Why Paying Apple 30% Is One of the Greatest Bargains of All Time

Even the lowest remit is better than the old days

Just a few short years ago, magazine publishers were thrilled down to their toes to keep 18-40% of sales from news agencies.

When Don ran an online newsstand, 18% was the average new remit order for the 1,400 titles there. And some publishers earned absolutely nothing from sales from the agencies they dealt with.

In 2016, the same publishers complain bitterly about earning … 70% of sales from Apple. Newsstand is gone, but the app store is still a lively marketplace for magazine publishers.

Some people just don’t know when they’ve got it good. The “cost” of app publishing is pretty fair.

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Three reasons why Apple is the best offer you’ll probably ever get:

1. It’s incredibly generous. Compared to the bad old days, as I said, giving Apple 30% of each sale is highway robbery. And you’re the robber.
   
2. You’ve just been granted access to more than a billion tablets worldwide. Thank you, Steve. (BONUS: On the iPad, your magazine rides on the coattails of one of the most beloved brands in history.)
   
3. Unlike, say, manufacturing, where a product’s maker is lucky to get a few warranty cards that help it establish a relationship with buyers, Apple delivers plenty of data to publishers for long-term marketing purposes. (And what manufacturer on the planet gets to keep 70% of sales by a retailer?)

When was the last time a brand-new marketing channel opened up that can generate up to 20-30% of a publisher’s revenues in just the first 24 months of its existence, as tablet publishing has? Answer: Never.

Add to that the timeliness of the iPad’s arrival – when magazine publishers were practically jumping out of windows after looking at their revenue forecasts – and Mequoda firmly believes Apple has saved the world as we know it.

Bottom line: Take advantage of Apple’s generosity. And quit complaining.

One other thing, create a web magazine that’s responsive and works on any tablet, and sell the subscription yourself.

What’s the good word?

Of course you’ve noticed I keep tossing around “30%” and “70%.” As experienced magazine industry experts and publishers, the team at Mequoda knows the difference, and wants to more clearly define what we’re talking about here.

A lot of folks in the industry consider Apple to be taking a 30% commission, and that number is the focus of their ire. Yet, as I’ve noted, Apple is actually sending publishers 70% of every sale. No publisher pays any app store a 30% commission. So we prefer to call it a 70% remit rate – to describe the action that occurs when Apple sends your cut to you.

Part of Apple’s PR problem is they’ve allowed the conversation to circle around to the “30% commission” phrase – possibly because it’s similar to the way Apple worked with the music industry long before digital magazines were invented. In any case, Mequoda is sticking to remit because it’s accurate. Maybe Apple will get with the program one of these days, too, and stand up for itself.

In the meantime, we also know there are still newsstands out there, like Zinio, Kindle Newsstand and the Newsstand on Google Play, so let’s put it all into perspective.

What you can expect from digital newsstand partners

As most of you know, the four players for digital magazine apps are Apple and iPads, Amazon and its Kindle devices, Google Play on Android devices, and Zinio. We don’t exactly expect anybody to be reading magazines on their Apple Watches anytime soon.

Which digital newsstand should you use? All of the  newsstands will negotiate their remit rates (Apple is no longer a newsstand and does not negotiate). For these, I’m reporting on the best remit rates we’ve seen around the industry, in order of how large their marketplace is.

Apple App Store

• Remit rate: 70%
• Negotiable: No
• Device: iPad

Notes: Many publishers have created apps, due to the official “newsstand” going the way of the Dodo bird. But Apple allows publishers to sell subscriptions on their own websites, even if Apple is also selling those subscriptions, and takes no cut – as long as the website contains content, and isn’t a rival commercial website.

Zinio

• Remit rate: 85%/35%
• Negotiable: Yes
• Device: All major ones

Amazon Newsstand

• Remit rate: 65%
• Negotiable: Yes
• Device: Kindle

Google Play Newsstand

• Remit rate: 60%
• Negotiable: Yes
• Device: Android smartphones & tablets, Android TV

Notes: Zinio, the oldest digital newsstand operation, handles all conversions to digital format for publishers. It also has the most complicated arrangements, and will even handle fulfillment for publishers who want to sell their digital magazines off their own website. It has the best remit rate if you sell your magazine through your own site (85%) but drops to 35% when sold through their platform.

Zinio also launched its Netflix-style program, Z-Pass, which costs $5 per month for six magazines, which the user can swap out as desired. It hasn’t been around long enough to have generated any meaningful data for interested publishers, but I’d love to hear from you in the comments if you’re part of the program.

As you can see, the remit rates for all of them are still light years head of the old print remit rates.

Bottom line? With these generous offers, and knowing that magazine readers are increasingly interested in digital editions, a publisher has no excuse for not being available digitally.

Are you there yet? If not, why not? Let’s chat in the comments.

This article was original published in 2013 and is continually updated.