Facebook not launching media and news subscription tool on iPhone because of Apple's 30% t...
Facebook is on the verge of launching a way to allow companies to sell subscriptions through the social media venue -- but a dispute over Apple's mandated 30 percent of revenue derived through apps distributed on its store appears to have scuttled the launch on the iPhone.
A report on Thursday from Recode notes that the debate has been going on between Apple and Facebook for months, according to sources familiar with both companies. The tool seeks to enforce paywalls associated with shared content in one of two ways.
The first, a metered index, prompts users to pay for the content after users have read 10 of the publisher's articles over a set period of time universally. A "freemium" version allows publishers to gate off certain content, and not require payments for everything.
Facebook claims that it will not take any revenue from the payments gathered, and reportedly Google will not take any funds generated from users who get the Facebook app through Google Play. However, Apple requires up to 30 percent of revenue generated from in-app purchases, including paywall funds generated as a result of the Facebook app.
Apple does not allow app developers to suggest that users pay for service outside of the app in question.
"We know subscriptions are an important business model for many in the news industry, that's why we've been working hand-in-hand with publishers to create a product that will drive real value for them," said a blog post penned by Facebook's Campbell Brown. "We're committed to this effort and optimistic that we'll launch a test on all mobile platforms soon."
The Facebook subscription feature is rolling out in the next few weeks with Hearst, Tronc, and the Washington Post involved. Specifically not participating in the rollout are the New York Times, and the Wall Street Journal.
A report on Thursday from Recode notes that the debate has been going on between Apple and Facebook for months, according to sources familiar with both companies. The tool seeks to enforce paywalls associated with shared content in one of two ways.
The first, a metered index, prompts users to pay for the content after users have read 10 of the publisher's articles over a set period of time universally. A "freemium" version allows publishers to gate off certain content, and not require payments for everything.
Facebook claims that it will not take any revenue from the payments gathered, and reportedly Google will not take any funds generated from users who get the Facebook app through Google Play. However, Apple requires up to 30 percent of revenue generated from in-app purchases, including paywall funds generated as a result of the Facebook app.
Apple does not allow app developers to suggest that users pay for service outside of the app in question.
"We know subscriptions are an important business model for many in the news industry, that's why we've been working hand-in-hand with publishers to create a product that will drive real value for them," said a blog post penned by Facebook's Campbell Brown. "We're committed to this effort and optimistic that we'll launch a test on all mobile platforms soon."
The Facebook subscription feature is rolling out in the next few weeks with Hearst, Tronc, and the Washington Post involved. Specifically not participating in the rollout are the New York Times, and the Wall Street Journal.
Comments
I’m not sure why certain companies demand special privileges. Even if Apple were to give their whiny ass a privilege then that opens the floodgates for everyone else to demand lower fees and then lower fees....
As multiple apple products owner,,,,have a lots if free news resources.
Apple, maybe take 50%, not 30.
Seriously, to say “no loss” isn’t accurate. It’s a total gain not to have Facebook. For anything.
Now to get back at your question directly. Facebook has never had an issue with the App Store policies before. So why would they now? The answer. They don't. Facebook is like Google. They don't need App Store revenue. In fact they don't want it. Do you know why? Ads. Facebook makes far more on ads than they ever would from people buying subscriptions through the App Store. Now look. Open your mind here and realize that there are other business models than Apple's. Like the business model that allowed Google to surpass Yahoo and Microsoft and become the world's second biggest company by giving away Chrome, Android, the GSuite software and nearly all their other products and services for free.
Now please be willing to actually understand instead of doing the fanboy "I am closing my mind now because this information flies in the face of what I choose to believe about my favorite company" thing on purpose. Facebook doesn't want to use the subscription model for any of their services because they make less money that way. They can't make money by restricting themselves to 25% of the market and making a premium on hardware sales to that 25%. They make money off ads, and the way to make money off ads is to have as many users as possible engaging with their product as much as possible. The subscription model flies in the face of that because if they adopt that they will lose 50% to 75% of their customers off the bat. They don't want to write off those customers as "cheap", "uneducated", "unsophisticated", "moochers", "leeches", "no taste", "don't understand tech" etc. (The way that Apple fans view Android and Microsoft consumers.) They can make revenue off showing ads to those people too because their business model is volume not margin. To use a broadcast analogy, Google and Facebook are network TV where Apple is premium cable. Or Facebook is broadcast radio where Apple is satellite radio.
That is why the only consumer services that Google charges for are YouTube Red, Google Play Movies/TV/Books/Music and cloud storage. Now the latter has real infrastructure costs and if Google gave away unlimited cloud storage for free you would have 1 billion people uploading 5 TB of data just because. But the former? The content providers own the content and they want to be paid for it.
The same is going on here. Hearst, Tronc, and the Washington Post are the ones who want - and need - this revenue. Facebook doesn't, and trust me if they could work out a way where they could provide this service for free they would. Yes, Facebook benefits. Why? Because right now Facebook serves up links and when you clink on a link you leave Facebook and go to the newspaper's site. This allows you to subscribe to the newspaper within the app, read the news content while staying in the app and still seeing Facebook ads. The paper gets the subscription revenue, Facebook gets the ad revenue and both win. But if there was some way for Facebook to get the ad revenue without the subscription component that is what they would do because that is what they do for every single other app that they have in the App Store. It would maximize the number of people who read the news content while staying in their app and in the process see their ads. Instead, 50%-75% fewer people will use this app than otherwise would. Facebook isn't happy with this, but they have no choice but to go along, because that way it makes the content providers their partners instead of their competitors and Facebook wants to keep their partnerships with the content providers in a way that maximizes the time that people stay on Facebook.
But hey, you go ahead and blame Facebook for this because you choose to believe that every other company is an enemy of Apple out to take away Apple's hard earned money.
What's interesting to me is why Google would go along with charging nothing. Surely Google didn't do this out of the goodness of their hearts. Did they work out a side deal for data-sharing, or some agreement for integration of the Google Display ad system?
Or is it just a 'make-nice' gesture to get newspapers to back off demands for antitrust investigations of the two companies?
Because 0% (no subscribers) is somehow better than 70%?