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Tech Report: Apple Eases Rules On iPad, iPhone Subscriptions

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SAN FRANCISCO (KCBS/AP) _ Apple has made a change that could help newspaper and magazine publishers make more money when they sell subscriptions for the iPad and iPhone.

The looser rules make it easier for publishers to sell subscriptions on Apple Inc.’s hot-selling devices outside the company’s online store.

Apple’s original subscription policy dictated that publishers couldn’t undercut the prices offered within their iPad and iPhone applications. Apple said Thursday that rule will no longer apply.

KCBS’ Larry Magid Comments:

The greater flexibility is a victory for publishers because they have to share 30 percent of revenue from subscriptions sold through their apps. Now they can offer discounts elsewhere, such as through their websites, and still make more money.

“The winners aren’t just the publishers, but also consumers,” said KCBS Technology Analyst Larry Magid. “That’s because publishers will now be able to offer better terms. One of the other things Apple was insisting on is that the publishers not undercut Apple on pricing. Now they can charge whatever they want on the web, which means more competition, and theoretically, lower prices.”

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)

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