Once bitten…

As a stand-off develops between Apple and publishers over access to subscriber data, could the love affair with the iPad begin to turn sour? By Steve Hemsley

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Magazine and newspaper publishers value every smidgen of data that improves the direct relationship they have with readers and advertisers. And now, early iPad adopters such as Dennis Publishing, which has an iPad app for MacUser, Future Publishing, which sells a tablet version of its technology title T3 and BBC Magazines with Good Food want more information on app subscribers.

Technology giant Apple is the main antagonist in this battle for knowledge because its iPad is so dominant. According to Strategy Analytics, it accounted for 75% of tablet shipments in the fourth quarter of 2010.

Currently, Apple asks subscribers if they want to provide the publisher with their name, email address and post code. But it will not share information on how readers consume the content they subscribe to – and won’t release credit card details despite billing customers on a recurring basis for the publisher’s product.

In fact, the power Apple currently holds means publishers are reluctant to talk about the on-going relationship and the sharing of data, while others will only comment off the record

Apple’s lock-down on customer data is painful for publishers because subscription fees are subsidised by advertising revenues that are ultimately driven by consumer insights. Without a direct relationship with app subscribers, newspaper and magazine brands are unable to track profile data such as demographics, usage patterns and preferences, including which articles interest which readers. This information is all the more valuable since media costs for iPad campaigns can be twice the production costs of an ad.

More detailed information would also help publishers market their entire digital package including websites, smartphone apps and tablet apps to consumers as a bundle.

As a result, publishers are having to think differently about tablet apps.

“Publishers must become cleverer at how they ask people to leave their information,” says Richard Walker, director of consumer revenues at Future Publishing. “All-access is the future because people have different devices at home. They might buy through iTunes initially, but if they are prepared to enter more details they could access content on other devices as well.”

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Future Publishing’s iPad version of T3

All Future Publishing’s digital magazines are available through online publishing technology company Zinio’s digital reading platform, but Future craves more in-depth reader engagement data. Within weeks it will launch an analytics solution with software provider Woodwing that builds hooks into its digital magazine architecture so publishers can analyse reader behaviour using web analytics.

“We are getting more digital subscribers from overseas so data is vital to ensure we can produce relevant content and possibly tailor magazines for specific territories,” says Walker.

The irritation publishers feel with Apple could ease as a plethora of new Android and Windows devices are launched this year, but for the moment, if publishers want to be in the iTunes store and reach Apple’s 160 million account holders they must play by its rules.

In fact, the power Apple currently holds means publishers are reluctant to talk about the on-going relationship and the sharing of data, while others will only comment off the record.

Last year Condè Nast UK predicted that 40% of its sales for issues of magazines such as Wired and Vogue could come from apps for the iPad and similar devices in future. Yet the company says the area of data capture is “not one we will be commenting on at this point”. The National Magazine Company also declined to comment.

The irritation publishers feel with Apple could ease as a plethora of new Android and Windows devices are launched this year

In Apple’s eyes it is simply protecting customer privacy. Farhan Mirza, a principal at management consultants AT Kearney, says Apple does not want to lose the positive connection it has with the public or hand over the direct relationship it has with app subscribers to publishers. But, he says, the fact Apple gives subscribers the option to share their personal details with publishers does not go far enough. “Most readers, given a preference and without knowledge of how data can improve the product, choose to decline,” says Mirza. “The choice to opt-in rather than to purposefully opt-out is counter to the way direct marketing has traditionally worked.”

Simon Morrissey, a partner at law firm Lewis Silkin and head of its technology department, agrees that Apple has changed the rules. “Channel partners are usually controlled to some extent by the content owners and have to tell publishers who they are selling any content to, so the publisher still holds the balance of power,” he says. “But in this case Apple is ruling the roost on many levels.”

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BBC Worldwide’s Good Food for iPad

Apple believes its subscription service provides publishers with an opportunity to expand digital access to their content, but declined to explain its approach to data collection and sharing. Spokesman Adam Howorth says: “We’re not doing interviews on this right now.”

Media lawyers remain intrigued as to why Apple is so keen to retain such detailed data on how people engage with publishers’ apps.

“Is Apple planning its own content service that means it needs this background intelligence, or is it considering repurposing the data?” asks Morrissey. “It could anonymise personal data to sell on to publishers’ competitors and brands that would pay big money for it.”

