[Open vs Closed] Financial Times Introduces Web App in Effort to Bypass Apple

PARIS ??? The Financial Times on Tuesday introduced a mobile Web application aimed at luring readers away from Apple???s iTunes App Store, throwing down the gauntlet over new business conditions that Apple is set to impose on publishers who sell digital subscriptions via iTunes.

A number of publishers have expressed their displeasure with Apple???s plan to retain 30 percent of the revenue from subscriptions sold on iTunes, and to keep customer data from such sales, beginning at the end of June. At the same time, mobile applications are a fast-growing source of new readers and revenue, so publishers have been reluctant to pull their applications from the iTunes store.

The Financial Times, the British daily, has tried to get around this problem by designing a new app that includes much of the functionality of an iPad or iPhone application, while residing on the open Web. It employs a new Web technology standard called HTML5, which allows programmers to create a single application that can run on a variety of devices, including Apple???s iPhone and iPad, Google???s Android system and the BlackBerry PlayBook, although the new app does not work on some versions of the devices.

The Financial Times said it would encourage users of its iPad and iPhone applications to migrate to the new app. It said it did not plan to comply with Apple???s proposed conditions, even if that meant Apple removed the existing applications from iTunes.

???We don???t quite know what will happen,??? said Rob Grimshaw, managing director of FT.com. ???We???d love to keep our app in iTunes, but it may be that they will block our app at the end of the month.???

Mr. Grimshaw acknowledged that it was taking a risk, given that mobile customers, the large majority of them iPhone or iPad users, already account for 15 percent of The Financial Times???s digital subscriber growth. Over all, The Financial Times has 224,000 paying customers to its Web site and mobile applications.

At present, those subscriptions are sold as a single package, offering access via a mobile device or a desktop computer. Publishers say cross-platform subscriptions may become more difficult to offer if Apple goes ahead with its plan.

Under the proposal, Apple would keep 30 percent of revenue generated by subscriptions that originate via iTunes, including cross-platform packages, while publishers would continue to collect 100 percent of revenue from sales via their own sites.

Some publishers offer stripped-down, mobile versions of their sites, but these are often less sophisticated than their applications, making it more difficult to justify charging subscription fees for them. While The Financial Times is challenging Apple, a number of magazine publishers have struck agreements to sell subscriptions via iTunes, largely on Apple???s terms.

???If you???re depending on impulse download, the tablet experience and the ease of payment to get people to pay for your product where they never paid before, paying Apple 30 percent of something may be better than keeping 100 percent of nothing,??? wrote Benedict Evans, an analyst at Enders Analysis in London, in a blog posting.

Apple did not respond to a request for comment. On Monday, the company announced a new app called Newsstand, which will group digital newspapers and magazines together in a single place.

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