Apple’s greedy terms for new service reportedly spook publishers

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Apple News
Apple wants a giant piece of publishers’ action
Photo: Ste Smith/Cult of Mac

Apple is reportedly taking a hard line with publishers during its negotiations for a proposed news subscription service.

Aiming to become the “Netflix of news,” Apple’s as-yet-unannounced service would give customers unlimited access to articles from popular publishers for just $10 per month. However, news organizations are reportedly balking at Apple’s proposed revenue split, which sounds downright greedy.

Publishers would split revenue 50/50 with Apple under the current proposal, according to reports from both The Wall Street Journal and Ad Age. Revenue would be divvied up to publishers based on the amount of time users spent engaged on their articles.

Apple currently splits revenue with iOS and macOS developers 30/70, with developers getting the larger portion. When it comes to subscriptions sold through the App Store, Apple keeps 30 percent of the price the first year. It only takes 15 percent every year after that, though.

Apple’s tough news negotiations

Another sticking point is Apple’s supposed refusal to provide email addresses and credit card info to publishers. News orgs like The New York Times, The Washington Post and The Wall Street Journal busily built their own subscription services in recent years. And all of their subscription options cost more than $10 per month.

“It feels like a punch in the nose, to hear those [revenue-sharing] numbers,” said Jason Kint, CEO of Digital Content Next, in an interview with Ad Age. “There is significant concern around how platforms are squeezing the oxygen out of the media ecosystem. We’ve appreciated Apple’s thoughtfulness and leadership on a number publisher concerns over the last year. It would be good to see them take some actual leadership on the economics of the industry and recognize the value of the news and entertainment they help distribute.”

New subscription services from Apple

Apple will supposedly package the news subscription service inside its increasingly popular Apple News app. With 90 million current Apple News users, the company promises publishers a wave of new readers and subscribers. Many publishers seem doubtful of Apple’s ability to deliver, however.

Apple’s subscription news service will reportedly launch in 2019. That’s if negotiations go well.

Apple is also working on a streaming TV service, a video game subscription service and a magazine subscription service to boost its increasingly important alternative revenue stream. Cupertino could package some of those services for one monthly fee.