The other week, Apple announced that with the upcoming changes to iOS that it would also reverse some of its stringent requirements for in-app subscription handling. Specifically, Apple removed the requirement that all subscriptions available through Apple be the same price or less expensive than ones offered outside the application. It also now allows publishers to once again offer external subscriptions, even if they don’t offer them in-app as well.

This doesn’t come as much of a surprise to me, as I never really understood Apple’s reasoning for forcing subscription model changes. Asking publishers to change a successful multi-channel subscription model just wasn’t realistic, even for Apple. This to me is parallel to Apple’s initial requirement that all iPhone applications had to be natively built using Objective C. The company soon realized that while this approach would protect the application quality and user experience, that the trade-offs were too high in terms of limited developer adoption. They simply needed to open up additional options for building iPhone applications to ensure that there were compelling titles available to sell the hardware. 

Last week I spent a busy couple of days connecting with the publishing community at O’Reilly’s Tools of Change for Publishing Conference in New York. It’s been a few years since we’ve attended this show, but with our recent surge in publishing related projects, I felt it was a great venue to hear what others were doing and what emerging trends we should keep our eyes on.

The overwhelming message from the show was that “The book is not dead”. The format that’s been around for the past 500 years is not going anywhere. However, there are tons of new market opportunities around the book that publishers must begin experimenting with new business opportunities. What publishers need to keep in mind is their core focus and their business objectives. Technology providers are pushing publishers to quickly adopt new technology, in some cases, even before it is fully ready for mass adoption. A good example of this is the new draft specification for the ePub 3 standard that leverages rich elements based on HTML5 and CSS3. This standard does provide so much more for publishers, but there are significant limitations, as the functionalities of these technologies only really work in Safari or iBooks, which severely limits the publisher’s market. What publishers need to realize is that HTML5 is a continuum, that will roll out in progressive implementations and will take years for all features to be supported by all browsers. It’s a great direction but is still in its early days.

When Apple launched the iPad last year it was heralded as the device that would kill magazines and newspapers as we know them today. But now, a year later with nearly 14 million iPads on the market, there are still relatively few magazines available on the iPad and those that are available are seeing rapid declines in their numbers. The media darling of the iPad magazine world, Wired, saw a drop from 100,000 copies in June to just 23,000 in November, and the story is similar for Glamour, Vanity Fair, and Men’s Health.

For consumers, expectations form an iPad version of a magazine are high. According to a recent article in Advertising Age, consumers expect to see something unique and different on the iPad, something they wouldn’t get by picking up a paper copy of the magazine. Creating a unique experience means an added expense for publishers for a declining audience. However, a recent article in the NY Times stated that the most common reason that magazines on the iPad are given low ratings is for their cost. Readers don’t feel its right that they need to pay cover price for each issue, even if they already subscribe today to a print edition.

For publishers, there were a few hurdles in bringing titles online. For organizations accustomed to the typical model of offering single issues on the newsstand and subscriptions delivered directly to reader, the iPad introduced a new hybrid business model. From the early days Apple talked about adding support for subscriptions, but to-date this is still “in the works”. Recent signs point to Apple rolling this out by June 2011, along with a new iPad newspaper from Rupert Murdoch’s News Corp. called “The Daily”. Till now, publishers have been forced to sell individual issues for the iPad through the app store or push subscribers through and awkward re-direction to their own site to process subscriptions. Apple has now given publishers till June 30, 2011 to transition over to a model that uses the in-app purchase function for buying content, which means the app store will become the only distribution channel.

Over the last week, I’ve read a few different articles that I initially found surprising and alarming. The first article was a piece from Advertising Age that stated that magazine apps rank low on consumers’ wish lists. Shortly thereafter, I read a report that Simba Information released stating that about one-third of iPad owners haven’t used their device to read an e-book.

The two articles got me wondering. Why is this? Is the iPad not the viable publishing platform that it initially appeared to be?

In looking deeper into the topic, I found a number of articles and reports that portrayed very positive figures related to the business case of publishing on the iPad. As well as some information that suggested why the adoption rate of users has been relatively slow.

Since day one, the iPad’s games and entertainment content have been stealing the spotlight.  What’s was very interesting to learn is that books have now surpassed games to become the largest category of application in the Apps Store, representing 17.5% of all titles. Today, Games represent 14.6% of titles. There are now 45,542 books in the iTunes App Store vs. 38,033 Games. 

At the beginning of the year the market was buzzing about the upcoming slew of tablet announcements. Now, heading into the holiday season, nearly 11 months later, it’s interesting to see where things stand. Just looking at my favorite source of tablet news, Goodereader.com, there are pages of announcements and reviews of new devices in the last week alone.

When I wrote the original article back in January, the iPad was still just a rumor, lumped in with a bunch of other “in development” products. Now, in just the first two quarters of the year, the iPad has generated nearly $5 billion in new revenue for Apple. This number is continuing to grow as Apple rolls out the device to a broader global market this week and US-based AT&T and Verizon start selling it in the US.

Another project we mentioned back in January was the joint Microsoft/HP tablet, the Courier. It looked promising, but was killed off in April by HP due to power hungry Intel hardware and dissatisfaction with Windows 7 performance as a tablet OS. The new HP tablet, the Slate 500, was announced last week. It still features Windows 7 but opted for a more powerful Intel Atom processor and a slew of new features.

A new contender that was announced last month is the Blackberry Playbook. This is an interesting option for the business-oriented user as it leverages the familiar elements that Blackberry users appreciate. It has some added bells and whistles over other tablets (two cameras, ability to output 1080p video via standard connector, tethering with a Blackberry device), but it is likely to miss the holiday buying period, coming out instead in early 2011.