Consumer Confidential: Apple unveils subscriptions, retail sales lag, Delta's forever miles
--Apple's plans for media-world domination continue. The company is introducing a long-awaited subscription service for videos, music, magazines and, yes, newspapers. Users sign up through Apple's site, and Apple keeps 30% of the fees from participating media companies. According to Reuters, publishers can set the price and length of a subscription, but Apple will process all payments. In other words, customers who want to sign up for, say, Netflix would still be able to do so through the Netflix website, in which case Netflix would keep the full fee; or they could subscribe through the applications in their iPhone or iPad, which would cost Netflix nearly a third of its fees. It'll be interesting to see which avenue most digital consumers choose to take.
--Meanwhile, back in the non-digital world, retailers posted a seventh straight month of sales gains, although the results were less than some analysts had been expecting. According to the BBC, U.S. retail sales rose by 0.3%, less than analysts' expectations of a 0.6% increase, as extreme weather in large parts of the country kept some shoppers at home. On an annual basis, retail sales were up 7.8% from January 2010. The Commerce Department also revised December's increase down to 0.5%, from an initial estimate of 0.6%. Economists had been hoping that a cut in payroll taxes would result in stronger January sales, but consumers apparently chose to pocket their tax windfall, rather than go on a shopping spree.
--Airlines might be jacking up fees, but at least one is trying to be a bit friendlier when it comes to miles. Delta Air Lines has gotten rid of expirations for its SkyMiles program. Previously, miles expired after 24 months if there wasn't any qualifying mileage activity during that time, such as the earning or redeeming of miles. As of Jan. 1, SkyMiles won't expire for lack of activity. "We know how much customers value their miles, so eliminating mileage expiration is a major win for them," Jeff Robertson, vice president of Delta's SkyMiles division, told CNN. Delta says it's now the only major U.S. carrier whose mileage program doesn't peter out. Needless to say, if this results in more business, every other major carrier will be quick to follow suit.
-- David Lazarus
Photo: Apple is now offering subscriptions for digital downloads. Credit: Mike Segar / Reuters