Apple’s controversial new subscription policy

A little history, then talk about a current controversy swirling around Apple:

If you want to accuse journalists of having a bias, you might start with how they portray Apple and its successful line of computer and media player products.  A lot of journalists love Apple products, and by extension Apple itself, while a vocal minority actively dislikes the company and it’s cult-like following.

(Full disclosure – I’m a hard-core Mac and iPod user.  I also tend to be very suspicious of new Apple products.  That’s why I’m eagerly awaiting the iPad 2, having passed on the first version.)

There can be no doubt that Apple, under the leadership of Steve Jobs, has been very successful, coming to dominate the high-end computer market, the personal media device market, and tablet computing.  Oh, and it also makes a popular smartphone….

In addition to selling a lot of electronic boxes, Apple is also a leading supplier (or at least reseller) of content to go on those boxes.  Apple is the leading music retailer in the US, and it also sells a substantial portion of the legally downloaded movies and TV shows. (Oh, and Apple also sells a box that will stream pay-per-view movies and TV shows to your set.)

As I mentioned before, Apple is headed up by Steve Jobs, who was also the owner of the  CEO and chief stockholder in Pixar Animation before he sold it to Disney.  Upon selling the company, he became Disney’s largest single stockholder and an influential member of the media giant’s board of directors.

So…. All this leads up to this week’s controversy  surrounding Apple.

Apple’s popular iPad tablet has so far sold more than 15 million units.  There are several other significant tablets waiting in the wings, most notably from HP and the Blackberry folks, but none have really made an impact yet.  There are also a range of tablets running Google’s Android software, but none yet that run the version of Android known as “Honeycomb” that is specifically designed for tablet computing.

When the iPad was initially announced last year at about this time, the iPad was seen by some as the salvation of printed content such as newspapers and magazines, with some going so far as to call it the “Jesus Tablet.”

Since that time, the iPad has unquestionably been a success for Apple.  As for app-based publications that people can subscribe to the same way they do a newspaper or magazine?

Not so much.

For example, the initial tablet issue of Wired magazine sold more than 100,000 copies, more recent issues have been selling in the 30,000 copy range.  It is being argued by some that the fall-off is because the electronic editions don’t provide a compelling advantage over the print version.  Others say that the problem is that readers have to buy a full-price single copy at a time rather than being able to subscribe at a lower, annual rate.

This week, Apple finally announced its plan to sell subscriptions either through its iTunes app store or through in-app sales.  The policy allows publishes to sell subscriptions through their website with no kickback going to Apple.  But if they do so, they must also offer an in-app purchase option at the same price or lower, and that Apple will take 30 percent of the revenue from the in-app purchase.  Of even greater worry to publishers is that Apple will only share demographic data about the buyers to the publishers if the buyers check off a box saying that it is ok.

Apple, and some in the tech press, argues that there is nothing wrong with Apple’s policy.  Companies are still free to sell their content through their own web sites.  Apple is providing a service that many companies could not come close to providing for the amount that they will be paying Apple.

But many others, including folks who are generally positive about Apple, have been highly critical of the new policy, calling it a power grab, money grab, or act of hubris.  Some even suggest it could be the downfall of the company.  There are reports from the Wall Street Journal that the 30 percent charge could lead to an anti-trust investigation.

(Wired editor Chris Anderson would like to give the iPad edition of the magazine for free to print subscribers.)

I think the best overall analysis I’ve seen of the Apple subscription gambit comes from TechCrunch, under the headline Apple’s Big Subscription Bet: Brilliant, Brazen, Or Batsh*t Crazy? Rather than trying to score points, TC tries to get at what Apple was trying for and whether they’ll achieve it.

Apple competitor (and another new media giant) Google responded by offering publishers the opportunity to sell subscriptions through its Google One Pass service for just a 10 percent surcharge.

There is no question that Apple is a highly controlling company that is negotiating from a position of strength right now.  Are publishers going to go along with Apple, or will they rebel? I see critics comparing Apple’s rates with those charged by a credit card company or check cashing service.  What I would like so see is how much revenue magazines get from the companies that sell discounted subscriptions.  That’s the real question in my book.

