Businessweek iPad Edition Adds Pressure on Publishers to Take Apple's Sub Terms

Suscription-Only App Edition Runs Counter to Most Publishers' Strategy for Tablet

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Most magazine publishers have declined to accept Apple's terms for selling subscriptions to their iPad editions, limiting themselves and their readers to more expensive issue-by-issue sales instead, but Bloomberg Businessweek has just joined the growing pocket of takers with an iPad edition that's available only by subscription.

Readers probably won't mind. Even though they can't buy an individual issue, a one-month subscription only costs $2.99, well below the $4.99 cover price for a single copy in print. Existing print subscribers receive access to the iPad edition at no extra charge. "Our interest is in building long-term relationships with subscribers," said Paul Bascobert, president of Bloomberg Businessweek and head of business operations for the Bloomberg Media Group.

Most magazines have rebuffed Apple's subscription system so far because it keeps subscribers' personal information from publishers, which dearly want it for marketing and other purposes, unless subscribers specifically authorize Apple to share it. But every big magazine that accepts Apple's subscription terms puts pressure on its competitors to do the same. Bloomberg Businessweek rival Fortune only sells its iPad edition one $4.99 issue at a time, for example, but now faces much lower-priced competitor for business readers.

Even if many iPad subscribers decline to let Apple give their names and other information to Bloomberg Businessweek, the magazine believes it will be able to encourage many to share later on.

"It's always a concern when you don't know something about people consuming your product," Mr. Bascobert said. "However, if you look at the magazine business, we do that quite comfortably today on the newsstand. It's incumbent on the media business to build products people are willing to pay for and willing to share information for. We have some really interesting ideas about where this is going to go that will give them added value but will require them to tell us who they are."

Right now the app includes an archive, for example, where readers can store articles for future reference. Bloomberg Businessweek plans to eventually let readers access their archives from other devices too -- which will require readers to sign in. "For us to give you the personal archive on multiple devices, we need to know who you are so we can store that information in the cloud," said Oke Okaro, general manager and global head of Bloomberg mobile.

Bloomberg Businessweek's model also runs counter to many publishers' intention to bundle digital subscriptions with print subscriptions in an effort to collect more circulation revenue from readers. Sports Illustrated, for example, recently introduced an All Access package that delivers print, web and Android app editions for $48 a year, compared to $39 a year for print.

Sponsors of Bloomberg Businessweek's first iPad issue include NetApp, BASF, Goldman Sachs and Oppenheimer Funds.

Popular Science said last month that it had sold 10,0000 iPad edition subscriptions in less than six weeks. Elle and Nylon magazines also sell iPad subscriptions.

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