Apple signed 'many' publishers for subscription service at 50 percent revenue split, repor...

Posted:
in General Discussion edited February 13
According to a report on Wednesday, Apple has signed a number of publications to an upcoming subscription news service despite what at first blush appears to be an exorbitant 50 percent revenue split.

Texture
Apple's upcoming subscription service is expected to be built on the framework of recent acquisition Texture.


On Tuesday, a Wall Street Journal report said Apple is seeking to keep about half of all revenue generated by publications selling subscriptions on a premium news service rumored to debut this spring.

As pundits express indignation at the seemingly excessive figure, which is significantly higher than the 15 percent to 30 percent take Apple garnishes from App Store sales, at least some publishers are on board and have inked deals with the tech giant in hopes of future growth.

Citing industry sources, Recode reports "many" publishers have already signed deals to be included in Apple's as-yet-unannounced service. As reported by the WSJ, the Wednesday report notes publishers agreeing to Apple's terms will net 50 percent of subscription revenue.

But revenue sharing is not the only factor publishers are considering in the ongoing negotiations. For some, including those that have signed up, the draw is a very real possibility that Apple's service will substantially grow their respective readerships.

According to the report, Apple believes it can generate millions of subscribers through investment and aggressive promotion. Apple proved it can capitalize on a subscription model with Apple Music, which started as an industry upstart and has since grown to 50 million paying subscribers.

As noted in the report, publishers are happy to receive a smaller percentage of revenue from a massive subscriber base than a larger share of a limited revenue pool.

"It's the absolute dollars paid out that matters, not the percentage," said one unnamed publishing executive.

While small to medium size publications are showing interest in Apple's solution, the revenue split is unlikely to garner support from big-name newspapers that have invested in a buildout of first-party digital services. Beyond monetary issues, larger publications are reportedly concerned that Apple will gate access to valuable subscriber data and information.

Apple is widely rumored to launch a paid news service this spring that will offer unlimited user access to bundled content from a variety of publishers. Built on the framework of Texture, the so-called "Netflix for Magazines" that Apple purchased in 2018, the product is expected to cost $10 per month and, according to a recent rumor, will be unveiled at a special event on March 25.

Comments

  • Reply 1 of 16
    AppleExposedAppleExposed Posts: 1,498unconfirmed, member
    Ha!

    On the other threat I explained to doubters why the split isn't so bad an idea for publishers. Glad they agree.
    lolliver
  • Reply 2 of 16
    robbyxrobbyx Posts: 479member
    I'm assuming these magazines and newspapers won't be ad-free.  The higher the subscriber count, the more they can charge for advertising.
    GeorgeBMacradarthekat
  • Reply 3 of 16
    Absurd. Newspapers have been bleeding for years. 
    MisterKit
  • Reply 4 of 16
    I find it hard to believe this will be a big hit. News is so easy to come by today most won't want to pay. Just my $.02
  • Reply 5 of 16
    Will be curious to see what magazines will be available. Currently I have online access to read and download our local Libraries magazines through the RBdigital app/service. With my library card there is no charge for this service, well actually there is, it is called school taxes.
    radarthekat
  • Reply 6 of 16
    mattinozmattinoz Posts: 1,138member
    robbyx said:
    I'm assuming these magazines and newspapers won't be ad-free.  The higher the subscriber count, the more they can charge for advertising.
    I'd like to see them get back to newspapers where the ads are treated like content. Print has been a great history source over the years and that includes the Ad's as a sign of the times.

    Digital you get different ads each time you open on the rare chance you see an ad over interest you have to click then. Worse than that you get the creppy ad bubble effect where ads are targetted based on search when search is about the worst prodictor of what is going to interest me.  Given most key interests are covered by regular reads not one off searches the ads in digital tend to be too much and to late to get interest. 

    Magazines seem to have held better because they can cater to a known audience. Will be interesting to see is they start pushing for shorter distribution times, maybe not daily but even twice weekly vs monthly for print and round out content with more immediate news to keep their advertisers happy. 
  • Reply 7 of 16
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    n2itivguyMisterKitrobbyxradarthekatAppleExposed
  • Reply 8 of 16
    I find it hard to believe this will be a big hit. News is so easy to come by today most won't want to pay. Just my $.02
    I dunno, the Texture app had been doing pretty well before Apple bought them. Believe it or not, people will pay for convenience and Texture is like a library of subscriptions.
  • Reply 9 of 16
    djsherlydjsherly Posts: 1,022member
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    Yes, but they were distributing a complete newspaper which for its n number of pages had n/6 or its area covered in paid ads. These days people read by the article so i don’t disagree that print and distrib costs go away for the most part, but it’s not a like for like replacement. Apple news isn’t dropping 150 articles, complete with paid for ads, into someone’s digital news feed. 
  • Reply 10 of 16
    It's as if nobody knows that periodicals and newspapers have historically been sold by bookstores and other retailers that keep the same sort of "50%" of receipts that other retailers take to stay in business, pay rent, etc. Clothes you buy in a store are marked up 100% by the retailer. Books and magazines are sold for far more than they cost, and most are thrown in the trash. 

    If the WSJ and others can do better on their own, fine. But they obviously can't or all these outlets wouldn't be going out of business, firing all their talent and hiring part-time bloggers who don't know shit from shinola and can only write clickbait garbage. For everyone else, this is the iTunes moment that could save writing--creating a real business model for creating magazine and video content--if Apple can pull it off.
    GeorgeBMacradarthekatAppleExposed
  • Reply 11 of 16
    WSJ has a specialized audience willing to pay their nearly $500 annual subscription cost (which can be discounted down a low, low $20/month).  So, it is unlikely we will see them as part of the service.

