A report claims that Apple is seeking half of all revenues from its planned news subscription service – and publishers are not happy.
Apple has an all-you-can-read subscription news service in the works, which would involve the bundling of content from across an array of publishers. The company is keen to boost its services business, considering the ongoing slowdown it has been seeing in hardware sales.
Publishers are wary
A report in The Wall Street Journal says that many news publishers are not pleased, with the company meeting resistance from some media outlets. People familiar with the situation say that Apple has said it would keep about half of the subscription revenue from the so-called ‘Netflix for news’ service it has planned.
The service comes from Apple’s 2018 acquisition of Texture, a service that provided digital subscribers full access to magazines as they appeared in print.
The newspaper wrote that some papers, including The New York Times and The Washington Post, are unhappy with the proposed terms that Apple would keep approximately half of the subscription fees, running at $10 per subscriber.
The other 50pc will essentially be left to the publishers to split depending on the amount of time spent and general engagement levels, similar to Spotify’s model for artists.
Prior to this venture, Apple had an iOS initiative known as Newsstand, which funnelled newspaper and magazine apps into a special folder. The company received a 30pc cut from publishers’ sales of recurring subscriptions, but Newsstand eventually ground to a halt over issues such as the revenue split, data-sharing practices and the visibility of certain apps in the folder.
Speaking on condition of anonymity, one publishing executive said the deal “seems greedy”.
Publishers are worried that Apple wants them to sign on for at least a year and many are trying to negotiate different deals. Another bone of contention is the apparent unwillingness of Apple to share subscriber data with publications, meaning media firms will not be in a position to leverage the information to optimise their services.
Could outlets lose out to Apple on revenue?
Many have pointed out that publishers already charge more than the proposed price for Apple’s service for a single publication, so the deal with the company could offer many outlets less than they make from their existing services in use today.
If outlets see more people subscribe to the bundled service, it could make a massive dent in the revenues of individual titles.
Jason Kint, CEO of Digital Content Next, told AdAge: “There is significant concern around how platforms are squeezing the oxygen out of the media ecosystem.”