Publishers Want Wheel Reinvented

Michael Hedges February 9, 2011 Follow on Twitter

Newspaper publishers, almost universally, adore the tablet devices as wonderful new content distribution points. Access to the tablets – like Apple’s iPad – has, however, conditions. A crisis meeting is in order.

Imagine, if you will, a couple of neighbors inventing a new lawn tractor, perhaps solar powered or something trendy. The lawn tractors became popular among that fearless set of early adopters and the neighbor-inventors begin manufacturing them by the dozens in Chinese factories, selling them in franchised stores, mainly owned by telecoms. The neighbor-inventors - now manufacturers - were very protective of their lawn tractors, a marketing principle known to all MBAs.

Lawn tractors, as you know, require wheels, usually small ones. The neighbor-inventor-manufacturers recognized the importance of wheels but, frankly, any wheels would do, provided they fit on the lawn tractor. So the neighbor-inventor-manufacturers, who didn’t make wheels, decided that little wheel makers could sell their wheels but only under certain conditions and prices. And, too, the neighbor-inventor-manufacturers – now business geniuses – would take a percentage from every set of wheels sold.

This is all fairly normal business. But when it comes to Apple and the iPad, newspaper publishers see things differently. They are entitled, because they are newspaper publishers, to set conditions and prices as they see fit.

A crisis meeting for newspaper publishers – confidential and invitation-only – will be held in London next week (February 17) “inspired” by the International Newsmedia Marketing Association (INMA). The agenda is clear and simple; Apple will start enforcing app store conditions soon on content for their iPad. Those conditions were published last year but Apple has given developers several months leeway.

Newspaper publishers, like the music people before them, aren’t happy with Apple taking 30% from sales through iTunes, the only retail sales-point for the iPad, or in any other way placing conditions on sales, including bundling. The music people fought that battle and lost.  On its website, the INMA – “newspaper” was once in its name - says the “commercial agreement” with Apple “is now being revoked.”

Also on the newspaper publishers’ list of complaints against Apple’s app store conditions concerns data, specifically data about users. Apple intends to keep that data private, not sharing names and numbers with the newspaper publishers and, likely, anybody else. This just might be a legal issue, data privacy being a hot topic.

“The business model of newspapers is dependent on publishers and editors knowing their readers,” said the European Newspaper Publishers Association (ENPA) is a rallying statement (February 7).  “It is essential that this close connection is maintained. Without direct access to their subscribers, this vital bond between newspapers and readers would be broken, to the detriment of both.”

The German Association of Newspaper Publishers (BDZV) held an emergency meeting in Munich (February 1) to plot strategies. “Many newspapers have developed business models that would no longer be allowed,” said BDZV director Hans Joachim Fuhrmann to Focus (February 6). “It cannot be that Apple does not adhere to agreements.”

A “close” relationship between a business and its customer is, incontrovertibly, essential. Apple didn’t get to be the biggest brand in new media without understanding this very well. They did it, not by reinventing the wheel, but by reviving basic marketing.

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