A new report on Wednesday claims a number of publications have signed with Apple for their Apple News-based subscription news service, in spite of the 50/50 revenue split Apple is requiring.
Apple is reportedly aiming to keep half of all revenue received by publications selling subscriptions on the Cupertino firm’s rumored premium new service. While some industry analysts have bashed Apple over the 50/50 split required by the deal, it appears many publications see value in the deal.
A Wednesday report from Recode says “many” publishers have already signed deals to be included in the much-rumored news subscription service. The publishers see potential for growth by partnering with the iPhone maker.
Here’s the short answer, which I’ve cobbled together by talking to industry sources: Apple has already signed many publishers to deals where they’ll get 50 percent of the revenue Apple generates through subscriptions to its news service, which is currently called Texture and will be relaunched as a premium version of Apple News this spring.
And some publishers are happy to do it, because they think Apple will sign up many millions of people to the new service. And they’d rather have a smaller percentage of a bigger number than a bigger chunk of a smaller number.
“It’s the absolute dollars paid out that matters, not the percentage,” said one unidentified publishing executive.
While smaller publishers may be willing to share their revenue with Apple on such a dear scale, larger publishers continue to balk at signing for such a revenue split.
The New York Times and the Washington Post are two of the publishers that haven’t yet inked a deal with Apple for the service. Both publications have site paywalls and subscription offerings in place already. While The Wall Street Journal is also said to have similar concerns, its conversations with Apple have been described as “productive.”
The publications’ share of the $10 monthly fee paid to Apple would be much less than the fees the publications currently pay. The New York Times charges $15 per month, while The Washington Post’s tariff is $10 per month and The Wall Street Journal asks a hefty $39 per month.
It is feared current subscribers would cancel their direct subscriptions and they would switch over to the Cupertino firm’s much cheaper alternative. All three sites currently offer some of their content via the Apple News app, and offer subscriptions through the service, keeping 70% of subscription fees for the first year, while Apple takes 30%. Apple’s share drops to 15% in year two
In addition to the monetary concerns, publishers are rebelling at the idea of Apple controlling users’ email addresses and credit card information. That information is valuable to publishers, as they use it to create customer databases for marketing their products, and for sale to advertisers.
Apple is expected to unveil both its streaming TV service and its news service in a star-studded event on March 25.
