Magazine Publishers Support Apple's 50% Split for Paid Apple News Service

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Apple is set to launch an Apple News service that will provide access to paywalled news content and magazines for one $9.99 monthly fee in March, but the company is still working to establish deals with newspapers.

Earlier this week, The Wall Street Journal said that Apple was having trouble convincing some major news publications like the Washington Post and The New York Times to sign up for the service, due to Apple wanting a 50 percent revenue split.


Apple would keep 50 percent of all subscription revenue and the other half of the revenue would be split among publishers "according to the amount of time users spend engaged with their articles."

Compared to Apple's 70/30 App Store split and the more than 70 percent of revenue that goes to Apple Music artists, the 50/50 split sounds stingy, but Recode today spoke with industry insiders and provided some insight into why Apple settled on that number.

As it turns out, there are many magazine publishers already on board with the 50/50 revenue agreement, with most convinced that Apple will get millions of people to subscribe to the new service, providing a lot of revenue to publishers despite the dramatic split. From Re/code:
And some publishers are happy to do it, because they think Apple will sign up many millions of people to the new service. And they'd rather have a smaller percentage of a bigger number than a bigger chunk of a smaller number.

In the words of a publishing executive who is optimistic about Apple's plans: "It's the absolute dollars paid out that matters, not the percentage."
Magazine publishers, though, have little to no online monetization of their content, which is not true of major newspapers. The New York Times and the Washington Post, for example, have existing digital subscription businesses that allow them to collect 100 percent of the revenue brought in by subscribers.

According to Recode, magazine publishers that have been participating in Texture, the magazine service Apple purchased, are already familiar with that kind of revenue split. Texture will form the base for the Apple News subscription service Apple is creating, with Apple planning to charge one fee for access to news and magazines.

Since Apple's Texture purchase, magazines have been receiving approximately half of the revenue the service generates, along with 100 percent of ad revenue. It's not clear if major newspapers will ultimately agree to a similar terms given that doing so could cannibalize more profitable subscription options available outside of Apple News.

Apple is telling publishers that the new Apple News service will be heavily promoted and that it has the potential to generate millions of subscribers, which, as Recode points out, is not impossible given the success of the Apple Music service. Apple Music, which launched in 2015, now has more than 50 million paid subscribers.

Article Link: Magazine Publishers Support Apple's 50% Split for Paid Apple News Service
 

Appurushido

macrumors 6502
Sep 28, 2012
265
254
Magazine subscriptions are almost non-existent due to blog type websites and getting 50% is probably a whole lot more than they are making at the newsstand. Best place for to ready a magazine these days are on an airplane or the porcelain throne humans call a toilet.
 

Baymowe335

macrumors 603
Oct 6, 2017
6,375
11,892
Our profits are falling, so help us offset that with our super greedy subscription model LOL
Even 70/30 is stingy, let alone 50/50!
Apple’s profit is not really “falling,” particularly because we only have 1 quarter of data in the current fiscal year.

In that quarter, Apple made $20.06B in 90 days last year and made $19.96B this quarter. So profit was down less than 0.05%. For the year, it was up 20%.

Apple will likely be even more profitable as the higher margin services business grows.

Why would you not negotiate the best possible deal for your shareholders?
 

jlc1978

macrumors 68030
Aug 14, 2009
2,842
1,159
While interesting. my library offers a subscription service to a number of magazines for free. For example, I get the Economist through them. So unless Apple offers a number of magazines I wan’t and can’t get I see no reason to subscribe. YMMV.
 

Macaholic868

macrumors 6502
Feb 2, 2017
443
546
Apple should price this no differently than an app in the App Store. They take a 30% cut and the rest goes to the content creators. Split the revenue between the news organizations according to the percentage of views. If I were a publisher I’d laugh at their offer of taking a 50% cut. At the end of the day it’s good content that will drive the platform and lead to revenue. Apple should be rewarded for providing the platform but if the content is no good then nobody is going to use the platform. Apple should recognize that as they have with the App Store and pay content creators / distributors accordingly.
 

Cosmosent

macrumors 65816
Apr 20, 2016
1,346
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La Jolla, CA
I doubt this Rumor, UNLESS Apple is willing to provide customer information to the Mag Publishers, which I doubt Apple would do.

