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New York Times CEO Explains Why Newspapers Shouldn’t Partner With Apple News

New York Times CEO Explains Why Newspapers Shouldn’t Partner With Apple News

New York Times CEO Mark Thompson in a Reuters interview published on Thursday offered a less than glowing view of Apple’s upcoming news subscription service, saying publishers shouldn’t rely too heavily on third-parties like Apple for their digital distribution, as they “risk losing control over their own product.”

“We tend to be quite leery about the idea of almost habituating people to find our journalism somewhere else,” he told Reuters in an interview on Thursday. “We’re also generically worried about our journalism being scrambled in a kind of Magimix (blender) with everyone else’s journalism.”

Thompson took over as NYT CEO in 2012, and since then, the publication has experienced a huge expansion of its digital distribution. In the interview, he warned publishers that they may suffer the same fate as television and film studios in their dealings with the Netflix video streaming service.

“If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix,” Thompson said in response to questions about any talks with Apple to participate in the iPhone maker’s new news service.

Although Thompson declined comment on any conversations NYT may have had with Apple about their news service, he compared the service to how Netflix made inroads into Hollywood to explain why the Time has avoided making any deals with digital distribution platforms where the paper had little control over relationships with their customers or its content.

“Even if Netflix offered you quite a lot of money. … Does it really make sense to help Netflix build a gigantic base of subscribers to the point where they could actually spend $9 billion a year making their own content and will pay me less and less for my library?” he asked.

Starting in 2007, film studios licensed their content to Netflix for their streaming service, which some say led to the studios’ demise. (Since then, Time Warner Inc. has been forced to sell itself to AT&T, while Media giant Rupert Murdoch has sold his 21st Century Fox film and television studios to Disney.)

Apple is expected to unveil its news subscription service on Monday, alongside a television streaming service.

Apple is expected to charge $10 per month for the new subscription service, offering access to a variety of newspaper and magazine content. It is believed that publications that sign on to the new service will pay Apple a 50% cut of the subscription fees from the service. While The Wall Street Journal has reportedly come to terms with Apple, other major publications, such as the Washington Post and Thompson’s New York Times, have demurred.

The New York Times charges $15 per month for its digital subscription, and Thompson says he has no plans to give up any of that revenue stream to participate on third-party platforms like Apple’s.

The Times generated over $700 million in digital revenue in 2018. The company has a target of $800 million in annual digital subscriptions by 2020. Digital ad revenue surpassed print ad revenue for the first time in the fourth quarter of 2018.

Apple is expected to unveil both a digital news service and a television streaming service at a March 25 event at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) from the Steve Jobs Theater on the Apple Park campus.

MacTrast will report on all the action on Monday, so stay tuned.