Apple is negotiating with US newspaper publishers to launch a new subscription service for reading the articles, but according to the Wall Street Journal has so far found resistance due to the very strict conditions it would like to impose, especially on the economic level. The new system – which would be a sort of “Netflix for news”: pay a certain amount and read what you want from a single platform – is long overdue and could bring new sources of revenue for newspapers, in a period in which the their balance sheets are shaky and marked by a progressive reduction in advertising revenues.
Publishers do not consider Apple's proposal to keep half of the revenues from the new system for itself, not to share email addresses and other details of subscribers and to want to impose very binding clauses, including on the duration of contracts with individual publishers. . The service, which should be an evolution of the current Apple News and initially be available only in the United States, should allow subscribers to read the articles of the various newspapers participating in the initiative without limits, paying a monthly subscription fee in exchange. .
Apple's idea is to offer a place where articles from different newspapers are available, without having to subscribe to every single newspaper every time. Publishers would simply have to provide their content, while the technical and economic management of the system would rest with Apple. Depending on the number of articles read and how long the readers spent on them, Apple would calculate the share to be shared with the newspaper concerned, keeping a 50 percent commission for itself. The subscription to the new Apple News should cost around $ 10 a month, a figure comparable to what is required for the Apple Music streaming music service, but it is not excluded that the figure may change in the course of the negotiations.
The Wall Street Journal writes that so far Apple's proposal has not found great availability from the most important newspapers, which already have subscription systems to access their articles. The New York Times and the Washington Post have for now declined the offer, thanks to their well-established online subscription systems and wary of the conditions presented by Apple. The Wall Street Journal expressed concerns but is still keeping negotiations open. At the moment the impression is that publishers do not want to give up the possibility of being on a service that will become available on hundreds of millions of iPhones, iPads and Macs, but they do not seem to be willing to give up that much on economic terms and on sharing. some data.
Apple, which for some time has been carrying out initiatives to better protect the privacy of its users, does not seem to be willing to provide much information to publishers on who will subscribe to the new service. The company intends to apply similar management to that used for the App Store, but with further limitations. Publishers will not be able to obtain subscribers' email addresses or credit card numbers, which will be managed by Apple. User information is a very important resource for publishers, interested in providing their services directly and better understanding the characteristics of their readers.
A newsletter on the damned future of newspapers Whether it's in print or online, yes he understands what they tell us better if you know how they are changing every week. To receive it, write your email address here and press the button below. Having read the information, I agree to send the Newsletter In recent years, some of the major US newspapers have been very successful with their subscription systems. The New York Times charges about $ 15 a month for unrestricted access to its articles, while the Washington Post charges about $ 10. These solutions have allowed publishers to at least partially offset the lower revenues from advertising and, at the time itself, to recover some revenue given the lower sales of paper copies. Apple's system could divert users from these more traditional and profitable subscriptions, with lower revenues for publishers unless the service becomes widespread and used.
Apple sees the new system as an important opportunity to extend its revenues and offset lower iPhone sales. For the first time in the last 10 years, the company experienced a reduction in revenues and profits in the last quarter of 2018. The lower sales are linked to an overall slowdown in the smartphone market and to the increasing competition from Chinese manufacturers. like Xiaomi and Huawei. Commenting on the below-expected financial results, Apple CEO Tim Cook announced that Apple would be dedicated to extending its subscription services.
The new Apple News is expected to add to the current offering, which includes streaming music with Apple Music and music for storing files and photos with iCloud. Apple is also working on extending its services for streaming TV series and movies. Apple currently has around 360 million subscribers to at least one of its services, but says it wants to hit 500 million by the end of 2020.
Publishers need new sources of revenue to support their businesses, especially since Facebook changed the way its algorithms work, showing far less of their content to its subscribers, resulting in a drop in page views and ad yield for advertising. newspapers. Apple's new service could help alleviate the problem, but for now the hurdle of sharing out 50 percent of revenue appears to be difficult to overcome. Many have also pointed out that Apple, one of the richest companies in the world and with hundreds of billions of dollars in cash, wants to impose such high fees in an industry that has been in serious trouble for years, yet so important to the public utility that carries out.
