More problems with closed systems – newspapers warn Apple

By February 9, 2011 7 Comments

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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