The Wall Street Journal reported on Tuesday that Apple, which is preparing to introduce a subscription news service, is asking publishers to give the company 50 percent of any revenues that they generate.
Apple’s plan to create a subscription service for news is resisted from major publishers because of the tech giant’s proposed financial terms. People familiar with the situation are of the opinion that complicating an initiative that is part of the company’s efforts is probably made due to the offset slowing of iPhone sales.
Apple’s News Subscription Deal
In its pitch to some news organizations, representatives at Apple expressed that the company would keep about half of the subscription revenue from the service. Industry executives described this service as a “Netflix for news”. This service is going to allow users to read unlimited content published by participating in published for a monthly fee. It is expected to launch later this year as a paid tier of the Apple News app, the people said.
After giving up half their revenues, the remainder will be distributed among publishers on the basis of how many readers engage with their stories.
How Does Apple Benefit?
It’s easy to see why Apple favors the scheme. One of the main reason being, it will get a whole lot of new revenue at that time when iPhone sales are declining and when selling additional service has become a priority. It gets an opportunity to give high-quality publishers a chance to feature on its platform, thus burnishing its reputation as a premium brand. Eddy Cue, Apple’s vice president had mentioned how the company loves journalism while announcing Apple’s acquisition of the subscription news app Texture last year. He had said, “We only believe in quality journalism from trusted sources and magazines are free to keep producing engaging and beautifully designed stories for our users.”
For print publishers specifically, the tablet computer aimed to be much more than just another channel for doing business. It was supposed to be a double do-over. The shift in media consumption which happened from desktop computer-based browsers to tablet-based apps showed the hope that would not only press the reset button on the consumers’ expectations but will also make digital content free. This, however, doesn’t seem to be the case if tech giants like Apple dictate what publishers are and aren’t free to do on other makers’ devices.
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