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Apple unveils magazine, newspaper subscription terms

Apple will take a 30% cut from sales of subscriptions — sold in the form of apps — for its mobile devices, including the iPad, iPod Touch and iPhone.

February 15, 2011|By Nathan Olivarez-Giles, Los Angeles Times

Apple Inc. announced the terms of its new subscription services, through its app store, for magazines and newspapers.

It's the same deal it has with News Corp. for that publisher's new digital news magazine, called the Daily, available only for the iPad tablet computer. Indeed, it's the same deal as for just about everything sold through Apple's app store or iTunes service.

The key figure is 30%. That's Apple cut from the sales, including for the subscriptions — sold in the form of apps — that it made available Tuesday for its mobile devices.

Publishers are free to set their own prices and the length of the subscription terms. Apple, based in Cupertino, processes the payments.

But Apple does not get an exclusive on selling the subscription apps for use on its devices. There is nothing in the deal to prevent publishers from selling the apps on their own sites or through other venues.

"Our philosophy is simple," Apple CEO Steve Jobs said in a statement issued Tuesday. "When Apple brings a new subscriber to the app, Apple earns a 30% share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing.

"All we require is that, if a publisher is making a subscription offer outside of the app, the same [or better] offer be made inside the app, so that customers can easily subscribe with one click right in the app."

Apple has previously offered magazines and other periodicals online, but only an issue at a time.

The company has sold more than 15 million iPads since the device debuted last April, as well as tens of millions of iPhones and iPod Touch players — all of which can be used to purchase and read books, magazines and newspapers.

"The advantage that Apple has here isn't just having a large install base of iPads and iPhones," said Yair Reiner, an analyst with Oppenheimer and Co. "It has a preexisting payment system that it's letting content companies tap into."

nathan.olivarezgiles@latimes.com

Times staff writer David Sarno contributed to this report.

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