    But other, general purpose outlets, are far more likely to sign.  Eventually, I see some going this route exclusively so they can eliminate their own distribution costs.
  • Reply 12 of 16
    AppleExposedAppleExposed Posts: 1,498unconfirmed, member
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    I thought the idea was:
    News App will remain the same with ads. A subscription removes ads and includes publications.

    Your comment has me thinking. Will we be able to KEEP our publications forever?
    When we subscribe to a magazine/newspaper subscription we get to keep the print for as long as we want. When we cancel, we no longer receive new issues/etc. The mailman doesn't knock on our door asking for the magazines back with his hand out; "Your subscription ended yesterday".

    In the past I used to go over my old magazines even though I no longer subscribed. It would be nice to do this.

    On the other hand maybe it will be an all-you-can-read deal where we can go back in time and read all issues of a publication but once our substitution ends, they're all gone.
  • Reply 13 of 16
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    I thought the idea was:
    News App will remain the same with ads. A subscription removes ads and includes publications.

    Your comment has me thinking. Will we be able to KEEP our publications forever?
    When we subscribe to a magazine/newspaper subscription we get to keep the print for as long as we want. When we cancel, we no longer receive new issues/etc. The mailman doesn't knock on our door asking for the magazines back with his hand out; "Your subscription ended yesterday".

    In the past I used to go over my old magazines even though I no longer subscribed. It would be nice to do this.

    On the other hand maybe it will be an all-you-can-read deal where we can go back in time and read all issues of a publication but once our substitution ends, they're all gone.
    Currently in News (at least the Mac version) you can "save" a story.   Plus, you can also open it in Safari where you can save it as a PDF.   Hopefully that won't change.

    In music you only get to keep the songs you download as long you maintain your subscription, but I doubt the same will apply to news article because they are mostly time sensitive.  most are obsolete within a day or a month at most. 
  • Reply 14 of 16
    AppleExposedAppleExposed Posts: 1,498unconfirmed, member
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    I thought the idea was:
    News App will remain the same with ads. A subscription removes ads and includes publications.

    Your comment has me thinking. Will we be able to KEEP our publications forever?
    When we subscribe to a magazine/newspaper subscription we get to keep the print for as long as we want. When we cancel, we no longer receive new issues/etc. The mailman doesn't knock on our door asking for the magazines back with his hand out; "Your subscription ended yesterday".

    In the past I used to go over my old magazines even though I no longer subscribed. It would be nice to do this.

    On the other hand maybe it will be an all-you-can-read deal where we can go back in time and read all issues of a publication but once our substitution ends, they're all gone.
    Currently in News (at least the Mac version) you can "save" a story.   Plus, you can also open it in Safari where you can save it as a PDF.   Hopefully that won't change.

    In music you only get to keep the songs you download as long you maintain your subscription, but I doubt the same will apply to news article because they are mostly time sensitive.  most are obsolete within a day or a month at most. 

    Right but like science magazines, it's nice to look back every now and then. Some of them are educational and the facts don't change.
    GeorgeBMac
  • Reply 15 of 16
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    I thought the idea was:
    News App will remain the same with ads. A subscription removes ads and includes publications.

    Your comment has me thinking. Will we be able to KEEP our publications forever?
    When we subscribe to a magazine/newspaper subscription we get to keep the print for as long as we want. When we cancel, we no longer receive new issues/etc. The mailman doesn't knock on our door asking for the magazines back with his hand out; "Your subscription ended yesterday".

    In the past I used to go over my old magazines even though I no longer subscribed. It would be nice to do this.

    On the other hand maybe it will be an all-you-can-read deal where we can go back in time and read all issues of a publication but once our substitution ends, they're all gone.
    digital subscriptions are almost always  'rent' vs 'own'
  • Reply 16 of 16
    I keep reading all these silly news stories about Apple’s “exorbitant” cut. Obviously these writers have no idea how the printed magazine and newspaper business has worked since forever. The price you pay at the newsstand or for a subscription merely covers printing and postage costs. All the actual profits are generated through advertising. Apple is eliminating their distribution costs. A 50% cut of the subscription cost is exceedingly generous to the publishers, who will make most of their profit via advertising that is not susceptible to browser-based ad blockers.
    I thought the idea was:
    News App will remain the same with ads. A subscription removes ads and includes publications.

    Your comment has me thinking. Will we be able to KEEP our publications forever?
    When we subscribe to a magazine/newspaper subscription we get to keep the print for as long as we want. When we cancel, we no longer receive new issues/etc. The mailman doesn't knock on our door asking for the magazines back with his hand out; "Your subscription ended yesterday".

    In the past I used to go over my old magazines even though I no longer subscribed. It would be nice to do this.

    On the other hand maybe it will be an all-you-can-read deal where we can go back in time and read all issues of a publication but once our substitution ends, they're all gone.
    Currently in News (at least the Mac version) you can "save" a story.   Plus, you can also open it in Safari where you can save it as a PDF.   Hopefully that won't change.

    In music you only get to keep the songs you download as long you maintain your subscription, but I doubt the same will apply to news article because they are mostly time sensitive.  most are obsolete within a day or a month at most. 

    Right but like science magazines, it's nice to look back every now and then. Some of them are educational and the facts don't change.
    LOL...  You haven't been paying attention to our political processes?  
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