Time Inc. Frustrated by Apple Over iPad Subscription Issue

Peter Kafka on Time Inc.’s frustrations with the Sports Illustrated iPad app:

Last month, the publisher was set to launch a subscription version of its Sports Illustrated iPad app, where consumers would download the magazines via Apple’s iTunes but would pay Time Inc. directly. But Apple rejected the app at the last minute, forcing the Time Warner unit to sell single copies, using iTunes as a middleman, multiple sources tell me.

The problem is not as simple as Apple not allowing third-party publishers to bill users directly, without going through iTunes so that Apple gets a cut of the pie, because:

Confusing the issue even more is that Apple already allows a handful of app makers — like Amazon and the Wall Street Journal, which like this Web site is owned by News Corp. — to bill customers directly. Amazon itself, meanwhile, has been sparring with publishers over subscriptions for its Kindle platform. Jeff Bezos keeps most of the data and money that those transactions generate, too.

Here’s the difference, I think. With Amazon and the Wall Street Journal, users set up and create their accounts on the web, not within the iOS apps. The WSJ app requires a subscription that doesn’t go through iTunes, but you create, pay for, and manage that subscription on the web. Judging from Kafka’s description of the Sports Illustrated situation, it sounds like Time tried to add its own direct billing subscription system within the Sports Illustrated app itself.

(The Sports Illustrated iPad app is free, and from within the app, you can buy individual issues. Samples are free, most regular issues are $5.)

Anyway, the whole problem would just go away if Apple would spell out what the rules are for subscription publications.

★ Wednesday, 28 July 2010