Publishers, among others, have been told they can no longer sell products that might compete with other online retailers.
Apple is concerned about the selling of books and magazine subscriptions for example, which can be done through an app but by-passing the iTunes store; therefore denying Apple its 30 per cent commission.
Apple claims to be enforcing its rule that says any offer that is outside its walled garden must also be offered through an approved app-purchase. This sort of behaviour should not come as a surprise.
Apple has not built the iTunes store for you. It has built it for itself. Its leadership will not last forever.
Its challenge is to stay there for as long as possible.
The only way IT companies really know how to do this is by creating products and services that are locked down; meaning you can only use, say iTunes in this case, to get what you want in the way that you want it. Apple appears to be beginning that lock-down process. It knows the clock is ticking to the time when Google’s Android phones and app market will be strong competitors.
The European Newspaper Publishers’ Association, and the US-based International Newsmedia Marketers’ Association, have started their campaigns of complaint but I cannot see Apple being too concerned.
It does not toss and turn at night worrying about the plight of publishers.
There are a couple of takeaways from this:
Firstly, initial response and take-up of iPhone and iPad apps suggest that such technology is not a quick fix for the economic challenges of newspaper publishers – it will be very much part of our fabric in the long run.
Secondly, any publisher that has staked its strategy on Apple has got it wrong.
At a recent international ICT expo in Los Angeles, delegates could count – if they had the inclination – some 200 different tablet computers.
So, at the risk of getting the future completely wrong (an odds-on chance), here’s a bit of crystal ball gazing for the next three or four years:
- Tablets will become as common as mobile phones in our market places;
This creates major opportunities for publishers but adds stress to the printed products.
- A tipping point will come when telcos offer data plans with pricing for tablets greatly reduced;
Telcos will do this when the volume and choice of tablets has primed the market.
- Google will begin to dominate and its app store will build to compete with Apple.
- As the Android market grows, so will iTunes begin to diminish in its importance and music will be its enduring niche.
- Apple will see history repeat itself; just as it did after the Windows95 launch, its market share will slide.
- Microsoft will grab decent market share, too, because it will be better positioned to extend its relationships in the corporate market.
- Devices such as the Kindle (Amazon) and Nook (Barnes & Noble) will capture the book sector as book readers will care of the physiological impact of back-lit screens.
Where publishers will fit in such a scenario is difficult to say. Some will focus on cost containment and cost-cutting of existing businesses. If they think there is a future in only that death-spiral of an activity, they will not be in the game.
• Mark Hollands is chief executive of Newspaper Publishers Australia (PANPA), www.panpa.org.au