Financial Times takes shot at Apple's subscription policy

Financial Times takes up the cudgel against Apple, saying no to parting with subscribers' data as part of Apple's new subscription policy, which requires that if a subscription is made using its App Store, then Apple would not share customer data with publishers.

Grimshaw, Managing Director of Financial Times in an interview with Reuters, said: We don't want to lose our direct relationship with our subscribers. It's at the core of our business model.

Apple initiated its new subscription policy with News Corp's iPad-centric newspaper, The Daily. The subscription method involves a revenue sharing model under which Apple takes 30 percent of the revenue if a user signs a subscription in-app. However, if the sign-up takes place outside the app, the publisher can keep 100 percent of the revenue.

Apple CEO Steve Jobs described the process as: Our philosophy is simple -- when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.

Customers who avail subscriptions through Apple App Store have the choice of providing the publisher with their name, email address and zip code when they subscribe,

Apple subscription service uses the App Store's billing system for apps and in-app purchases. Its in-app subscription system offers a one click system which makes the whole subscription process user-friendly.

FT along with WSJ is one of the few online newspapers that have an existing online subscription-based business model, which has eluded most of the online content providers who are dependent on advertisement revenue.

FT's stand would mean that it would be content selling subscriptions directly to customers rather than availing Apple's App Store infrastructure to get subscribers. Reuters reported that FT has about 210,000 online subscribers and has 400,000 subscribers for its print edition.

Thus FT has a lot to lose in terms of customer data based on which it gains advertisers. Smartphones and tablets are seen by online content providers as a viable means to extend their reach. The possibility of being able to deliver content through apps offers an opportunity to deliver content in new forms.

Thus, online content providers are targeting Android- and iOS-based devices and most of the online newspapers like USA Today and NY Times have apps listed on Apple Apps Store and Android Market. Online newspapers like Rupert Murdoch's The Daily aim at resuscitating the old packaged form of newspaper model, as apps allow them to bypass the web and directly reach customers through the apps store. It also offers immediate monetization.

However, FT can afford to take a stand against Apple as it already has a successful pay-wall model and is not in need to start the model from the scratch. Thus, it can afford to challenge the might of Apple which other online content providers cannot.