Google and Apple go head-to-head over publishers

Google has developed a new payment system known as One Pass which enables publishers to charge readers for access to online articles.

One Pass provides online publishers with an easy-to-use payment mechanism, allowing them to set the price for subscriptions and micro-payments for individual articles or other online content.

Users with Google accounts only need to sign in once to pay for articles on sites using One Pass, which will appear on a variety of devices including personal computers, mobile phones and tablets.

Before users can view an article in full they will be directed to Google’s Checkout payment system, with the company planning to take a 10% share of all profits.

The news comes on the back of an announcement by Apple to allow subscriptions for buying newspapers and magazines on iPhone and iPad applications, with the company planning to take a 30% profit share.

The system enables publishers to sell subscriptions by the week, month, year or any other period of time instead of asking readers to purchase each edition separately.

According to Apple the subscription system will provide publishers with another opportunity to generate revenue from mobile devices.

Foad Fadaghi, research director of technology analyst firm Telsyte, says any new platform is good for publishers’ attempts to sell more content.

“The question is whether the platform will bring in new readers or whether it will just generally cannibalise its existing readership,” he says.

“However the smaller publishers might benefit because these kinds of platforms might expand their readership.”

Fadaghi says Google and Apple’s new systems run the risk of being viewed as a “digital tax”, which means publishers need to assess how much to align themselves with the systems.

“Each publisher has to assess it on a case-by-case basis but we’re saying publishers need to ensure they are on as many platforms as they can afford to be,” he says.

Fadgahi says he’s not surprised by Apple’s plan to take a 30% share of profits but he expects Google to increase its profit share of 10%.

“Publishers need to be conscious of this before they lock themselves into anything – they should assess how well it fits into their business model,” he says.

Apple chief executive Steve Jobs, who is on medical leave, said in a statement that the company is confident that its subscription service will prove popular with publishers throughout the world.

“(Publishers have) a brand new opportunity to expand digital access to their content onto the iPad, iPod Touch and iPhone, delighting both new and existing subscribers,” Jobs said.