Apple To Launch News Subscription Service But Faces Publishers' Backlash Over 50 Percent Revenue Cut: Report


Apple is reportedly planning to launch its all-you-can-read news subscription or "Netflix for news" service soon, but it's running into issues with publishers over the terms.

According to the report, the Cupertino brand wants a cut of revenue around 50 percent or "about half" from the service, which doesn't sit right with publishers.

Apple News Hiccups

Citing "people familiar with the situation," The Wallstreet Journal says that major publishers such as The New York Times and The Washington Post still haven't agreed to license their content to the service because of the terms.

Under the proposed conditions, Apple would take a 50 percent cut of the revenue, while the rest will be divided among the publishers based on how much time users spend on reading their articles. The price of the service isn't clear just yet, but it's said to be $10 a month.

Other Roadblocks

Another issue that publishers have with the service is that they may not be given access to the data of the subscribers, which is crucial for their marketing efforts.

Apple also wants "at least some" publishers to stay onboard for one year at the very least. While some of them are looking for a longer commitment, others want the option to exit early.

Apple's Focus On Services

It's believed that the upcoming service would be the paid tier for Apple News. It's also said to be similar to Netflix, but instead of TV shows and movies, it's going to provide unlimited access to select news sources. By the same token, users will pay a monthly fee to read all the magazines and articles they want.

Interestingly, this shift to services in a bid to increase revenue aligns with a recent report that Apple is selling some of its products at cost or at a loss, such as the Apple TV 4K, AirPods, and HomePod. This implies that it's making them as affordable as possible and, in turn, turning them into attainable access points to its services.

Additionally, the company has been facing an iPhone sales slump of late, which could explain why it's pushing financial terms like this to publishers.

ⓒ 2018 All rights reserved. Do not reproduce without permission.
Real Time Analytics