The rumors on this topic on the net today have ALL missed the most important point.

The importance & value of a direct relationship with the customer !

A rookie move being made by many today !
 

acorntoy

macrumors 68000
May 25, 2010
1,562
1,513
The only problem I have with magazines, whether paper or pdf, are all the ads. There used to be more content than there is now. I don't want to pay to view a bunch of ads in a magazine.
Cigarette/tobacco ads are now always two pages side to side. One with some dude leaning against the pickup and the next page has massive letters “SURGEON GENERAL WARNING”
 

usarioclave

macrumors 65816
Sep 26, 2003
1,447
1,506
100% of the ad revenue, 50% of the subscription revenue. The better your content, the longer people spend on your articles, the more money you make.
 

Baymowe335

macrumors 603
Oct 6, 2017
6,375
11,892
Do you really believe that 1B people are going to subscribe for a news service? They managed to entice just 50M for music. I expect news service might get 1M.
Nice guesswork, but I never said 1B would subscribe. I said the content providers would jump at the chance to get their content in front of 1B users, knowing they’ll only gain a small percentage of that.

Their other option is to not do it and eventually go out of business.

“Just 50M” is good enough for the second most music subscribers and is still growing. It’s also $6B in revenue/yr. A hobby for Apple, but even fractions of these kind of numbers could save content providers.
 

mimeArtist

macrumors regular
Mar 1, 2010
120
71
People seem to be forgetting that the 50/50 split is just for the viewing of the magazine, the magazine themselves can sell a Rolex ad for a lot more knowing they're getting a lot more eyeballs and they get to keep 100%
 

valkraider

macrumors regular
Apr 22, 2004
234
29
“The New York Times and the Washington Post, for example, have existing digital subscription businesses that allow them to collect 100 percent of the revenue brought in by subscribers. “

Well - they got 100 percent of zero from me.

I am sick and tired of having to maintain dozens of individual subscriptions and memberships.

But I may buy the Apple one because it gives me the access to all the stuff with one simple subscription.

The real answer comes later in the article that I guess a lot of people here never actually read.

Magazines like it, because the important part is the total overall revenue - not the split.

They get to make 50% of a large number which is way better than 70% of a small number.

Plus the ad revenue.
 

valkraider

macrumors regular
Apr 22, 2004
234
29
The only problem I have with magazines, whether paper or pdf, are all the ads. There used to be more content than there is now. I don't want to pay to view a bunch of ads in a magazine.
Every magazine I have looked at since 1970 has been filled with ads. Heck, others have pointed out - in many situation even the “content” is really an ad...
 
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notabadname

macrumors 65816
Jan 4, 2010
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Apple should price this no differently than an app in the App Store. They take a 30% cut and the rest goes to the content creators. Split the revenue between the news organizations according to the percentage of views. If I were a publisher I’d laugh at their offer of taking a 50% cut. At the end of the day it’s good content that will drive the platform and lead to revenue. Apple should be rewarded for providing the platform but if the content is no good then nobody is going to use the platform. Apple should recognize that as they have with the App Store and pay content creators / distributors accordingly.
Publishing’s platform already IS “No Good”. They are a quickly dying breed. Economies of scale make this a great option for a publisher that reaches relatively small markets these days, to reach millions. Publishers are making their money off adds, which are based on the size of the audience. Those who are saying Apple is being greedy don’t understand the model. Apple is taking 50% of a subscripton fee. Not all of the other revenue the magazine makes. Subscriptions simply drive the ad dollars. Finally, the magazine cost doesn’t change to grow the market. Instead of printing 200,000 magazines to blanket supermarkets, Barns & Noble, etc, and sell perhaps half of them, and eat the other costs- you publish one digital copy and push to millions of devices. Why do you think subscribions are frequently 1/4 and certainly less than 1/2 the “newsstand price”? Printing magazines is a risk - and there is always waste - ever see the discarded magazines if you have worked in a store/book seller? There are a lot of them. The subscripton is selling because of the convenience provided by the platform. Periodicals figure this new market out soon, or continue to go extinct.
 
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