Many publishers reportedly on board with Apple’s subscription news service
Apple has reportedly signed deals with many publishers for its upcoming subscription news service.
When reports surfaced of Apple wanting a 50-50 revenue split for its upcoming subscription news service, many analysts think that publishers would be reluctant to go on board. However, Recode learnt from its industry sources that many publishers have indeed signed deals with Apple.
The publishers believe Apple is going to spend a lot of resources on the subscription news service and get millions of people to sign up. Hence, the publishers are willing to have a smaller percentage of a bigger number than a bigger portion 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.”
Apple also created new deals for publishers after it acquired Texture. Unlike Texture's model where revenue was paid based on the usage of the titles generated, Apple is going to give publishers half of the subscription revenue the service generates. In addition, publishers are able to keep 100% of the ad revenue that their content generate.
Big newspapers such as the New York Times, the Wall Street Journal and the Washington Post, are not convinced by Apple. They already have solid digital subscription services and bundling their content along with everyone else in Apple's subscription news service will cannibalize what they have.
Apple is rumored to be holding an event on 25 March to launch the news subscription service. The video subscription service is said to be unveiled in April or May.
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