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Tue, Dec 08, 2009 - 12:59 AM EST  —  AAPL: 188.95 (-4.37, -2.26%)  |  NASDAQ: 2189.61 (-4.74, -0.22%)

Time Inc talking to Apple about magazines and tablets while mulling Hulu-like digital venture
Friday, October 02, 2009 - 04:02 PM EST

"Time Inc is leading an industry-wide joint venture to create a digital store for magazines as a way for publishers to avoid surrendering their digital future to the likes of Amazon.com or Apple," Kenneth Li reports for The Financial Times.

"The new service, as yet unnamed, would serve as a digital storefront for magazines, possibly newspapers and other publications and is expected to be announced in about a month," Li reports. "The launch is planned for next year, people familiar with the plan said."

"Time has held discussions with Conde Nast and Hearst about the venture. Time and Conde Nast declined to comment, and Hearst was not immediately reachable," Li reports. "The business would be structured like Hulu, a popular online video service formed by NBC Universal, News Corp and Walt Disney. Founding publishers are expected to take equity stakes in the new entity and the venture is expected to be financed by its partners. Details of the arrangement have not been finalised, these people said."

Li reports, "Publishers fear repeating the mistakes of the music industry, which delayed exploiting digital businesses until Apple created iTunes, now the world’s largest seller of digital music."

"Time has held separate conversations with Apple about placing its magazines, such as People, Sports Illustrated and Fortune, on Apple’s upcoming tablet device," Li reports. "It was unclear if or how the venture would work with other systems developed to address a need to charge consumers for content that has been given away for free online."

Full article here.

MacDailyNews Take: Hulu is strictly an ad-based setup, but Apple can offer that along with a few more things that nobody else can: Over 100 million active credit card accounts through iTunes Store and the ability to deliver in-app purchasing, something that just so happens to be perfect for magazine and newspaper subscriptions.

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Oct 02, 09 - 03:06 pm Comment from: anthony007

Seems like Apple is going to be VERY big in a few years. Does anyone think they could possibly break up the company into 2 or three parts at some point? This would result in greater shareholder I believe. For example, maybe a computer division, services division and phone. Eventually the law of big numbers will catch up with the stock and they will have to find other ways to return value to shareholders. Otherwise they risk turning into a Microsoft-like stock value.

Oct 02, 09 - 03:07 pm Comment from: blah blah blah...

it's all a matter of time when the tablet is released.

Oct 02, 09 - 03:13 pm Comment from: 84 Mac Guy

I for one would pay a monthly fee for news from a variety of sources daily and NO ads.

Oct 02, 09 - 03:19 pm Comment from: TowerTone

good news for dailies

Oct 02, 09 - 03:28 pm Comment from: iPhoner

Newspapers, magazines and authors need to study the App Store and realize that they need to drastically cut prices for digital delivery.

Amazon still wants you to pay $20 - $30 or more for a downloadable book? That's insane. Take it down to $4.99 and you'll have impulse buyers that will greatly exceed previous best sellers in quantities sold.

Another pet peeve:
Kindle Reader App won't let you subscribe to magazines when they
are the most likely format for the iPhone.

Oct 02, 09 - 03:32 pm Comment from: R2

"Publishers fear repeating the mistakes of the music industry, which delayed exploiting digital businesses until Apple created iTunes, now the world’s largest seller of digital music."

Oh they delayed it, did they? Had it all mapped out and just didn't execute the plan in time?

The publishing industry won't beat Apple or Amazon or any other company to "exploiting digital businesses" because they obviously don't know how to do it. Whatever Time cooks up will be the last dying gasp before Apple shows them how it's done.

Oct 02, 09 - 03:34 pm Comment from: TowerTone

Dead tree editions are a HUGE f'ing overhead.

Oct 02, 09 - 03:35 pm Comment from: theloniousMac

I currently use Zino for the delivery of electronic periodicals. I like it very much.

Oct 02, 09 - 03:38 pm Comment from: LordRobin

Dude, magazines are DEAD. The Internet beat magazines to death and whizzed on the body. If people wanted to pay for content, they'd pay for content, dead trees are not. The idea that moving everything online is somehow going to save the paid subscription model is a delusion.

------RM

Oct 02, 09 - 04:20 pm Comment from: eaDGbe

Does Li know something about Apple's tablet that we don't? Like that it exists? Like that Apple that has announced it? He casually throws out the line "...about placing its magazines...on Apple's upcoming tablet device" but forgot to add "...and that's a fact I just pulled out of my ass". Stand up, Finanicial Times, and accept the Shoddy Journalist of the Week award.

Oct 02, 09 - 04:24 pm Comment from: ZevFan

@LordRobin

I'm not so sure. If they go "micro," as in what it costs to subscribe, I can see some pretty large subscriber bases being created. Just as millions seem more than glad to plunk down 99 cents for a silly app, publishers could get millions to pay similar prices for quality reading IMO.

