But publishers have not been privy to Cue’s warm and fuzzy side. To executives who have had dealings with him, Cue is known as an inflexible and unpredictable negotiator who frequently reverses and contradicts himself. When publishers told him they needed a direct relationship with buyers of their digital content for the purpose of renewing and upselling them other products, Cue, they said, verbally committed to terms one day, only to act a few days later as if the previous conversation never happened. One explanation: He was being overridden by Jobs in the interim, leading to the question of whether Cue is merely Jobs’s avatar, just as he was at that press conference for The Daily.
Further, after agreeing to a contractual framework between Apple and the publishers, he suddenly announced there was no need for a contract at all. Rather, he has said, publishers should merely use Apple’s own terms-of-service agreement, designed for software developers. Publishers told that Apple didn’t allow in-app subscription sales were baffled when exceptions were made for publications like The Wall Street Journal and The Economist.
“They just lie,” says one publishing executive. “It was an open subject of conversation. They don’t operate according to normal standards of conduct.”
What angers publishers the most is Apple’s refusal to acknowledge that, unlike the music and video businesses—where pricing was the issue—their model depends on maintaining customer relationships. Apple’s subscription model, introduced in February, allows them to do that, but grossly favors the store with its one-click-to-buy process. To Apple, in fact, the publishers seem to be just another software developer. At one point in a meeting about pricing, to the horror of a participant, Cue compared publishers’ content to Angry Birds.
Yet some still hope they can charm Cue, and by extension Apple, into submission—showing a perhaps willful ignorance of history wherein, under Cue, Apple came to dominate the music business, driving down selling prices with its 99-cent model. They take pains to see Apple’s point of view and speak, almost admiringly, of its single-minded focus on its customers. Perhaps, having hung so much hope on the tablet, publishers find it hard to let go of the idea that this relationship can work—especially as no serious competitor to the iPad has emerged. Publishers, it would seem, need Cue more than he needs them.