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Google Undercuts Apple’s App Subscription Service

/ Source: TechNewsDaily

So much for all that Apple antitrust talk.

A day after Apple announced its new revenue-sharing structure that would force publishers charging subscriptions outside of the app to pay a 30 percent tax on subscriptions purchased from inside the App Store, Google has swooped in and launched a similar service ─ and it will cost publishers only 10 percent.

The launch of Google’s new service, One Pass — a platform for publishers to sell digital versions of newspapers and magazines — once again moves the heated battle between the two tech titans away from discussions of tablet specs toward a more service-oriented appeal for consumers.

One Pass is similar to Apple's subscription plan, allowing users to operate a single account to pay for multiple subscriptions to different publications. However, under Google's plan, publishers can charge for content in several ways, including subscriptions, metered access and sales of single articles. The major difference, however, is in the cost to publishers. Google will only take a 10 percent cut, compared to Apple’s 30 percent fee.

Wooing publishers

While Apple CEO Steve Jobs raised the ire of at least several publishers on Tuesday, striking a decidedly defensive tone in a release announcing the new tax when he said: "Our philosophy is simple: when Apple brings a new subscriber to the app, Apple earns a 30 percent share,” Google CEO Eric Schmidt yesterday appeared much more congenial toward potential partners.

“Our intention is to make no money on it,” said Schmidt at an event in Berlin. “We want the publishers to make all the money.”

Google will also provide publishers with the names and e-mail addresses of readers, while Apple has refused to share customers' details.

If this seems rather altruistic of the search giant, a closer look reveals there is something in it for them as well. Consumers must use the company’s payment system, Google Checkout, in order to use One Pass. And, after all, collecting data is what Google is all about. However, after saving 20 percent, that factor might not weigh too heavily on publishers’ minds.

Google has already partnered with four big European media groups, as well as Media General, Bonnier’s Popular Science, and Rust Communications.

Antitrust claims

The race to attract digital news subscribers comes as publishers continue to seek out new avenues to help boost circulation using tablets and smartphones.

While Apple’s first-mover advantage into the tablet space has been paying huge dividends, Google’s Android software is helping other tablet-makers take a bite out of the iPad’s overall market share in the slate computing space. Android devices ─ including Samsung’s Galaxy Tab, Dell Streak, Toshiba Folio, among many others ─ claimed an impressive 22 percent of sales in the fourth quarter, up from the 2.3 percent the previous quarter, according to a recent report, market researcher Strategy Analytics said.

And what this means, said Zachary Clayton, managing director at the Emerging Media Research Council, is that Google is doing a good job bringing the battle to the periphery — providing services like One Pass designed to undercut Apple while enticing more users to their platform.

And for this reason, publishers would be hard-pressed to prove an antitrust case against Apple, as several suggested following the announcement of Apple’s 30 percent tax.

“Google is not going to allow that to happen,” Clayton said, referring to Google’s ability to rein in Apple’s market share.

In any antitrust case, experts say, it must be determined if a company is a dominant player in the market. While a segment of the publishing industry may be unwilling to give 30 percent of their proceeds to Apple, Google not only provides an alternate service, but the thrust of Android slates into Apple’s once-overwhelming dominant position also means enough devices are in the hands of a larger portion of the tablet-owning public. Publishers would now likely have a difficult time claiming Apple’s iPad position was strong enough to restrict competition.


This article was provided by iPadNewsDaily, a sister site of TechNewsDaily.