Magazine publishers anxiously seeking iPad subscription deals from Apple

In a story profiling the apparent frustration of publishers with the iPad, The New York Times notes that the ongoing development of a new application subscription feature through Apple's App Store was apparently the reason The Daily, a new tablet-only newspaper from media giant News Corporation, was delayed from an anticipated launch this week.

"It is expected that magazines will eventually have an arrangement similar to the one News Corporation has with Apple that allows for iPad subscriptions," author Jeremy W. Peters wrote. "But no such deals have been struck yet with Conde Nast, Hearst or Time Inc., said people close to discussions with Apple that were intended to be private."

In the meantime, magazine publishers must make due with the existing pay-per issue approach, which has thus far frustrated their efforts to fully capitalize on the booming tablet market that some industry watchers expect to explode into a 50 million unit business this year.

Consumers have thus far shown a reluctance to pay newsstand premiums for digital copies of magazines on the App Store, such as the $4.99 per-issue charged for the weekly publication The New Yorker. That translates to more than $250 a year to read the magazine on the iPad, well above print subscription rates for a digital product with only a fraction of the overhead to produce.

In addition, in the case of most magazines on the App Store, consumers must manually fetch each new issue and purchase it individually rather than have it delivered to their iPad automatically. That similarly doesn't bode well for magazine publishers, who generate the bulk of their revenues off yearly subscriptions rather than impulse buys.

“If you look at the Apple store the most common reason that people give an app a low rating is that it lacks a subscription option," said David Carey, president of Hearst Magazines. "They want to subscribe, and they don’t like the idea of paying $4.99 a month.”

According to the Times, Apple is also refusing to share consumer data with the initial wave of App Store magazine publishers, data that would otherwise help publishers learn about their digital audiences and provide clues on how to better fine tune their offerings.

As such, many publishers are looking forward to competitive tablet platforms from BlackBerry and those based on Google's Android operating system. They hope the advent of these iPad rivals will pressure Apple into providing publishers with more flexibility over the way they deliver and price their magazines for iPad users.

Andrew Swinand, president of the Starcom MediaVest Group, which helps advertisers place their content in magazines, said publishers are also taking hold of tablet devices with more enthusiasm than they did with the Web.

For example, they offer a platform for richer content and advertisements, superior reader interaction, and unlock additional revenue-generating opportunities through the sale of stand-alone feature issues that may cost $5 and focuse on a particular subject such as cooking for the holidays or re-modeling a kitchen.