["If you can look into the seeds of time, and say which grain will grow and which will not, speak then unto me." - William Shakespeare]
Need to Sell iPad Subscriptions ‘Was Obvious for Me,’ New CEO Says
Time Inc. on Thursday ended its long refusal to sell iPad subscriptions in the App Store, deciding that earlier concerns over
Apple’s power and policies weren’t worth the missed opportunity. In a Q&A with Ad Age, new Time Inc. CEO Laura Lang explained that the reversal wasn’t actually an about-face for her personally.
Here’s our interview, lightly edited.
Advertising Age: Why make this change now?
Laura Lang: This has been a priority for me. When I joined Time Inc., one of the things that was important to me was ensuring that our content is where consumers want to read it. The Apple newsstand is an important place where a lot of consumers are. And Apple is really becoming a good partner to publishers. We are confident we can deliver a experience for our readers that’s really good.
Ad Age: Are the concerns that had kept Time Inc. from selling iPad subscriptions — such as Apple’s control over pricing and the relationship with subscribers — still concerns? Or did you achieve a comfort level with the ecosystem Apple has been offering?
Ms. Lang: It’s hard for me to comment what the concerns were before I arrived. What I can say is that right now I’m very comfortable that we have a partnership with Apple that will give our readers a good experience and give Time Inc. as a publisher the opportunity to provide those experiences. So, yes, I’m comfortable.
Ad Age: Did this decision follow some study, consultation or re-examination? Were the Bain consultants that have been at Time Inc. involved at all? Or was it just clear to you from the outset?
Ms. Lang: The one thing I’m not going to talk about is Bain. But it was really clear to me. All you have to do is look at where people are reading, where consumers are and the fact that the tablet platform offers an opportunity to bring in new readers. So it was obvious for me. And in conversations with Apple it was clear that they would be a good partner.
Ad Age: If tablet readers continue to grow as quickly as they are, do you see publishers expanding their overall reach across print and tablets, or using it as a chance to manage the expensive print component down?
Ms. Lang: It’s hard for me to predict definitely what will happen. But one of the things we do focus on is making sure that we are bringing an engaged audience to our advertisers. As we better understand the engagement that our readers have on the tablet, that’s going to be an important place for our advertisers to be. We’re going to be working as all the data comes in to make sure we’re bringing that to advertisers in a way that makes sense.
By AMY CHOZICK
Time Inc., once the magazine industry’s most ardent opponent of selling subscriptions through Apple, will make all of its magazines available via Apple’s newsstand, the two companies said Wednesday.
Laura Lang, Time Inc.’s chief executive, and Eddy Cue, Apple’s senior vice president for Internet software and services, said in a phone interview that they had reached an agreement that would allow readers to subscribe to 20 Time Inc. magazines, including People, Sports Illustrated, InStyle and Entertainment Weekly, through the newsstand section of Apple’s App Store.
The move is a significant shift for Time Inc., the largest magazine publisher in the United States. Even as competitors like Condé Nast and Hearst quickly struck deals to sell subscriptions through Apple, Time Inc. approached the Apple newsstand with caution, chafing at some of the restrictions Apple wanted to impose.
Though it was one of the earliest publishers to introduce digital and tablet editions of its magazines, Time Inc. had until now sold only the app version of single issues of its magazines through Apple. Print subscribers could use an “authentication” process to gain access to iPad and tablet editions at no additional cost.
The deal is the first major initiative by Ms. Lang, who took over Time Inc. in January after serving as chief executive of the digital ad agency Digitas. She said the deal with Apple was a top priority.
“For a magazine or brand like People or Time, a tablet will become an increasingly important part of the experience,” Ms. Lang said. “Our goal is to offer content where our consumers want to read it.”
The agreement also signals an evolution for Apple, which has slowly backed away from some of its initial restrictions. Facing competition from Amazon, which sells magazine subscriptions for its Kindle, and Google, which has Android software, Apple has become a more agreeable partner, publishing executives have said.
Neither Apple nor Time Inc. would discuss the exact financial terms of the agreement, but Mr. Cue said Time Inc.’s heft did not influence them. “We offer the same terms to everyone no matter how big or how small,” he said.
The Apple newsstand currently sells more than 5,000 magazines and newspapers. The majority of the more than five million newsstand customers buy subscriptions rather than single issues, Mr. Cue said.
Adding magazines like People, Sports Illustrated and Time, three of the top five magazines over all in circulation revenue in 2011, was essential, he added.
The agreement also moves Apple further along in its strategy of expanding its App Store beyond popular games like Angry Birds and making it more of a destination for news, information and videos.
Last fall, when Apple’s newsstand began, publishers criticized the tech company for not releasing subscriber data, which publishers value because they can use it to customize ads and show advertisers who they are reaching. That friction has eased as Apple has offered readers the ability to “opt in” on sharing data with publishers.
Now, 66 percent of tablet users said they would share personal information in return for advertising that fits their needs, according to a survey from the Association of Magazine Media.
Another point of contention for Time Inc.’s parent company, Time Warner, was the control Apple wielded over pricing, and the 30 percent commission it demanded for magazine subscriptions bought through its App Store.
“The only deal we have not done is with Apple, and to cede to their demands to sell digital subscriptions,” Jeffrey L. Bewkes, chief executive of Time Warner, said in a Nov. 30 interview, just after announcing Ms. Lang’s appointment. “They want you to be subscribing to them, and the last time we looked they weren’t making the magazines,” Mr. Bewkes said of Apple.
A Time Warner spokesman, Gary Ginsberg, said in an e-mail: “We watched newsstand evolve over the last year and became satisfied they understand our customers and can meet our needs.”
Mr. Cue said Apple’s relationship with publishers evolved as the iPad became a more common way for people to read. “There was some controversy early on because it was something new and hadn’t been done before,” he said.
Subscribers to the print edition of Time Inc. magazines can now authenticate their print subscription or buy a subscription through a Web site and receive the magazine’s newsstand app at no additional charge.
Ms. Lang did not comment on Time Inc.’s previous stance toward Apple. “It’s hard for me to talk about what happened before, but when I joined this was a top priority because this is where our consumers are,” she said.
Like the rest of the print publishing business, Time Inc. has in recent years grappled with a decline in print advertising revenue and an uncertain transition to a digital future. Revenue has declined roughly 30 percent in the last five years, and advertising revenue in the first quarter of this year dropped by 5 percent, or $19 million.