Digital Media, A New Frontline War Between Apple And Google

A few days ago the new magazine The Daily was unveiled, and among all the functionalities that users wanted to have, one was at the top of the list: an easy way to subscribe. Apple answered pretty quickly - just a few days later iTunes policies  shifted to receive subscriptions. Far to be outdone, today Google announced its own platform: Google One Pass.


The two new periodical options are quite interesting, but depending on if you are the final customer or the content creator you are going to prefer one to the other. With Apple’s platform the content creator is going to get 70% of the amount (Apple will get the other 30%), meanwhile with Google Open Pass the creator is going to get 90% of the amount and Google will get the rest (10%).


Why such a difference? Because of business model idiosyncrasies. Apple’s is based on iTunes where the profit is made directly from the transaction, and the subsequent cross-sell. On the other hand, Google’s model is based on search via its AdWord and AdSense products. All the products that Google creates aim to drive traffic to his search engine. That’s why they can afford to charge less to content creators.


Right now Apple has nothing to fear with its 130 million-plus iPhones, iPads and iPods sold, but it seems reasonable to think that  there is going to be a progressive shift from Apple’s platform to Google’s due to the exponential growth of Android Phones and Tablets. The war has just started - which side are you going to take?

By Sergi Herrero
Directeur général de L'Atelier BNP Paribas US