Updates:

What do you think?  Leave your thoughts about Apple’s new subscription model in the comments.

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Link Ch. 11 – Finding success through mobile advertising

Advertising consultant Kathryn Koegel recently served as a judge of the GSMA Global Mobile Awards.  She writes for Advertising Age that she learned a lot about how mobile advertising is being done around the world.  What did she discover?  That folks are doing much more interesting and creative things using simpler tools than marketers are doing in the US.

The problem, Koegel says, is that in the US advertisers are obsessed with fancy iPhone apps that really don’t do much to promote the brand.  what she found globally was that companies could promote involvement using simple SMS text messages and creative approaches that led to publicly visible activity.

That doesn’t mean that apps aren’t a good idea, just that they need to accomplish something. She points to a Japanese campaign that uses the GPS and motion sensor in the iPhone to lead people to try to catch virtual butterflies by waving their phones about in public areas.  “Catching” the butterflies leads to delivery of coupons to participants.

Because things come in 10s, Koegel gives us 10 lessons to be learned from the competition that I found fascinating.  Well worth the read.

In closing, she talks about the winning mobile campaign from the competition – one that sells Cornetto ice cream in Turkey through the use of a video game projected on the wall of a building in Taskim, Turkey’s answer to Times Square.  People compete by controlling game characters on the side of the building using text messages from their phones.  If they complete the task, they win free ice cream to be collected on the spot.  Take a look at this video of the campaign.

What kind of mobile marketing could you think up?

Cornetto Ice Cream Wall Projection Mobile Game

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Deconstructing the Eminem / Chrysler Commercial

Although it was neither the most watched nor the most remembered, for me the 2-minute long Eminem / Chrysler / Detroit ad was by far the best of the Super Bowl commercials.  Why?  It told a compelling story in a format that really could only work during an event where people actually deliberately watch commercials.

But not everyone was enamored of this love-letter to Detroit as I was.  While I can’t say that I disagree with any of the points made by the following critics, I still really liked the ad.

Mother Jones – Chrysler’s Deplorable “Detroit” Super Bowl Ad

If you’re not familiar with it, Mother Jones is an aggressively  progressive magazine (and website) that wears its political heart on its sleeve.  And Mother Jones was not impressed with Chrysler’s “Imported from Detroit” ad. Adam Weinstein writes there:

“In case you missed it, Chrysler—a car corporation that’s better known for bailouts, buyouts, and management shuffles than reliable cars—somehow succeeded in winning hearts and minds last night with its two-minute Super Bowl ad buy, the longest and most expensive in the Big Game’s marketing history… “

Aside from the whole idea of the ad, what did Weinstein dislike?

  • Positioning Chrysler as an “urban core” brand using a tough, gritty image using “Detroit poverty porn.”
  • Chrysler is celebrating Detroit  while it has been busy closing plants in the area.
  • The fact that Chrysler is now heavily owned by Fiat, a European partner.

Lester Spence – From the DOGG to Eminem: Chyrsler then and now

Dr. Spence, an assistant professor of political science and Africana studies at Johns Hopkins, gives a somewhat more nuanced critique of the ad, noting that this was not Chrysler’s first foray into hip hop advertising.  Several years ago the auto maker used rapper Snoop Doggy Dogg to create a youthful and hip image for its cars.

Spence argues that the ad makes effective use a number of types of counterculture, anti-corporate material, including an “urban nationalist manifesto” of “ruin pornography” and a Diego Rivera mural that uses Marxist imagery.  All this rebellious imagery is subverted to promote a mainstream, corporate product.

He concludes his post by saying:

“I suspect that this commercial will ALWAYS move me, as I am and will always be a Detroit patriot. But given my work both on hip-hop and on urban politics, I cannot ignore the narratives this POWERFUL commercial shunts aside.”

Great stuff to think about.

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Link Ch. 2 – Are you watching this?

