Publishers Unhappy with Apple’s Paid News Service Terms
Apple Inc is mulling the launch of a subscription service for news from a wide range of publishers later on this year and although, it is being touted as the ‘Netflix of News’ many publishers are not happy with the terms on offer. The details emerged in a report by the Wall Street Journal, and the tech giant is still in talks with some of the biggest publishers in the business on the terms of the partnership. The new service is aimed at generating revenues that have been affected due to the slowdown in iPhone sales globally and Apple possibly feels that a subscription new service is a next frontier for the company. However, they need enough publishers on board to make it work.
Apple has spoken to a range of publishers and according to the plans; the service is going to be priced at $10 a month. If a user buys that subscription, then he will have access to an unlimited number of news stories from the participating publishers. As far as revenue sharing goes, Apple is going to keep 50% of the subscription fees, and the rest of the money would go into a pool that would then be divided by publishers according to the length of time that users spent reading content that they had published. An Apple News app already exists, but that is a free service.
However, some of the biggest publishers in the industry are not quite happy with the terms on offer. According to the report, the Washington Post and the New York Times have not yet agreed to partner with Apple. That being said, a breakthrough could yet be on the horizon, considering the fact that the parties are still in talks. Those publishers have their own monthly subscription services, and for both the New York Times and the Washington Post, subscriber numbers are rising. The Times charges $15 a month for its cheapest package while the Post’s cheapest subscription costs $10. Needless to say, they have their concerns regarding this arrangement with Apple.
Apple, however, has asked publishers to instead go for a one-year pilot project and see whether the service works in their favor or not. That proposal has also created a situation in which the company has to weigh the divergent views of different publishers. While some publishers want the flexibility to discontinue the partnership at any point in time, some others want the initial agreement to be for the longer term.