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April 29, 2017

As Apple Uses Publishers, Publishers Can Better Use Apple

The FT move this week to make Apple just one other distribution channel should be a wake-up call for publishers of all kinds. When FT.com managing director Rob Grimshaw told me –“We don’t want to be seen as squaring off against Apple” — he means it (“The FT Declares Independence (from Apple) Day“). The FT would no more want to take on Apple than Google or Facebook. All supply lots of potential new customers to the FT. They pour new traffic into the wide top of the FT’s audience funnel. While the great majority read a linked story or two and are unlikely to ever become a paying customers, the FT is getting better and better at working the funnel’s sieve. We’ve focused on the number of paying FT digital subscribers, now up to 224,000. Consider, though, another important number: 3.5 million. That’s the number of registered FT users. That number is up about 40% year over year. That’s the prime group that the FT can induce to become paying customers. They are found in the middle of that FT funnel, and some will drop to the bottom line.

So the FT will continue to use the marvelous platform Apple has created, and others are adapting. In its web app approach, it is making a minor gamble that customers will find and use the FT just as effectively — and for as long session times — as they do with the iOS app. Currently, it is finding that just 15% of its new subscribers sign up through mobile devices, though most of those do come through Apple. If the FT finds its strategic jump is costing it business, it can readjust and quickly re-develop, and quickly, for iOS and other platforms.

For other publishers — those without the FT’s (and WSJ’s) substantial infrastructure (of authentication, e-commerce, customer and content management and platform development), the working relationship with Apple is more nuanced. (See my Thursday Nieman Lab post for more on “The Newsonomics of defense and offense.”)

Take the New York Times. The Times is in the midst of a critical year, climbing a hill of customer change, as it tries to convince one percent (or 300,000) of its unique visitors that the Times is worth paying for on digital devices. We’re only a half-year into the test — which I hear is going well, and on a successful ramp  — and that Times needs every new customer it can get. It has innovated new subscription-related marketing programs, such as its Lincoln “sponsorship,” which it recently updated (“Inside the NYT Lincoln Deal: It’s About Dollars, Traffic and Conversion“). Now, it plans to harvest as many new subscribers from Apple’s customer base, through the new Newsstand, as it can. That makes sense for the Times, and for others just building their digital subscription businesses.

In fact, I think the Times and other publishers have the ability to use Apple, just as Apple has smartly used publishers (and music labels and games creators) to build its hardware and app income business. Publishers can turn what may seem like a lemon of a deal — giving away the 30%, having restricted access to customers — to lemonade.

Here’s how: What consumers love about the internet is choice and flexibility.  That enduring quality provides publishers a couple of new marketing opportunities:

  • Publishers can tout through their own digital and print products that they offer the widest choice to consumers. While Apple offers only digital subscriptions — not print ones — and only iOS-based subscriptions, top publishers have smartly embraced the All-Access, “have it your way” approach, easy to grasp by consumers. It’s a “more is more” pitch. Customers want to access the news from four or five different devices, no problem. A publisher can provide that, as they have begun to do, at a single price. That compares to a single price for a single application bought through Apple. Further, newspapers can borrow a page from telephone/wireless customers – old “media” that have found a better transitional path forward than newspapers – and offer family plans. Why limit all-access to an individual? Multiply devices by the number of family members, and the simplified selling plans can be winners, as they have been for the telcos.
  • Inevitably, many consumers will buy subscriptions through Apple. That’s a good thing – and a lead list for newspaper companies. Let Apple sign up new subscribers, happily providing the 30% commission. Even if the publisher doesn’t get much customer data (about 50% are withholding it, given the Apple-offered opportunity to opt out), the publisher retains an enviable relationship to that reader. It’s called the daily product. Each day, readers get the news products, and they can receive “all-access” offers. To Rob Grimshaw’s point, these offers don’t need to be seen as anti-Apple offers. They simply offer readers more choice, and who could argue with that?

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