Apple 2.0

Covering the business that Steve Jobs built

Trouble in Apple's iBookstore

February 16, 2010: 4:24 PM ET

Negotiations with publishers reach an impasse over who controls subscriber lists

Jobs demos iBookstore. Photo: Michael Copeland

A report in Monday's Financial Times confirms early accounts of a sticking point that emerged during Steve Jobs' off-the-record meetings with the New York Times, Wall Street Journal and Time Inc. the week after the iPad was unveiled.

According to the FT, Apple's (AAPL) reluctance to share subscription information is "pretty damn close" to a dealbreaker for publishers who were hoping to ride the iPad's coattails back into the black.

"Jobs made it clear that he was not going to be soft on that," said one source who was not at the meetings but was well-briefed on what took place. "It was play the game his way or be left out."

Magazines and newspapers work hard to attract and hold on to each and every subscriber; the information they collect about subscriber reading and buying habits is one of their most valuable assets.

If future subscribers come to them through Apple's iBookstore, however, Apple will control that data.

"We must keep the relationship with our readers," says Sara Öhrvall, senior vice-president of research at Swedish publisher Bonnier told the FT. "That's the only way to make a good magazine."

Without subscriber lists, publishers might not even be able to distinguish readers who already pay for a print publication from those who only read it on the iPad.

Customers "will be really upset if we try to charge [them] again," said Öhrvall.

Despite misgivings, several publications are forging ahead with elaborate tablet-ready editions. The latest: Conde Nast's Wired, which demonstrated theirs at TED last week. See the video below:

See also:

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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