Controlling their customer data big challenge of iPad for magazine publishers

With the announcement today that Research in Motion (RIM) will be unveiling a tablet in November, the burgeoning of this form of delivery will further whet the appetites of magazine publishers, but...

One of the things that magazines particularly value and cultivate is their customer data. But the business model being pushed by Apple with its iPad and its iTunes store is such that magazines who participate, in order to deliver their magazines in iPad-friendly form, will lose control of their customers and wind up as virtual tenant farmers on iPad's land.The magazine's customers will belong to Apple.

For example, Time Inc. wanted to sell a Sports Illustrated subscription app on iTunes, and handle its own transactions. Apple rejected it.

As Peter Kafka of AllThingsDigital points out,

Subscriptions, whether they’re for ink-and-paper magazines or their digital editions, are a big deal for Time Inc. and every other magazine publisher. They value them in part because they provide recurring revenue, but primarily because they provide a treasure trove of data.

Unless a way can be found for magazine publishers to participate on the iPad and bill their customers directly (thereby retaining coherent subscriber data), there is trouble ahead. A compromise has to be found.