Google: 1, Apple: 0
By Rick Aristotle Munarriz | More Articles
February 17, 2011 | Comments (1)
fool.com
A day after Apple's (Nasdaq: AAPL) controversial move to require a 30% bounty from publishers and tether them to pricing restrictions, Google (Nasdaq: GOOG) is out with a kinder mode.
Google's Eric Schmidt introduced Google One Pass in Berlin yesterday, offering publishers a flexible platform to manage paywalls in cyberspace.
Newspaper, magazine, and newsletter publishers will continue to host their own content. All they'll need to do is tack on a little Google code to be monetized through One Pass. Content creators can opt for metered access or full-blown subscriptions among the many customized options. Publishers will be free to dictate prices. More importantly, Google will reportedly only be taking a 10% cut -- a third of Apple's ransom.
Isn't 10% still greater than the 0% that publishers can earn on their own? Yes, but Google isn't simply taking a passive cut here.
As the name implies, the appeal of One Pass is that just one login will be able to access all of a reader's premium subscriptions across computers, tablets, and smartphones. Google is also managing the payments through Google Checkout -- a move that spares the publisher some of the fulfillment costs as well as helping Google's fledgling transactional platform gain ground on eBay's (Nasdaq: EBAY) PayPal juggernaut.
"Big deal," an Apple backer will argue. Apple is forcing publishers to not offer lower prices outside of its ecosystem, so it's not as if a newspaper can give One Pass subscribers a sweeter deal than it does through Apple's App Store.
However, Apple's cockiness underestimates a publisher's ability to steer the audience. If you run a popular trade publication with a digital presence through Apple and One Pass, what platform will you be promoting? If selling that $50 annual digital subscription means making $45 through Google or $35 through Apple, it's a no-brainer.
Publishers may not necessarily balk at Apple's Machiavellian terms if they still result in incremental sales, but the same can be said for One Pass or any other platforms that have achieved critical mass. Apple and Amazon.com's (Nasdaq: AMZN) Kindle take roughly a third of the subscription revenue because they have popular gadgetry, but publishers now have options on which ones they prefer. The incentives are now that much greater to promote Google, and Apple's ecosystem may not be the fortified garden it used to be. |
