You could argue that iTunes is the new digital newsstand, and so it deserves a cut. True, it does deserve something, but let’s compare what Apple wants to take with what a real newsstand collects. Typically, magazine companies take as much as 75 percent of the cover price of a magazine sold at a newsstand, which shows who has the pricing power in that relationship. But that is on a per-issue basis. The newsstands are merely lead generators which get people to sample magazines and newspapers before a portion of those people convert to paying subscribers. The newsstands don’t get anything extra for helping to bring in a new subscriber, forget about an ongoing cut of the subscription fee. Of course there are services that deliver subscribers to publishers, but even they don’t get an ongoing cut of the subscription. It’s more of a lead-gen type deal.
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