last year on behalf of news publishers seeking different terms, to him there was no difference between a newspaper and an online game.

It was a sobering reminder that traditional media brands have no preferred place in the new digital world. It also should be the defense’s Exhibit A in the Justice Department’s antitrust case against Apple and book publishers: The 30% revenue-share model is Apple’s standard practice, not, as alleged by the government, the product of a conspiracy.

This is one of my biggest questions about the DOJ’s suit against Apple. Why are books any different than music or apps or periodicals? (And, if Apple loses this suit, does it mean their App Store and Music Store 70/30 pricing models are at risk too?)

Update: Via email and Twitter, several readers point out the key difference between the iBookstore and Apple’s other media — the “most favored nation” clause Apple required from the publishers, which forbids the publishers from selling e-books at another store for a lower price than the iBookstore.

β˜… Monday, 23 April 2012

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