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Traditional publishers have known better days. The business models of the past are failing, and new ones that can take their place are, for many publishers, elusive.

But a few, like The Financial Times, are not just surviving, they're thriving. And increasingly, they're extending their success into new channels and onto new platforms.

In doing so, however, they're highlighting some major differences between the haves and the have nots in the publishing business. Take the iPad, for instance. Hailed by some as a publisher's new best friend, it's still unclear just how much iPad apps will help struggling publishers. Apple's new policy for subscription sales in iPad apps will only complicate matters.

While the less fortunate, like The New York Times, seem to believe they have little choice but to play by Apple's rules, The Financial Times may choose to play a different game altogether.

According to FT's Rob Grimshaw, "We don't want to lose our direct relationship with our subscribers. It's at the core of our business model." Yes, despite all of the promise (and hype) around the iPad as publishing platform, The Financial Times may opt out of in-app subscription sales if it's not satisfied with the outcome of negotiations it's apparently holding with Apple on the matter.

Although The Financial Times can afford to ditch iPad in-app subscription sales, there is a lot at stake; The Financial Times' iPad app is reportedly driving 10% of new digital subscriptions for ft.com.

This raises an interesting question: the FT believes that giving in to Apple will require giving up too much, should less fortunate publishers give in simply because they have less to lose? It's a difficult question to answer.

On one hand, it seems pretty clear that struggling publishers can't afford to ignore new distribution channels and platforms, such as the iPad. On the other hand, investing in a new channel or platform when it requires sharing ownership of subscriber relationships doesn't exactly seem like a recipe for instant success either. After all, the subscriber relationship is arguably a publisher's biggest asset.

From this perspective, publishers less fortunate than the Financial Times may still find that taking an FT-like approach to iPad subscriptions isn't such a bad idea.

As Grimshaw noted, "[there are] a large number of other channels available" to the FT -- and they're available to all other publishers. The iPad may be one of the most appealing new distribution platforms for publishers, but it's also pretty clear that it isn't going to single-handedly 'save' any of them either.

That means that publishers might do well to focus on finding viable business models using channels and platforms that they control fully before they attempt to grapple with issues around Apple's in-app subscription sales policy.

Patricio Robles

Published 5 April, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2377 more posts from this author

Comments (3)

Ashley Friedlein

Ashley Friedlein, Founder, Econsultancy & President, Centaur Marketing at Econsultancy, Centaur MarketingStaff

Good for the FT. Whilst I admire Apple's success and product design I fear they are becoming increasingly 'closed' and somewhat arrogant so it's good to see a strong brand like the FT stand up to them. I certainly wouldn't want to cede not only 30% of my revenue but, more importantly, my customer base to someone else.

A similar thing is happening with Facebook which undoubtedly wants to be come the 'Web OS', particularly as concerns user profiles/data, and, soon, commerce/transactions too I expect.

I think too many businesses are jumping on the 'easy' route ('outsource' to Apple, Facebook, LinkedIn etc.) because it is hard to compete but I do worry they might be sacrificing longer term value and control of their businesses.

over 5 years ago

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William King

In 2009 there was no competition at all with Apple for application store. But in 2010 Android and RIM jumps up with having close margins with each other but sill lacking behind from Apple. And now the graph is changing again. And Android market giving good competition to Apple, in application store specially. As users of Nokia and RIM can also download applications from Android. So Apple should be little soft to retain its customers, and should allow them extra features for free, once an application is downloaded.

over 5 years ago

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Kevin J. Lenard

What's not being talked about is the REALLY big picture in the entire news publishing world. We really don't need any more than a few competitive global news suppliers anymore. Local competitors (like the NYT vs. FT at a local NYC level) are totally redundant when we have CNN, BBC and Fox feeding us all of AP's and Reuters' reports via various screens. I made this point a few times over the last 4 years:

01/2010
"Tough to accept, but Toronto, for example, will soon no longer need the Globe & Mail, Star, Sun and National Post in addition to local news TV stations. In fact, all of Canada will not even need 3-4 major national papers and TV stations. It's time for all that redundancy to die off.

That proliferation belonged to a different, pre-wireless/e-reader world. Should you own shares in journalism schools, I'd sell now. Clark Kent (and all his unionized co-workers) won't find sufficient work in Metropolis to keep him in blue tights in this brave new world. Sadly, bankruptcy on a massive scale is the only way to effect large-scale change once business models break down."

Full post here: http://bit.ly/dULWuN

over 5 years ago

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