Apple vs. Google—Frienemies? | FirstRain

Apple vs. Google—Frienemies?

Sometimes you have to wonder, are Google and Apple friends or enemies? They compete to move an industry left behind, forward. Is that really competition or is it a concentrated, coordinated effort to bump everyone else out?

Apple and Google are now in full competition for the digital newsstand. First Apple has a new subscription model – and yesterday Google introduced the “One Pass,” a similar payment system for digital content. With both of these competing services, will just one come out on top?  Both are a big deal to the publishers and while the initial changes are small the long-term effect is disruptive.

Apple has now made electronic magazine and newspaper subscriptions part of the iTunes app store. Their newsstand will be similar to the iBook store, in hopes of attracting people deeper into the digital world.  The newsstand is already selling the digital versions of various major magazines and newspapers, and Apple has readied changes in iTunes so that I (the end customer) am able to use the app store billing system, all on my one credit card.

Google’s “One Pass” does the same thing for Android devices and beyond (accessible via web browsers). They will implement the familiar “Google Checkout” online payment service to users who wish to pay for content. One Pass is in a race with Apple’s newsstand to compete for users who buy digital media through mobile devices. An additional perk that Google offers however is more flexibility in payment options. As long as the user is signed into their Google account, they can purchase publications from any other participating website (whereas Apple’s has to be through iTunes).

Clearly Google is building flexibility in as a differentiator to Apple.  Apple is putting in draconian control and a whopping 30% revenue share. Any news service currently offering an app with a subscription must now either offer the app within the Apple store, or allow Apple to offer the same app for the same price or less.

In contrast, Google is allowing purchase of subscriptions, articles, or even day passes at a much more competitive revenue split of 10%.

With Apple at 30% and Google at 10%, are they together trying to become a monopoly in the digital newsstand industry? Will it be worth it to publishers to accept this reduction in revenue just to associate with the “cool” Apple brand – or will they be compelled to access the explosive number of Apple device users?  Either way, whoever ends up dominating the digital newsstand, this will revolutionize the news industry.

If done right, these two “frienemies” will drive many more readers to the new digital era of media. And these new digital copies of magazines and newspapers will be anything but ordinary– they are a great outlet for a new generation of creativity of media creation. Can’t wait!

Here is a survey by Josh Gordon, comparing readers’ preferences on digital magazines, versus traditional websites.