The Development of A Digital Newsstand

Apple has branched out into almost every area of media imaginable. Selling music, books, TV shows, games and apps of every kind, it’s no secret that Apple is very good at what they do. So what else are they looking to expand into now? News. It is reported that Apple has begun to produce a digital newsstand for newspapers and magazines. Apple has become the largest music outlet, as well as rapidly expanding their grasp on books, apps, and games. So is news the next industry that they will rap up? Also, is it a good idea for publishers to agree to the terms that Apple will set?

With the release of the iPad, and the number of books being sold via iTunes, news outlets are looking for the next big thing to get back on their feet. Obviously, newspaper subscriptions are way down right now. They are struggling to keep their current readers, and it is near impossible for them to get new subscriptions. By having a newsstand in iTunes, the average person is going to be much more likely to buy a paper when they want. Many people don’t want to have to pay for something that they don’t always read. Along with this, the number of subscriptions will also, most likely, rise. The price will be cheaper, as newspapers wont need to use ink or paper, lowering their costs. And with everyone concerned about the environment, this will be a much more green solution.

I believe that the biggest factor is the increased convenience of it all. People with subscriptions won’t even have to leave their couch to read all of the news going on. Even more convenient for people who don’t have subscriptions, all they would have to do is log in to their iTunes account and buy the article or whole newspaper that they need. They no longer have to go to the store or even surf the web to find an article that they are looking for.

There are a few downsides to this though. First, the ball is in Apple’s court. They will be the one’s setting and controlling negotiations between the publishers. This means that they will have the power to take a huge piece of the revenue generated, which will be in the neighborhood of thirty percent. Also, Apple may be given the power to provide their customers with the choice of whether or not they want the customers want their information passed on to the publishers, effectively giving Apple the power to control the relationship between the two.

By signing the deal for a digital newsstand, the publishers would be guaranteed a new, better, consistent cash flow of a new pool of customers. However, they would basically be left with nothing to do, as Apple would be the one who managed everything, as they already do with the music that they provide. So while it is a pretty much guaranteed cash flow, and the saving grace that they have been looking for, Apple is ultimately the one who will be making the most of this deal.

Article Link Below:

http://www.businessweek.com/technology/content/sep2010/tc20100921_422380.htm