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

[jlc1978]

True. And it has gotten progressively worse. I don't mind a few ads. But, when there are more ads than substantive content, I take umbrage with that, especially as a subscriber. As of late, I don't subscribe to hardly any anymore, due to that problem.

I get where you're coming from but the reality is ads pay the bills, and the more people subscribe in desirable demographics the more ads pay. That's why they will sell super cheap subscriptions: to raise circulation numbers and be able to charge more for ads.

Apple's deal is not that bad, considering they will have the costs of printing, distributing, and crediting for unsold copies; Apple will handle a digital distribution network for them. I would guess Apple will at least provide some demographic data and readership number so the can price ads accordingly. I can see why they'd take the deal. The added revenue can help replace declining print subscription revenue and boost readership numbers.

Offer a ad-free option for a subscriber, and I would be more inclined to pay a little higher price.

Unfortunately, ad free and a little higher price are mutually exclusive.

Ad revenue is about 1.25x subscription and news stand revenue.
[doublepost=1550170859][/doublepost]

Because the shareholders shouldn’t be the main focus. Customers should be the ones. You should attract shareholders by delivering a roadmap of products that convince them they’re prepared for the future instead of milking customers and delivering dividends.

For profit companies exist for one reason: maximize shareholder return. if managers and senior leaders fail to do that they need to be replaced.

Customers are merely the means to that end. Build things customers want and price it to maximize revenue. It's pretty simple.

 

[9081094]

My guess is you have never built or maintained a content distribution network...

I’m sure google, Netflix, Spotify or amazon will follow and will offer the same fairly priced. The ones abandoning the Apple subscription won’t return because they’ll feel ripped off and don’t trust that company again.

Same with the people who abandoned the Mac or went from iPhone to other brands. Seeing lots of examples around me. When you don’t treat your users fair, some day they’ll pay the bill.

That’s what’s happening in China and India. People want value for money and not some sort of “lifestyle”.
[doublepost=1550171448][/doublepost]

I get where you're coming from but the reality is ads pay the bills, and the more people subscribe in desirable demographics the more ads pay. That's why they will sell super cheap subscriptions: to raise circulation numbers and be able to charge more for ads.

Apple's deal is not that bad, considering they will have the costs of printing, distributing, and crediting for unsold copies; Apple will handle a digital distribution network for them. I would guess Apple will at least provide some demographic data and readership number so the can price ads accordingly. I can see why they'd take the deal. The added revenue can help replace declining print subscription revenue and boost readership numbers.



Unfortunately, ad free and a little higher price are mutually exclusive.

Ad revenue is about 1.25x subscription and news stand revenue.
[doublepost=1550170859][/doublepost]

For profit companies exist for one reason: maximize shareholder return. if managers and senior leaders fail to do that they need to be replaced.

Customers are merely the means to that end. Build things customers want and price it to maximize revenue. It's pretty simple.

I know that’s true for a lot of companies and I also know that those companies being run by shareholders aren’t built for the long haul. Apple doesn’t need the investments of shareholders to sustain. It chose to do. Steve Jobs never cared about Wall Street or shareholders, instead he cared about bringing the best possible to the customer and by that he was able to let Apple grow. Tim Cook is relying on the brandname it took years to build and relying on the success the iPhone was. But his incremental investments and downsizing the value for money buying an Apple product today, will make all those previous efforts get vaporized sooner than later.

 

[cmaier]

Steve Jobs never cared about Wall Street or shareholders

Sure. LOL.

 

[Icaras]

Apple has to lower its profit split.

Why? Article says they support it.

 

[9081094]

Why? Article says they support it.

Unless there will be a Google, Amazon, Netflix or Spotify offering the same with a more reasonable split for publishers. I think what Apple might introduce in March will get copied soon.

 

[VictorTango777]

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.

Apple telling other companies to accept less revenue from each customer and instead focus on making better products to gain more customers

 

[randomplaydo]

Smart move for Apple and the press. They're in the same situation that the music industry was in when the iPod and the iTunes Store launched. People had other ways of getting their digital music for free, but by making it simple and cheap to get and sync music Apple was able to completely change the landscape. The music industry hates that they made the deal that's in place, BUT they also know they would've been dead if Apple hadn't come along.

Both Apple and the press industry knows that the same thing is happening today with them and if something doesn't change soon, paywalls and ad revenue will not be enough to save them when people are getting their 'news' via facebook and free blogs. 50% of something is better than what they're currently getting and definitely better than going out of business.

 

[Baymowe335]

Because the shareholders shouldn’t be the main focus. Customers should be the ones. You should attract shareholders by delivering a roadmap of products that convince them they’re prepared for the future instead of milking customers and delivering dividends.

