Next Monday, Apple is expected to unveil a subscription service in the News app based on its purchase of the all-you-can-eat $10 per month magazine subscription service Texture. While The Wall Street Journal has been confirmed as one of the launch partners for the service, The New York Times and The Washington Post have reportedly passed on it due to Apple’s terms.
Mike Isaac, writing for The New York Times:
The Wall Street Journal plans to join a new paid subscription news service run by Apple, according to two people familiar with the plans, as other publishers chafe at the terms that the Silicon Valley company is demanding of its partners.
Other major publishers, including The New York Times and The Washington Post, have opted out of joining the subscription service. Apple and The Wall Street Journal plan to announce the deal Monday at a media event at Apple’s headquarters in Cupertino.
Apple appears to be following its playbook: get at least one major content provider on board and others will gravitate toward joining the service sooner than later.
That has served the Mac maker incredibly well in the past when its services chief Eddy Cue was negotiating terms of business with record labels because the music industry needed Apple to save it from piracy.
However, publishers don’t depend on Apple to expand their reach:
Publishers have also been seeking to expand beyond their core subscriber bases, finding new audiences across nontraditional platforms and striking deals with tech companies. Apple has teamed up with news organizations on its Apple News product for years, offering select content to consumers for free.
But publishers have had mixed experience partnering with Facebook on news:
Publishers have grown wary of some partnerships in recent years, as past relationships with companies like Facebook, Medium and others have soured. In the past, Facebook has inked deals with publishers to fund or support new initiatives, only to quickly change plans and yank support from one year to the next.
The thing is, publishers don’t need saving from Apple. Despite falling ad sales in print, digital subscriptions have been on the rise and The New York Times is a prime example of that.
Apple is said to charge customers ten bucks per month for an all-you-can-eat access to digital newspapers and popular magazines. Subscription revenue would then get distributed among the participating publishers who would individually earn a tiny fraction of each subscription.
To persuade publishers to join the paid service, Apple executives have said the scale of Apple News, which is installed on every iPhone sold to consumers, could introduce millions of new customers to their content.
But the most recent terms that Apple is offering to publishers ask for a cut of roughly half of the subscription revenue involved in the service, the people said. Apple has also asked publishers to give unlimited access to all their content, which has caused concern among potential partners, they said. A subscription is expected to cost $10 a month.
Another sticking point for publishers: they would not receive customer data from Apple, such as names, email addresses and addresses, which could be used to construct databases that could in turn be leveraged to sell other publisher products to readers.
The terms have caused some publishers to recoil, as a 50 percent cut is higher than the 30 percent Apple usually takes from apps and subscriptions sold through App Store.
Publishers are also concerned that they won’t have access to important data about the consumers—credit cards, email addresses and other subscriber information.
According to the Journal, the service will offer articles from hundreds of participating magazines and news outlets. There will be a free tier so that people will still be able to read “a smattering of select articles from a wide variety of publishers” without paying anything.