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Apple is the most valuable technology company in the world (as of 2012), due to its array of desktop, laptop, and mobile products.
Its 2007 introduction of the iPhone sparked a global boom in smartphones; its 2010 introduction of the iPad led to a revolution in the once-stagnant tablet space. Its iPhone design defined smartphone style, and its vigorous defense of its design patents has led to such judgments as a $1 billion verdict against Samsung for patent violation in 2012. Apple entered the 7-inch tablet market in late 2012 with the iPad mini.
Most major national and many local, regional, and subject-based news organizations have developed iPhone and/or iPad apps for use on Apple’s iOS devices, more than 160 million of which have been sold. The Apple demographic — disproportionately young, tech-savvy, well-off, and willing to pay for digital content — has been very appealing to traditional news organizations.
Outside of iOS native apps, the success of Apple’s devices — and the mobile boom they sparked — have hugely increased the use of news organizations’ mobile websites. iOS has fostered a new ecosystem of news companies and outlets that exist primarily or entirely within apps. The most prominent of these so far has been News Corp.’s iPad-only newspaper, The Daily.
Apple has also emerged as a major player in the ebook market, through iBooks. Apple was sued along with five major book publishers by the U.S. government in 2012 for antitrust violations, based on allegations of collusion and price fixing over their “agency pricing” model that allows publishers to set their own retail prices for ebooks. Apple was also criticized in early 2011 for rejecting a Sony Reader ebook app, raising questions about the access Apple allows for other platforms.
Apple has been criticized for the control it maintains over its App Store; news organizations, like any other third-party developers, must have their apps approved by Apple before they can be distributed through Apple’s standard channel. (It is possible to distribute apps to jailbroken iPhones and iPads without Apple’s approval, but no mainstream news organization has done so.)
In one incident, Apple rejected an app submitted by Pulitzer Prize-winning editorial cartoonist Mark Fiore because it “ridicules public figures.” Apple reversed its decision after public blowback.
Apple also reserves the right to limit what it considers erotic or inappropriate material, a restriction that several German publications have run up against.
Since the App Store launched in 2008, Apple has taken a 30 percent cut of app sales. With most news applications being free and focused on mobile advertising revenue, that policy did not have a major impact on news organizations.
In 2011, Apple announced a new subscription policy that would allow companies to sell subscriptions to their news products within iPhone or iPad apps. Apple said it would take a similar 30 percent cut on that subscription revenue unless the subscription sale occurred outside the app, such as on a newspaper’s website. Several news organizations, particularly magazines, criticized the size of Apple’s cut and its restrictions on access to customer data, and Google followed with a rival plan that promised only a 10 percent take. Despite that, however, starting with The Daily, a number of media companies have started to sell their content under Apple’s in-app purchasing model.
One group does not have access to Apple’s payment mechanism: nonprofit groups looking to use the service for fundraising. Nonprofit news organizations, including some in public radio, have criticized this limitation as closing off a potentially fruitful source of donations to them.
The Texas Tribune is a nonprofit online news organization based in Austin, Texas, that focuses on political and civic issues. The site was founded in 2009 by venture capitalist John Thornton and former Texas Monthly editor Evan Smith. Thornton raised $4 million in startup funds for the site, including $1 million of his own money…