Apple may also be seeking to own and exploit subscriber data for the benefit of its developers, many of whom create apps for free and make money from advertising. Publishing experts suggest this was one reason for Apple’s $270m purchase of mobile ad network Quattro Wireless.

So how can publishers fight back? They can offer digital subscriptions on their own websites, though Apple insists the same subscription offer is made within the app to ensure it gets its 30% cut. Publishers could consider a different pricing model for users accessing content on an iPad, but this could be hard to manage if the user wants to access content from a PC or switches to another device, and could be something that Apple might quickly crack down on.

Perhaps the only solution is to consider diversifying to Apple’s rivals.

Google currently charges 10% of new subscriber revenues on its Android tablet and is creating a digital newsstand to get publishers on board. Google’s One Pass lets publishers set their own prices and terms for content and it is also more relaxed about sharing customer data.

Richard Lloyd, head of data at global B2B data and analysis company Information Arts, says publishers should welcome the fact other tablet makers are not following Apple’s lead on restricting access to data.

Publishers could consider a different pricing model for users accessing content on an iPad

“Google’s One Pass service provides customer information to the publisher unless the customer specifically opts out of doing this,” he says.

“There have also been notable examples of publishers such as the Financial Times suggesting that without access to customer data they will look for alternative platforms to run their digital products through.”

A spokesman for the FT, which uses its own payment technology and not Apple’s, says subscribers should be able to access its journalists’ content on any device with one login and one payment.

“Ideally a customer would buy one FT digital subscription through the iPad, FT.com or an Android app and have access to our content across all of them,” says a spokesman. “The ten free articles a month someone receives as a registered user would also follow them.”

Publishers that made their name in print are constantly adapting to evolving technology, but consumer data around app subscriptions is so valuable that the fight with Apple is one they cannot afford to give up.

Taking the tablets

Digital marketers cannot afford to ignore the growth in tablet and smart devices as global annual shipments are expected to hit 150m units by 2015, up from 14.2m in 2010.

This figure from industry analyst Ovum includes tablet computers such as the iPad and RIM’s Blackberry PlayBook as well as portable internet devices based on ’lite’ operating systems such as Google’s Android, the Blackberry Tablet OS and HP’s WebOS.

Ovum suggests that by 2015 Google’s Android and Chrome operating systems could push Apple’s iOS into second place. Last year Apple had a 90% share of this market but by 2015 this is forecast to fall to 35% with Google on 36%.

Ovum’s principal analyst Tony Cripps says the growth in tablet sales will be driven by consumers buying devices to complement their smartphones. “Apple and Google will attract the most attention and will have the most talked about applications and content, which is what consumers consider when making purchasing decisions,” says Cripps.

BBC magazines

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BBC Magazines is reluctant to debate Apple’s stance on data but says any information collected from tablet subscriptions is pure gold to the savvy digital marketer.

Jess Burney, subscriptions and database marketing director, says the company will soon offer digital-only subscriptions via tablets. She admits the whole issue around data collection is a challenge and the subject must be at the heart of any publisher’s marketing strategy.

“Selling single apps will never make as much money as signing customers into a long-term subscription package,” she says. “To be successful, publishers must work hard to collect data and to mine that data to see what the customer is doing and drive marketing campaigns and measure results.”

The company currently has apps for Good Food and for its science and technology title Focus.

In future, digital editions of BBC Magazines will give a much richer insight into customer behaviour. “We will get customer sign-ups via incentivised registration in the form of access to special offers, competitions or exclusive content. A publisher can also offer an initial free
subscription period in exchange for data.”

Data will also be available to BBC Magazines through products such as Google Analytics, which are embedded into apps. These provide publishers with behavioural insights around the user experience, including dwell times, clickthrough and repeat visits.

“If a publisher is to get real value from app data it needs to understand the conversion funnel. It must know how many customers download a free app or buy a single issue, how many go on to subscribe and how long they stay before they churn,” says Burney.

BBC Magazines offers print subscribers to Good Food and Focus an opportunity to access the apps for free. “Experience from other publishers suggests people will not pay for similar content twice, so using data to manage the customer journey around value and pricing and take a
single customer view across all platforms is very important.”

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