If you are not watching Al Jazeera English this Friday, you should be!  Also be following the #Egypt and #Jan25 hashtags on Twitter. There is even an “unstalling dictator” tweetmeme going around.

The #jan25 hashtag on Feb. 11.

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Return to Super Bowl Advertising

Here are a number of interesting followup articles on the success (or lack-thereof)  for the Sunday’s Super Bowl ads:

And finally, Dallas Maverick’s owner Mark Cuban on why nobody cared or complained about the Super Bowl not being available in 3D.

Up next – deconstructing the Eminem / Chrsyler ad.

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Fractured Fairy Tale Interval

Rumpelstiltskin as publicist from The Adventures of Rocky & Bullwinkle

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Another great national anthem

Here’s Straight, No Chaser doing the national anthem at Soldiers Field before the Packers/Bears game.  Another brilliant rendition:

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Super Bowl – The Day After

The nation’s most important day for television advertising has passed, a football game got played, and now the analysis begins.  Here’s a few thoughts on yesterday’s event:

In my mind, and many others, the one clearly best commercial of the evening was the Eminem/Chrysler tribute to Detroit.  It was a two-minute commercial that did everything a Super Bowl commercial should – It was great film, it grabbed people’s attention, and it said something unique and positive about the brand it was promoting.

In my mind, it was the best Super Bowl commercial I’ve seen since Apple’s 1984 commercial that introduced the Mac.  (We’ll talk some more later this week about these ads and why I think they were great.  Feel free to contribute to the dialog on this through the comments. Oh, and here’s a source of all the commercials that ran during yesterday’s game.)

Defining the worst commercial to me was equally easy.  There were plenty of offensive ads – Go Daddy denigrating women, beer ads denigrating women, the Doritos ad I didn’t see – but for me the Groupon ad featuring Timothy Hutton seemingly talking about the plight of people in Tibet but actually promoting Groupon restaurant discounts was the worst.

Why?

Because it is making light of  the persecution and murder of a people in order to sell a service.  It’s one thing to mock the green save-the-whales or save-the-rainforest movements, mocking murder is quite another.  Yes, I know Groupon is raising money for Tibet.  To me, it doesn’t matter. (Just look at the response to fashion maven Kenneth Cole’s joking tweet about the Egyptian riots.)

The broadcast started off with the controversy of Christina Aguilera botching the national anthem.  Color me not amazed.  Way too many pop stars have botched our anthem in one way or another over the years.  I was reminded this morning by my friend Charley Reed of the brilliant a cappella version sung by Huey Lewis & the News before the 1984 baseball all-star game.  Now that’s how you do it:

While the halftime show by the Black Eyed Peas attracted considerable debate over Twitter and Facebook, in that case the response was fairly evening divided.  Though, apparently, Hitler was not impressed. (Needless to say, NSFW language in subtitles….)

More tomorrow.

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Link Ch. 15 – Al Jazeera Arabic carrying video of police running over protesters

In my commentary and blogging course today, we were talking about how Al Jazeera English differs from what Americans are typically used to seeing on television.  One of my students said he watched AJE for about 15 minutes yesterday and was amazed at how graphic the footage was compared to the talking heads you typically see on American cable news.

Then the question came up as to how much more explicit Al Jazeera Arabic was than the network’s English-language channel.  I can’t speak to that, having not seen a lot from AJA, but I can show you the following.  This video, according to New York Times reporter Brian Stelter, AJA ran it at least 10 times in the last hour.  Be forewarned, this is graphic.  It shows an Egyptian police vehicle running over and apparently killing a protester in Cairo.

Interestingly enough, this video is now showing up on CNN in the United States, according to James Rainey of the LA Times.

A prime example of Truth #3 – Everything from the margin moves to the center.

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Different sources of news about Egypt

Want to see how different media outlets are covering the news out of Egypt?  Here’s your chance to compare and contrast for yourself:  Sounds like that could be a great media literacy assignment…. Suggestions of sources to add or potential assignments?  Leave a comment!

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