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June 9th, 2011
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Financial Times To Steve Jobs: Your Sour Apple (06.09.11)


Financial Times says Apple's new App is a bullying tactic to gouge publishers

London, UK -- Rob Grimshaw, managing director of the Financial Times website, has said the paper is in a "Mexican standoff" with Apple but does not need a deal with the technology giant to make its digital strategy work.

The Financial Times upped the ante in its standoff with Apple – which is trying to keep 30 percent\ of subscription revenues and retaining key customer information for digital publications bought through its app store – by launching an app that readers can download without having to go to the iTunes store. The move came the day after Apple co-founder Steve Jobs unveiled details of the company's new Newsstand service for digital newspaper and magazine products, which will form a new section of the App Store.

Grimshaw said accepting the technology company's print app subscription terms would be a "backward step."

He added that the FT had made a "hard-headed, pragmatic business decision" to draw a line in the sand and not cave-in to the company's demands.

"It would be a backward step for us to go into relationships where we are denied access directly to readers, the existing business has been driven by that," Grimshaw said. "We are also wary what we pay to third parties. With the existing model we don't pay anything, now while I don't rule it out -- giving away a third of the revenue is not right."

The FT has managed to build up a subscriber base of more than 200,000 online digital subscribers and Grimshaw does not believe it is critical to do a deal with Apple to get a paid-for app on the iPhone and iPad.

He added that the FT had analysed data and noted that it gets more than half of its mobile traffic from people using the internet browser on their smartphone or tablet – not from using specifically tailored apps. "Users are turning the browser itself into a channel," he said.

Apple, like Google, has often used its market-leading position to dictate terms of deals to media companies and developers.

Grimshaw said that while Apple could easily afford not to do a deal, the FT's new HTML5-based app was not developed just to take on the California-based company.

"We have continued discussions with Apple all the way through the period [of development], we have a relationship and we don't want to throw it all away," he said. This is just about the terms we want to put in place. Their terms don't work for us. They won't move, we hope they will. It is a bit of a Mexican standoff."

Grimshaw added that the new app launched was a "big strategic play for us" and something that "goes wider than Apple."

Trouble has been brewing between the FT and Apple since February when Marjorie Scardino, the chief executive of parent company Pearson, made the point that publishers should not have to kowtow to Apple.

"The important thing to remember is there are many, many tablets coming out and multiple devices ... [from] Kindle to mobiles," she said at the time. "If indeed Apple are not happy to give us customer data then maybe we will get it somewhere else."-The Guardian 

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