Apple is preparing to throw an iPad lifeline to the rapidly sinking news biz by offering to host a newspaper subscription service on its "magical and revolutionary" device.
That's the word from the San Jose Mercury News, which notes that an announcement of the service is expected "soon".
This lifeline would not be a philanthropic helping hand to a struggling fourth estate that's bleeding money from lost subscriptions and advertising. According to the Merc's sources, Cupertino is demanding a hefty 30 per cent of subscription dollars and up to 40 per cent of advertising revenues.
That 40 per cent figure would be outlandish if applied to all of a newspaper's advertising revenue — odds are that it refers only to ads pushed onto the newspaper apps by Apple's iAd service, of which Cupertino keeps a 40 per cent cut for its efforts. Apple, of course, declined to comment.
The Merc also reports that Apple would provide an opt-in service that would enable newspapers to obtain the oh-so-valuable demographic information from subscribers that would enable their ad-sales staffs to convince advertisers to open their budgetary coffers.
Currently, only a few top-tier newspapaers offer paid subscriptions for the iPad or iPhone — the Financial Times at $4.25 or $6.25 per week, for example, or the Wall Street Journal at $3.99 per week. A fully Apple-supported and managed service would enable a far broader range of local and regional papers to jump on the digital-delivery bus.
The life-or-death challenge for those rags, however, would be how to get iPad users to pay for something that they can now get for free on a newspaper's website.
Different papers of different sizes are trying different strategies to keep subscriber revenue flowing. The shrinking San Francisco Chronicle, for example, delays selected stories from its website and offers an "e-edition" in addition to its paper-based offering. The New York Times is planning to start a "10 articles for free then you pay" scheme next January.
Results of newspapers' attempts to charge for content have been mixed, at best. The word on the street is that Rupert Murdoch's paywall strategy for The Times of London has been a bust, for example, as was The New York Times' first paid-content experiment, TimesSelect.
Murdoch still has high hopes for the iPad and its ilk, however, saying recently that "I think we're going to see, around the world, hundreds and hundreds of millions of these devices," and that those tablets will help revitalize the newspaper industry.
Being in the news biz ourselves, The Reg is crossing its collective fingers that paid journalism can remain viable. But the only way that readers who are accustomed to receiving their news for free will begin paying for it is if all outlets in a given market were to switch to a for-pay model simultaneously.
And not even Apple and its magic and revolutionary device has the reach and the persuasive clout to accomplish that feat. ®
At least one Silicon Valley bigwig doesn't believe that Apple's iAd service will succeed in saving the newspaper business — or, for that matter, succeed at all. Yahoo! CEO Carol Bartz told Reuters Wednesday about iAds: "That's going to fall apart for them. Advertisers are not going to have that type of control over them. Apple wants total control over those ads." At least she didn't tell Apple to "fuck off."