Apple recently announced its plan to tack a 30 percent fee on to publishers who charge subscriptions through its App Store. These fees apply to magazines, books, newspapers, music and videos. Apple is also dictating that these publishers can’t offer their subscriptions elsewhere at a lower price, and the consumers will have the option to withhold to sharing their details — such as their name or location — with the publisher.
Media companies involved in this battle are preparing their own legal responses, most notably Time Inc. Time Warner’s publishing arm has yet to reach an agreement to sell subscriptions for the digital version of Sports Illustrated. “We have agreements with other tablet makers on mutually beneficial business terms,” a spokesperson for Time Inc. said. “Apple’s latest announcement seems to be a step in the right direction, but it raises a lot of questions, mostly centered around consumer data, that we have to work through and agree on.”
The publishing industry has lost a lot of leverage over its most valuable asset: distribution. The balance of power has been shifted from publishers to tech companies that can supply and distribute products more effectively. This service hasn’t been solidified yet, but Apple’s bold moves are indicating the publishers may have already lost the battle.