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Apple's (Nasdaq: AAPL ) plan to transform the publishing business, if it indeed has one, could involve allowing readers to purchase articles and book chapters as if they were songs available in the iTunes Store.
That's my take on an article first published in yesterday's edition of The Wall Street Journal that offers details and insight into the Mac maker's plan for its forthcoming tablet, due to be introduced at a press event on Jan. 27 in San Francisco.
The Journal cites anonymous sources familiar with Apple's thinking that say "Apple could change conventional payment structures" for downloadable content, and that the Mac maker is in talks with New York Times Co. (NYSE: NYT ) about selling through the iTunes store.
Interestingly, the Journal's findings jibe with an earlier report in New York magazine, which said New York Times Co. is no more than weeks away from announcing a pay-to-view scheme for stories and other content that appear on the Web.
Why this makes sense
Publishers need the help -- just like the music industry did when Apple CEO Steve Jobs came calling in 2003, iPod in hand.
Labels such as Warner Music (NYSE: WMG ) and Sony (NYSE: SNE ) haven't improved much since allowing iTunes to sell tracks individually, but piracy was killing the CD business long before iTunes became the world's largest music retailer. Now, producers and artists are earning a cut on every download.
News publishers such as Gannett (NYSE: GCI ) could do better because there's no golden goose to kill. Print is suffering, and Web content isn't much of a revenue driver for those not named News Corp. (Nasdaq: NWS ) . Anything that changes the equation is at least worth considering.
Why iSlate + iTunes might cause trouble
And yet one-off article purchases via a snazzy new device -- no matter how well designed -- isn't likely to be enough. The still-ailing state of music labels proves as much. Newspapers, magazines, and book publishers will have to change their business models to adjust to the new reality of consumers shopping for and buying content by the slice.
We don't yet know if publishers can do this profitably. News Corp. charges an annual subscription to most of the Journal's digital content. The Times seems to be entertaining something similar. Judging by News Corp. CEO Rupert Murdoch's bare-knuckles attack on Google's (Nasdaq: GOOG ) news aggregator, this is how publishing's entrenched interests prefer it.
But they may not have a choice. Consumers already single out content using social bookmarking services such as Digg and StumbleUpon, and using the trending topics on Twitter. Readers post about the articles and books they like, not the publications and authors they read. (By and large, anyway.)
Don't blame consumers for this, Fool. The Web has so much stuff that it absolutely requires filtering. It encourages content by the slice, because that's all we can consume. The publishers' problem is that, if given the choice, readers will pick and choose the tastiest morsels and avoid everything else.
Steve vs. Eric, get ready for Round 1
What's really fascinating to me as an investor in and observer of both Apple and Google is how the iSlate, if it adopts iTunes pricing for published works, could get a giant boost from The Big G.
We already have good evidence that Apple is interested in extending iTunes from the desktop to the cloud through its recent acquisition of Lala.com and its cheap, Web-based streaming service. A new Web populated by "buy this song on iTunes" buttons isn't difficult to imagine.
And if that isn't difficult to imagine, it also shouldn't be difficult to fathom these same buttons appearing at the bottom of articles and stories. "Buy and download to iSlate," they might read. You know who's going to index the content that has these buttons? Google. The Big G may be referring sales to Apple and its publishing partners.
Call it a classic case of Jobs Jujitsu, one I hope we get to see.
Is content by the slice more your style? Or do you prefer to subscribe to a newspaper or magazine? Make your voice heard using the comments box below.
Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy likes Mr. Pibb with its Red Vines.