Seeing their messy product line ups and Mobile World Congress around the corner I wouldn’t bet on higher profits the coming quarters.

To turn the tide new, better, more affordable products that offer the customer more value for money would be a better idea.

For me as a potential customer it makes me sad and annoyed to see Apple making exhorbitant amounts of profits and seeing that every product they come to market is more expensive than the ones before.

It sure isn’t a mentality with placing the customer first by milking them to the max.

Your analysis of the state of Apple is a joke. They are doing a fantastic job delivering products that people will buy, at an unprecedented level.

The financials prove Apple is in a class of their own and delivering what customers want.

You can’t make $20B in PROFIT in 90 days selling inferior products.

Hate on.

 

[johngordon]

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.

Baymowe didn't say that 1B people would subscribe. He said that 1B people would have easy access to the content. And if 1B people have that easy access, its a safe enough bet that some people will subscribe.

I use News quite a lot, and sometimes click on stories by publications that require a subscription. I wouldn't ever bother signing up to individual publications, as its just not worth it. But if I could sign up to *everything* for $10 a month I might be tempted.

And if they launch their tv service and have bundled subs for Music / TV and News that worked out at less than $30 a month for all three, then that could be pretty compelling for a lot of people.
[doublepost=1550176449][/doublepost]

50% of revenue? The Tim Cook’s era greed is astounding. You do all the hard work and Apple gets 1/2 for doing very little other than letting you behind walled garden. Keep this up and Tim Cook will run Apple into the ground.

Is it necessarily about the hard work? Or the value in the proposition of getting your content easily in front of that many eyeballs?

OR

Could it be argues that Apple, in getting so many of its devices in the hands of so many could be considered hard work that the publishing industry hasn't had to do?
[doublepost=1550176594][/doublepost]

“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.

Exactly this. Its simple maths. I have on occasion had subscriptions to a few things, but usually decide they are too expensive for the amount of use I get from them. But paying less for access to more content would likely be a far better value proposition. Especially if bundled with Music and TV.

 

[MacsRuleOthersDrool]

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!

And what do YOU care?

Are you a newspaper/magazine publisher?

If not, then it is of no concern to you.

 

[mstrmac]

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: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

The publishers save on the printing and material cost (50%) that eats away at the profit that a magazine makes with the legacy subscription business model. Of course the Publishers see this as a way to increase readership through a subscription service via Apple.

 

[s15119]

And what device do they have is so awesome to warrant 50%? And can you imagine the conditions? No boobs, no bad language, nothing that doesn't fit Tim's Disney view of the world. PUKE!

They have customers willing to pay 50%. That alone warrants them charging 50%. And keep your puke at home, please.

 

[falainber]

Do you really think the person you're responding to was suggesting a billion people would subscribe? Or is that just an easy strawman to fight against. I suspect there are a lot of magazines out there who would be very happy to have a million new readers. We'll see how it works out.

And if he was not suggesting that, why did he put it out then? There are 4B people worldwide with access to Internet. Any company/website can aggregate news for them. Does it trump Apple's one billion? These are all pointless numbers. Flashing 1B number is just a cheap trick that some Apple fanbois like to use.

 

[Rique]

I don’t know anyone who subscribes to any magizines, and I have never subscribed to any, but at the right price this could be appealing.

My wife and I use Texture and we love it. Far more magazine content than we could ever read and for only $9.99 a month, we think it's a bargain. But then, we are dedicated readers and we used to snatch up bargain magazine subscriptions when they were available. With Texture, we don't need to do that anymore and we have the added benefit of not having to be overpowered by the scent-laden perfume ads (those chemicals literally make my wife sick, this is not just a matter of objectionable taste - which it is).

If you're a reader - and in particular a magazine reader, I highly recommend Texture. And thank you for whomever mentioned Zinio. Yet another option to consider.
[doublepost=1550186424][/doublepost]

The publishers save on the printing and material cost (50%) that eats away at the profit that a magazine makes with the legacy subscription business model. Of course the Publishers see this as a way to increase readership through a subscription service via Apple.

Not to mention distribution costs.
[doublepost=1550186727][/doublepost]

Baymowe didn't say that 1B people would subscribe. He said that 1B people would have easy access to the content. And if 1B people have that easy access, its a safe enough bet that some people will subscribe.

I use News quite a lot, and sometimes click on stories by publications that require a subscription. I wouldn't ever bother signing up to individual publications, as its just not worth it. But if I could sign up to *everything* for $10 a month I might be tempted.