Oct 02, 09 - 04:51 pm Comment from: iPhoner

@Zevfan

Totally concur. I would pay a nominal amount for magazine subscriptions. Newspapers? Maybe not. The Internet has all the news in an instant.

Oct 02, 09 - 06:48 pm Comment from: TowerTone

"Newspapers? Maybe not. The Internet has all the news in an instant."

OK, let's be a little clear on something.
The internet does not report the news, local reporters do, then those stories are picked up by AP, networks, and the like.
That is passed on to the internet.

The local regional papers are going to have to come up with a business plan where they can go on gathering news without the overhead of print.

This can be sold via subscription and ads for local and regional content.

AP and Reuters will have to pay to redistribute, or they get nothing.

TINSTAAFL

Oct 02, 09 - 07:21 pm Comment from: silverhawk

Dan Brown's book "The Lost Symbol"
$29.99 at Barnes and Nobles.
$16.83 at Costco.
$24.99 on iTunes.
Why is a digital version so expensive?
Why does a digital version have to be so expensive?

Oct 02, 09 - 07:25 pm Comment from: mike

"Dude, magazines are DEAD. The Internet beat magazines to death and whizzed on the body. If people wanted to pay for content, they'd pay for content,"

Ha, that's very deep. By not paying for something, (software, music, movies) you will sound find yourself without it. Advertisers pick up the slack and then, oh, whats this? You're surprised when the Media panders to bug businesses? So not only do the Magazines have to work round the clock producing the actual content, the have to kiss bigtime ass to get twice the support from advertisers.

And now we're transitioning to an online ONLY scheme where hardly anyone clicks on advertising (if they did, don't you think Paul Thurrott or Dvorak would see some $ for all the troll bait they throw out?). I think you'll find that, Paul writes books and Dvorak writes for Marketwatch, etc.

On the other hand, if you're gonna ask the Corporations for money, for which there isn't much in return (clicks, maybe some sales, but infinitesimally small) you better believe they're gonna ask for... some 'testimonial' advertising... eg. kiss ass reporters glowing over the latest product launch, if not outright highlighting it sans-context.

Enjoy.

Oct 02, 09 - 08:11 pm Comment from: Cubert

For a couple of years I have been preaching about, and hoping for, a subscription digital media service from Apple. Pay one monthly fee and you get on-demand any movie, TV show, song, music video, podcast, and even games that were ever made - like dipping a ladle into a digital stream!

The only hitch would be live sporting events, but I could see Apple pricing their service cheap enough so that the cost of it plus basic cable would actually save people money.

Oct 02, 09 - 09:04 pm Comment from: Mister Snitch

"bug businesses?"

You mean.... Starship Troopers wasn't JUST a movie???

Oct 02, 09 - 10:44 pm Comment from: DogGone

Why do businesses fear Apple? It seems like major industries that peddle content seem obsessed with some outdated notion that they have to have absolute control over their products. They forget they do deals with cheap vendors like Walmart without batting an eyelid.

Oct 03, 09 - 01:07 am Comment from: Digits McGee

This is all about distribution. When content was restricted to physical media like books, papers, tapes and discs, the distributions channels were easily controlled and transfer points acted like toll booths. Revenue was exchanged at each hand-off. Digitalization of content made that infrastructure irrelevant. Now there are very few steps between producer and consumer. Apple put itself into the delivery stream and is now one of the strongest digital distributers on the planet. I can't see anyone in a position to knock Apple out of its current perch. Apple's going to make a lot of money for a long time to come.

Oct 03, 09 - 04:05 am Comment from: twilightmoon

If I were Apple, I'd tell these companies that are dragging their feet straight up, the terms you offer them up front to be there when the store opens will not be available later on if they drag their feet and or let other companies take the up front risks. Join now or pay later.

And the longer they jerk Apple around the worse the terms get.

Hold their feet to the fire.

Oct 03, 09 - 05:55 am Comment from: HD Boy

Some consumers want to graze for their news -- world news from The New York Times, local news from our local paper, tech and business news from the Wall Street Journal and maybe a photojournalistic report from Time Magazine or perhaps a breaking news report produced by a local newspaper or TV photographer. Like music, next generation content also needs to be available ala' carte, and not merely as a monthly subscription.

Oct 03, 09 - 06:01 am Comment from: HD Boy

My post above should close with this:

"...and not merely as a monthly subscription from a single source."

Oct 04, 09 - 02:43 am Comment from: SKY LARK

@Mister Snitch

Or mike is a Kiwi.

- "bug businesses?"

Oct 04, 09 - 08:28 am Comment from: Random Number Generator

This iTablet is looking increasingly like an enlarged version of the iPod touch—large enough to display newspaper and magazines without squinting and having to scroll, and with very fast page turn rate like you get with the printed page.
gulp

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