Apple 2.0

Covering the business that Steve Jobs built

Why digital newsstands stink

January 3, 2011: 5:24 AM ET

Who is to blame for declining sales of iPad magazines? Can Google do better?

Source: Le Monde Magazine

Much has changed in the eight months since Le Monde Magazine put Steve Jobs on the cover and asked whether he might be the new Gutenberg -- the man whose iPad would save the publishing industry from the menace of le tout-gratuit (the all-free).

For one thing we know that Apple (AAPL) has sold a lot of iPads -- somewhere in the order of 13 or 14 million in nine months.

We also know -- thanks to last week's Audit Bureau of Circulations numbers -- that iPad magazine sales have gone in the opposite direction. Wired's collapse from 100,000 iPad copies in June to 23,000 in November was most dramatic, but the story is not much different at Glamour, Vanity Fair, GQ or Men's Health.

Now comes the news -- via a page B1 story in Monday's Wall Street Journal -- that Google (GOOG) is talking to publishers about building a competing digital newsstand for Android devices that might offer them what Apple has thus far refused to share: The names and addresses of their online subscribers.

TechCrunch's MG Siegler sums up the situation with this headline: "The 'Digital Newsstand' Race Becomes: Who Is More Willing To Trick Users, Apple Or Google?"

The issue is whether the subscriber data that publishers want so desperately -- and which Steve Jobs has so far resisted giving them -- is "opt out" or "opt in." According to the Journal, Apple is ready to soften its stance in the iTunes newsstand it is rumored to be building. The key passage:

"Apple is planning to share more data about who downloads a publisher's app, information publishers can use for marketing purposes. According to people familiar with the matter, Apple would ask consumers who subscribe to an iPad version of a magazine or newspaper for permission to share personal information about them, like their name and email address, with the publisher.

"Some publishers remain unhappy with this arrangement because they think few customers would opt to share such data, according to these people."

According to the Journal, Google has been telling publishers that it would be willing to give them "certain personal data about app buyers to help with marketing related products or services."  Whether that would be opt-in or opt-out is unclear -- thus Siegler's question about tricking users.

If Google builds its Android newsstand -- and the Journal makes it clear that that's still a big if -- it might give publishers a little more leverage and break open the logjam in their hard bargaining with Apple.

Meanwhile, it's hard to know who is more to blame for the iPad's failure to deliver a Gutenberg-like publishing revolution -- the publishers who are charging $4.99 for iPad versions of magazines they give to subscribers for pennies or Le Monde's new Gutenberg, who guards the names (and credit card numbers) Apple has collected through iTunes like the Queen guards her crown jewels.

No one likes to see newspapers and magazines go under -- least of all the writers who depend on them to pay the rent. On the other hand, these same publishers for years hawked subscriptions through "sweepstakes" so misleading that 25 state attorneys general felt obliged to step in. (See Publishers Clearing House).

Who wants to get spammed by those guys?

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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