Apple's Netflix for News subscription service has not yet started, but a new report from The Wall Street Journal Proposes that the technology company wants to cut revenues from the new service by 50 percent. The paid Apple News service works much like Netflix or Hulu for TV shows. Users would pay Apple a single monthly price and get access to a variety of paid news sources and journals, all bundled.
However, Apple appears to be experiencing problems with publishers about how much of that money (supposedly $ 10 a month per subscriber) will return to the creators of the content. Loud WSJCurrently, Apple is proposing offers that would keep half of its revenue, while the other half would depend on how much time people spend reading each publisher's content. The model is similar to Spotify's calculation of artist payouts in the past based on total listening times.
Especially the WSJ claims that the proposed pricing split major news sites like The New York Times and Washington Post not agree to license content for the service. (For his part the WSJ In addition, the own discussions with Apple have gone well.) The publishers are also worried that they would not get access to the subscriber data with Apple's news service. This would deprive companies of the email and credit card information that is critical to their marketing efforts.
We were already on this path earlier. Apple tries to extract unfounded unfair terms from content creators. This has been dooming its TV ambitions for years to the point that Apple is now raising millions for creating its own exclusive content for the future TV service rather than licenses from other sources.
In addition, Apple's paid news service comes at a critical time for the company, which has seen iPhone sales declines and a new focus on services as an important source of revenue for the business. Apple News is preinstalled on every billions of iOS devices in the world. Converting even a fraction of these users into paid subscribers would be a great addition to Apple's services business.
The company has already used this strategy to achieve great success with Apple Music, which used its position as a first-party provider to offer real competition to Spotify. Achieving a similar coup with News and its 90 million users would be critical to the future of the business – but it must have compelling content from partners who believe the deal is worth doing so. Already feared news publishers ask, per prospect only half of the total turnover to fight, seems to be a bad way.
It is still claimed that Apple is negotiating with the publishers for details and completing plans for service to be introduced later this year. That can change everything. But as a starting point for negotiations, it seems Apple is asking too much.