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Apple squeezes newspapers

Belgium is investigating whether Apple’s recent changes to its subscription policies for newspaper apps are an abuse of its dominant market position. Apple no longer allows newspapers to provide free digital versions to their print subscribers. This could possibly lead to a new antitrust affair.

This story seems to play only in Belgium and the Netherlands for now; readers from other countries may not know it. That’s why I wrote this special report.

Both articles I linked to are about Belgium, but I mostly read the Dutch newspapers’ wailing and gnashing of teeth, especially in my own newspaper, NRC Handelsblad. As far as I can tell the story is as follows:

In recent months just about all major newspapers over here created an iPad app that allowed their subscribers to download their daily newspaper for free — outside the app store. Non-subscribers had to go through the app store and pay a modest amount (€0.79 in the case of NRC) of which Apple took its customary 30%. This was hailed as the salvation of newspapers. Right.

(The clearest explanation of how the system actually works comes from Belgian newspaper De Tijd; in Dutch. Most other newspapers and blogs are very upset about absolutely everything but don’t tell you what is actually going on.)
But between the time I read the article and the time I checked the link De Tijd has gone to paywall subscription. Go figure.)

Last week or so Apple decided that from 1st of April on this will not be allowed: all downloads will have to go through the app store and free downloads will be forbidden. Thus subscribers to the dead-tree edition will have to pay again for the digital one.

Predictably there was an outcry. There were some strong-worded articles in NRC about the affair (that’s where I picked it up myself), and eventually the Belgian government started its enquiry. Possibly the Dutch government will join. Newspapers still have political clout; certainly enough to launch some sort of official response.

A probable next step would be escalation to European level, where the case would land with the department of Competition. It’s a pity that the redoutable Neelie Kroes, who fined Microsoft like others eat eggs for breakfast, doesn’t rule there any more, but maybe her successor will do something. And hey, she’s Commissioner for the Digital Agenda nowadays, and seems to have a broad view of the digital agenda. And she’s a Dutch politician, so her friends in the newspapers might already be talking to her.

I have very little sympathy for either party in the conflict. The newspapers ran lemming-like to yet another magic spell, while Apple showed it knows exactly how to milk its new distribution monopoly for all it’s worth — and how to fuck with the old distributors.

The newspapers didn’t analyse the app hype correctly: the app economy trends towards a web economy, and this sort of scheme isn’t going to work. Besides, they could have created a good mobile website, which would need a login/password failwhale in order to make money, but at least would have been platform-neutral and would have allowed them to retain at least a shred of their former distribution empire. But no, they went for whistles and bells and succumbed to Apple’s lure.

Apple once more shows itself an untrusworthy business partner that may change any rule at a whim. Besides, this is a narrow-minded money-grabbing move, or fear of losing control. In either case it’s not pretty.

And Google? It’s reportedly working on a digital newsstand, and might “undercut” Apple’s 30%. Not a word about free editions for paper subscribers, though. All your content are belong to us. The newspapers’ road to salvation does not run through the app stores. Despite all its problems, the web offers the better chance.

What’s next? I don’t know. The whole hoopla might dwindle to nothing in a few days. Or a new antitrust affair might surface. We’ll see.