Rumor mill: A premium news service from Apple could ask publishers to give up half of their earnings. Paid subscriptions though the iOS news app could roll out as early as March 25.
Smartphone makers are scrambling for ways to increase revenue now that they have realized consumers are not interested in buying new $1,000 devices every single year, or even every two years. Apple is trying to boost its revenue from services, and its next major introduction is expected to be a paid news subscription through the Apple News app on iOS.
A premium news subscription could cost around $10 per month, the same that Apple Music currently costs. Compared to online newspaper subscriptions and well known news sites, the cost is not unreasonable, especially by Apple’s pricing standards.
However, publishers are reportedly throwing a fit over the terms that Apple has laid out for posting their work. Cupertino wants to “keep about half of the subscription revenue” generated by publishers. Calling it the Netflix of news, Apple’s hefty fee may send content providers running. The New York Times and Washington Post are two of the big names objecting to Apple’s terms.
In addition to asking for a revenue cut that is way higher than what App Store publishers must pay, Apple is also asking for select publishers to commit to using the news platform for a minimum of one year. Developers are already calling for App Store fees to be reduced, so why would publishers give in to even worse revenue sharing? Should the news service take off as a success, offering a year’s worth of support is easy. Asking for longer term commitment of support on an untested service could be problematic for those that cannot afford to take a loss if it turns out engagement is low.
Apple is holding an event on March 25 that is believed to be the day when the new news service will officially debut. If that turns out to be the case, Apple has little time to waste in striking a better deal with major content providers.