Google Digital Subscription Service Aims High By Shooting Lower Than Apple
posted Friday Feb 18, 2011 by Jon Wurm
Apple's new iTunes based subscription service barely made it off the tree before Google stepped in to try and steal their sunshine with their new digital subscription service called One Pass. The service will consist of the usual suspects, e-books, newspapers, and magazines but there are some distinct differences between One Pass and Apple's service that Google CEO Eric Schmidt made light of in Barcelona. A significant decrease in the cut Google takes from publishers and a less strict policy about relinquishing user info to them could help Google stick it to Apple in a different way than at the grocery store.
Satisfy your thirst for details by hitting the break.
Most would agree that a digital subscription service is a great idea. After all, sales of print publications have been down for years followed swiftly by shrinking profit margins for publishers. Now add on the convenience and efficiency that a readily available, digital platform provides and you might have yourself a solution. That is, unless your content providers can't afford it.
Apple is charging publishers 30% of their subscription price for use of their service. This is notably high even when you factor in the costs Apple will incur from their service, which will be minimal. For example, Apple already has the billing and distribution systems in place, all they have to do is make some minor additions and add content. Google, on the other hand, has announced a 10% fee that will cover their costs and give publishers a little more breathing room. Jaimee Steele, a spokeswoman for Rhapsody International Inc. seems to agree,
Google's proposed 10 percent fee is much closer to something we would find to be sustainable based on the margins that we're operating under.
It is not a shock that Google is taking a more relaxed approach about providing publishers with information about their subscribers than Apple. While publishers are excited to have access to the information, Google still walks that fine line between giving up the right amount of the right information. Apple recently announced that they will release information to publishers with user consent but that may not be enough.
Google CEO, Eric Schmidt sums up the purpose of One Pass stating,
You've got a very publisher-friendly approach; we basically don't make any money on this. The most important thing is to get the money to people who are producing high-quality content.
For the time being it does seem that One Pass is more practical and less self-serving than Apple's service and it will be interesting to see how things progress.
