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Publishers Chafe At Apple's Terms For 'Netflix For News' Subscription Service As It Demands a 50 Percent Revenue Cut (wsj.com)
Zorro shares a report from The Wall Street Journal: Apple's plan to create a subscription service for news is running into resistance from major publishers over the tech giant's proposed financial terms (Warning: source may be paywalled; alternative source), according to people familiar with the situation, complicating an initiative that is part of the company's efforts to offset slowing iPhone sales. In its pitch to some news organizations, the Cupertino, Calif., company has said it would keep about half of the subscription revenue from the service, the people said. The service, described by industry executives as a "Netflix for news," would allow users to read an unlimited amount of content from participating publishers for a monthly fee. It is expected to launch later this year as a paid tier of the Apple News app, the people said. The rest of the revenue would go into a pool that would be divided among publishers according to the amount of time users spend engaged with their articles, the people said. Representatives from Apple have told publishers that the subscription service could be priced at about $10 a month, similar to Apple's streaming music service, but the final price could change, some of the people said.
Another concern for some publishers is that they likely wouldn't get access to subscriber data, including credit-card information and email addresses, the people said. Credit-card information and email addresses are crucial for news organizations that seek to build their own customer databases and market their products to readers. Digital subscriptions are powering growth at big publishers including the Times, whose basic monthly subscription costs $15, the Post, which charges $10, and the Journal, which charges $39. Some of those companies are skeptical about giving up too much control to Apple, or cannibalizing their existing subscriptions to sign up lower-revenue Apple users, according to people familiar with the matter.
Another concern for some publishers is that they likely wouldn't get access to subscriber data, including credit-card information and email addresses, the people said. Credit-card information and email addresses are crucial for news organizations that seek to build their own customer databases and market their products to readers. Digital subscriptions are powering growth at big publishers including the Times, whose basic monthly subscription costs $15, the Post, which charges $10, and the Journal, which charges $39. Some of those companies are skeptical about giving up too much control to Apple, or cannibalizing their existing subscriptions to sign up lower-revenue Apple users, according to people familiar with the matter.
Apple's plan to create a subscription service for news is running into resistance from major publishers over the tech giant's proposed financial terms (Warning: source may be paywalled)
For some reason that just made me laugh.
I think 50% is absurdly high, as a percentage for Apple.
But on the other hand, m as a consumer I cannot imagine a price above $0 I would be willing to pay for a "Netflix of News". I already place so little value on a wide range of news I can get for free, what value could this service possibly have? The only thing I can maybe see people getting this would before a slight reduction in the price of a WSJ and NYT together, maybe enough people want to do that Apple's service will be viable.
But I doubt it... since Apple News today is already free and I hardly use it.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The Dutch outfit *The Correspondent* has developed a subscription news service -- no advertisers, no eyeball selling to third parties. They get 100% of their revenue from their readers. And they just finished a successful crowdfunding campaign to start up in the US.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Back in the paper days we used to collect this information and sell it to third parties unbeknownst to subscribers. Also, we don't recognize the irony in writing about Facebook and privacy.
Welcome to the city.
50% to set up shop. Protected by the city walls.
Free speech is a sin.
Curation of news can happen.
No Taiwan flag. No Tiananmen square.
Nothing that is offensive to a Communist party.
Domestic spying is now "Benign Information Gathering"
I foresee a future where people are paid to view news. This is completely reasonable since news stopped being about informing people and became more about pushing an agenda. So it's pay me to occupy my brain with your viewpoint. Like a billboard.
Requiem for the American Dream
If you are willing to pay for news, you want good news. The problem is that if you subscribe to the Wall Street Journal, then you aren't going to get good local coverage, unless you live in Washington.
The holy grail is to develop a business model that pays for good investigative journalism, and can cover local, national, and international stories. This is what Apple is proposing. A funding model where you get premium local content as well as premium national and international content.
I can only see two ways for this to happen:
a) For someone like Apple or Google to create a paid news service, or
b) For someone like the Wall Street Journal or the New York Times to purchase large numbers of papers, and become so large that they control all the news: local, national and international.
Interestingly, whoever creates the service will have huge market power in the news industry. Personally, I think (a) will be more democratic, because they will likely reward people with good stories with more money. However, it is really hard to tell how this will shake out. The only given is that the local papers are dying with no long-term revenue model. Something like this has to happen for the local papers to survive as quasi-independent outfits.
Don't get it. I can read all day. I subscribe to two major papers. Why pay Apple ?
This isn't about you. It is about Apple desperately trying to find a way to plug the iPhone profit gap. Sales for smartphones will continue to decline across all markets as the industry has simply matured and reached market saturation. For Apple that is a really serious problem, because wall street bankers demand ever increasing profits, and making a reliable multi-billion dollar bottom line year on year is not important to them (they have already capitalised that and pocketed their fees).
If Tim Cook and his board cannot continue to deliver next big thing profits, then the bankers will stuff the board with people who will push for short term profit seeking, and we will see Apple stripped of its biggest asset (loyal customers). This is generally how companies die once they lose a strong leader who can keep the wolfs at bay (with promises of even bigger profits if they don't raid the larder today). It happens every day in the private equity world. Welcome to vulture capitalism.
Another concern for some publishers is that they likely wouldn't get access to subscriber data, including credit-card information and email addresses
Boo-fucking-hoo