Should Publishers Still Fear Apple?

For a while, it may have seemed to newspaper and magazine publishers that Steve Jobs held their future in his hands. But new developments on the tech and competitive landscape are easing those concerns that Apple would play the role of unchallenged kingmaker in the emerging market of mobile and tablet publishing platforms.

There’s now hope from the emergence of the HTML5 standard, which allows them to sell content via the Internet on iPads and iPhones without paying Apple’s hefty gatekeeper’s fee. Meanwhile, Apple competitors like Google and Amazon are developing their own digital publishing schemes that should also improve publishers’ options.

Those realities probably led Apple to quietly end its controversial policy of requiring publishers with apps on iPads, iPhones and iPods to sell exclusively through Apple’s App Store and give the company a 30 percent cut, analysts say. Apple also ended its requirement that publishers offer content at the store at the same price or lower than they offer it elsewhere, effectively cutting their profit potential by a third.

“Apple is trying to maintain their hold on publishers, but the fact that they have loosened their regulations means that they recognize that this is not necessarily possible,” said Tonia Edwards, a media analyst with Balentine and professor of film and media at Georgia State University.

Among the many potentially alarming developments for Apple:

  • The Financial Times said Thursday that 100,000 people have accessed its web-based HTML5 app on iPads and iPhones, just a week after the newspaper announced it would bypass Apple’s store. That’s equal to nearly half its digital subscribers. The newspaper’s offering the service free for a week before requiring a subscription.
  • Facebook is reportedly close to launching a version of the service codenamed “Spartan” for the iPad using HTML5, enabling it to bypass the App Store completely.
  • Google’s Chrome Web Store launch in December included a Web-based New York Times app in HTML5. Since the New York Times recently started charging frequent online readers for its content, the newspaper now has its own app enabling it to bypass the App Store.
  • Google One Pass, launched in February, lets publishers sell their products directly through Google Checkout with just a 10-percent fee, undercutting Apple.
  • Amazon said last October that it would begin to allow users to access their Kindle newspaper and magazine subscriptions across Kindle apps on any device – giving publishers another way to bypass Apple. An Amazon spokesperson couldn’t be immediately reached to discuss the status of the program.

Since HTML5 is an emerging Web-browsing standard, Apple can’t simply ban it from its devices – as it has banned Flash, for example. Steve Jobs has also publicly thrown his support behind it.

HTML5 is the long-awaited revision of HTML4, the leading language for structuring and presenting content on the Web. You don’t need HTML5 to buy published content on Apple, Android, BlackBerry or Windows devices.

But if you’ve tried, you know how tricky and frustrating that process is for devices not optimized for web commerce – not to mention visually unappealing.

HTML5 vastly simplifies the process of porting content between platforms, lowers the cost for publishers, integrates graphically rich content such as video and music more tightly, and streamlines the overall presentation.

Apple devices aren’t about to lose their position as the leading digital publishing platforms. The iPad still dominates the tablet market, and many publishers like Conde Nast and Hearst are willing to pay the gatekeeper fees in order to gain access to Apple’s vast installed base.

In addition, Apple reportedly has negotiated individual deals with publishers to sell their content in the App Store for less than the 30-percent standard fee, although publishers refuse to acknowledge that publicly for fear of angering Apple.

An Apple spokesman declined comment.

Google One Pass isn’t much of a threat yet. Google’s tiny U.S. newspaper base includes outlets like the Southeast Missourian and the Blytheville Courier News. It’s done somewhat better abroad, where it’s launched in six countries. In Germany, it signed up several major magazines like Stern and Burda.

A Google spokesperson resolutely avoided comparing the service to Apple’s offerings, calling it simply part of the “drumbeat of technologies” enabling publishers to move their content to the Web.

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