And if they launch their tv service and have bundled subs for Music / TV and News that worked out at less than $30 a month for all three, then that could be pretty compelling for a lot of people.
[doublepost=1550176449][/doublepost]

Is it necessarily about the hard work? Or the value in the proposition of getting your content easily in front of that many eyeballs?

OR

Could it be argues that Apple, in getting so many of its devices in the hands of so many could be considered hard work that the publishing industry hasn't had to do?
[doublepost=1550176594][/doublepost]

Exactly this. Its simple maths. I have on occasion had subscriptions to a few things, but usually decide they are too expensive for the amount of use I get from them. But paying less for access to more content would likely be a far better value proposition. Especially if bundled with Music and TV.

It's the same value proposition which Netflix offers. It's a similar value proposition for SetApp, also. Given a choice between a-la-carte subscriptions and a broader, curated option - I will go with the curated content, all other factors being equal or close-to-equal. Netflix > iTunes (at least right now), because I pay once for shows, movies, documentaries, etc... with iTunes (again, for now), it's a-la-carte. SetApp > "bargain" application bundles for much the same reason, albeit a differing comparative is at work in that equation.

 

[Solomani]

They would be stupid not to support getting a billion devices easy access to their content.

You're assuming that billions of Apple customers are actually eager to pay for News subscription services. You are likely wrong.

 

[Baymowe335]

You're assuming that billions of Apple customers are actually eager to pay for News subscription services. You are likely wrong.

Based on what? The over 50M customers that pay for AppleMusic, the 350M total subscribers, or the services business growing at 20%?

Please tell me what planet Apple isn’t doing well with subscription services and why this will not be successful? I mean, since Apple only has 350M paying subscribers for various services, iCloud, music, apps, etc and a $45B services business that is as big as the entire Disney company and 3X bigger than all of Netflix?

Please tell me the facts you used in your incredible analysis of the situation.

 

[ipponrg]

Based on what? The over 50M customers that pay for AppleMusic, the 350M total subscribers, or the services business growing at 20%?

Please tell me what planet Apple isn’t doing well with subscription services and why this will not be successful? I mean, since Apple only has 350M paying subscribers for various services, iCloud, music, apps, etc and a $45B services business that is as big as the entire Disney company and 3X bigger than all of Netflix?

Please tell me the facts you used in your incredible analysis of the situation.

Im glad you are looking at it from a Tim Cook perspective. Someone please hire this guy from his Fortune 15 desk job, so he can add value to the company in an exec position and see how black/white numbers are.

 

[Baymowe335]

Im glad you are looking at it from a Tim Cook perspective. Someone please hire this guy from his Fortune 15 desk job, so he can add value to the company in an exec position and see how black/white numbers are.

Everything I said was fact. What have you said?

 

[ipponrg]

Everything I said was fact. What have you said?

I’ve said facts too. You don’t want to be in an exec position where you can call the shots like Tim Cook does?

 

[Soccertess]

They have customers willing to pay 50%. That alone warrants them charging 50%. And keep your puke at home, please.

maybe that's why the majority of the world uses Android. Look up some stats. Only hold outs are USA and Japan. Tim has tanked Apple market share just like Sculley!

 

[jlc1978]

maybe that's why the majority of the world uses Android. Look up some stats. Only hold outs are USA and Japan. Tim has tanked Apple market share just like Sculley!

I’d say having the lion’s share of the profitability in the smartphone market vs the largest marketshare isn’t exctly tanking in the market.

 

[Firelock]

What I question about the service is not the business model, but the price, if it is being reported accurately. I am certain that I read more magazines than most people, yet I don’t come close to spending $120/year on the subscriptions. My wife and I read National Geographic, Discover, Wired (which I will probably drop soon as there is almost no content anymore) and Smithsonian. All of which are $20/year or less. That’s $80 and that will probably drop to $60 soon. Most of the other content I want to read on the Internet is free. (That may not be fair, but it is the way that it is.) Now if they can get the NYT and WSJ on board, then I might be interested.

 

[bb9]

What is most important to me is that i refuse to give my business to tabloids. - they are lies, untruths. They caused a not of bad things - the tragic death of princess Diana then this trump’s scandal(s), etc.

 

[danny842003]

maybe that's why the majority of the world uses Android. Look up some stats. Only hold outs are USA and Japan. Tim has tanked Apple market share just like Sculley!

I wish people would do some actual research to bash Tim with.

 

[s15119]

maybe that's why the majority of the world uses Android. Look up some stats. Only hold outs are USA and Japan. Tim has tanked Apple market share just like Sculley!

Hilarious. Total nonsense, but hilarious. Thanks for the wonderful laugh. Have a great weekend.