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Wednesday, July 28, 2010, 05:10 am PT (08:10 am ET)

Publishers frustrated as Apple blocks iPad subscriptions

Publishers looking to offer subscriptions to digital versions of their magazines on the iPad have been blocked by Apple, as the company has allegedly rejected subscriptions from the App Store without an explanation.

Last month, Time Inc. submitted a subscription version of its Sports Illustrated iPad application to the App Store. Apple, at the last minute, rejected the software, forcing the magazine to sell single copies of the publication, according to Peter Kafka of MediaMemo.

It's not just the publishers who want subscriptions: reviews for magazines like Sports Illustrated are overwhelmingly negative as users are dissatisfied with the $4.99-per-issue price on the App Store. Currently, out of 147 reviews, 97 users have given the magazine's application one star. The average review is two stars.

"Not gonna pay what SI charges per issue," user Russ1409 wrote. "Lower the cost, SI, get behind the new technology, but don't gouge us."

Sources with Time Inc. told Kafka that executives at the company "have been going nuts" in an attempt to get Apple to approve subscription plans. Subscriptions are an important part of the print business model, as they provide recurring revenue and customer data for advertisers.

Time Inc. officials were reportedly surprised by Apple's rejection, as the company made a major effort to reach out to them and others. Officials were reportedly under the impression that subscription plans were acceptable to Apple.

"So what happened?" Kafka wrote. "The Time Inc. insiders I talked to don't have a clear answer, presumably because they can’t get one from Apple itself. One theory: Apple is concerned about the publisher’s plans for the consumer data it would collect with each subscription. A darker one: Steve Jobs loves the idea of digital magazines and wants to control the market for himself."

Some App Store software, such as Amazon's Kindle, or The Wall Street Journal's application, does allow for customers to be charged directly. But other content providers, like The New York Times, have yet to offer digital subscriptions.