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More problems with closed systems – newspapers warn Apple

Last week we had the news that Apple blocked Sony’s book application from the App Store and now today the BBC is running a story describing how newspaper publishers are complaining about Apple interfering with their business models.  They want to be able to offer free electronic versions of their papers to print subscribers and to allow people to subscribe from their own websites but Apple won’t let them, insisting that everything goes through iTunes and they get their 30% cut.

Once again Apple is leveraging the fact that they control the ecosystem from end to end to advance their own interests at the expense of their content partners and ultimately the consumers who buy their devices.  This is the danger with closed systems like the one Apple operates and why I hope and believe that more open models will come to dominate – probably led by Android, with Apple maybe following suit under competitive pressure.  At the moment Apple’s lead in device quality and market share allow them to get away with this sort of behaviour, but those leads will come under threat this year. I haven’t seen anything about the forthcoming iPad 2 which makes me doubt that prediction (we heard today Apple has started production of the iPad 2).

The irony of this story is that the newspaper industry has been hoping that the iPad will allow them to charge for content online and Apple will be their saviour.  I wonder where they are looking for hope now, particularly given that there is little indication that paywalls are working – see here for an analysis of the results released back in November by the Times in the UK and pause for a moment to wonder why they haven’t released any data since then.

As I have often said (including yesterday) I think the future for news lies in low cost journalism published only on the web and monetised via advertising and offline exploitations of the brand, e.g. conferences.  Good examples of this type of news company include Techcrunch, Huffington Post, and Resident Advisor here in the UK (a new one on me last week).

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  • GirlyGamer

    If the newspapers don’t want to pay Apple then don’t use their platform simple. They want to get their newspapers on the ipad/iphone because Apple has done such a great job in marketing them now the newspapers want to cash in on that marketing free off charge. Compared to the amount it costs to advertise in a newspaper the cost of going on the Apple platform is peanuts. It is the newspapers trying to use their position to get something for nothing.

  • http://www.theequitykicker.com brisbourne

    My fear is that if some content isn’t available on some devices and it is on others it will become a nightmare for consumers to understand and more difficult for companies to build audiences for their products.

  • http://twitter.com/thenext50k Evert Bopp

    It’s my main gripe with Apple. Their hardware is great, and probably superior to their competitors, but I have strong objections to their closed systems.
    There is something I find inherently objectionable to a company trying to control how I use a device that I have already paid for.
    It wouldn’t surprise me if this would lead to an eventual loss of market share.

  • http://www.theequitykicker.com brisbourne

    Totally agree

  • http://www.theequitykicker.com brisbourne

    That is the problem with it being Apple’s platform – at least in their minds. If it were an open platform, like the internet, or even just more open, like Amazon’s market place, it would be easier for everyone to do business and make money, including Apple (over the long run at least).

  • http://www.theequitykicker.com brisbourne

    Part of the reason Android is winning on mobile is because it is more open. On the desktop Apple is doing well because Windows is now such a disaster. I’ve just bought a Macbook for the first time.