The battle of Apple and Google subscriptions

Two different models and two different philosophies, but which of the US giants will win out?

Some concerns have been raised by customer associations that Google would share too much personal information with the publishers. When IT PRO asked Google about this, its response was it only did it so that publishers can manage their relationships with customers.

"People using One Pass to purchase articles are always informed of the data being shared with publishers, and can choose not to receive marketing material from publishers," a spokesperson from Google claimed.

Immerse in a fastidious legal battle, attacked by an opponent that seems to have created a much better weapon, Apple has yet to respond. But is the war over?

Winners and losers?

The question is now who will end up winning this battle of the tech giants. Will it be the controversial subscription service that Apple who started from a more favorable position in its relations with the publishers has created? Or will it be Google One Pass, a patched version of Apple's bet?

Rob Bamforth, analyst at Quocirca, said it's hard to know yet.

"With the recent announcement (the new subscription system) Apple have upset a few people," Barmforth told IT PRO. "But this story is not about the margins, it is also about reach, and valuable reach, which is something Apple offers publishers."

But will publishers start leaving Apple? Bamforth doesn't believe there will be a massive migration. He set a graphic example: "Lots of vendors might be unhappy with a particular supermarket, about their margins or whatever, but everyone wants to be in Tesco if Tesco reaches a lot of people."

And love it or hate it, he said, Apple's App Store does reach a lot of people. Not just a lot, but also people who are willing to spend money. It's all about balancing margin and reach, both quantity and quality of reach, Bamforth insisted. If Apple continued to generate that reach, it would continue to be successful.

With the claim some have made that Google's 10 per cent is nothing but an early discount, Quocirca's analyst argued much of what Google has done in the past looked like it wouldn't be profitable, then turned out to generate large revenues. He doesn't, however, dismiss the possibility of that margin augmenting if things don't go well for Google.

The market is headed for change in the near future though. Bamforth told IT PRO there was going to be room for a wide variety of business models for selling apps and content online.

He argued that it will no longer be a Google-Apple dichotomy, but that differentiation will emerge. "Going back to food, premium markets and low cost supermarkets will coexist," he said.

He concluded the new situation was going to demand a proactive channel management in a competitive and differentiated environment, which might be a shock for the online world, but it's how things have been working offline for a very long time.

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