By John Gruber
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Benjamin Mullin, Lukas I. Alpert, and Tripp Mickle, reporting for The Wall Street Journal (paywalled, as usual, alas):
Apple Inc.’s plan to create a subscription service for news is running into resistance from major publishers over the tech giant’s proposed financial terms, according to people familiar with the situation, complicating an initiative that is part of the company’s efforts to offset slowing iPhone sales.
Before we get to the Apple News subscription stuff, can I just point out that every single story about Apple this year frames every single thing they’re doing as an “effort to offset slowing iPhone sales”. This framing makes no sense. Does anyone think they’d be doing anything differently if last quarter’s iPhone sales had been slightly up rather than slightly down? And if you don’t actually know the numbers — that last quarter, although below expectations, was the second-best quarter for iPhone revenue ever, behind only the same quarter one year prior — this framing would lead a reasonable person to believe that iPhone sales are tanking.
I get it, Apple started banging the “look at our growth in Services” drum a few years ago because they’re running out of room for growth to even be possible in iPhone sales. And this Apple News subscription thing is definitely a service. But the context of this framing leaves a casual reader with a very wrong impression.
In its pitch to some news organizations, the Cupertino, Calif., company has said it would keep about half of the subscription revenue from the service, the people said. The service, described by industry executives as a “Netflix for news,” would allow users to read an unlimited amount of content from participating publishers for a monthly fee. It is expected to launch later this year as a paid tier of the Apple News app, the people said.
The rest of the revenue would go into a pool that would be divided among publishers according to the amount of time users spend engaged with their articles, the people said. Representatives from Apple have told publishers that the subscription service could be priced at about $10 a month, similar to Apple’s streaming music service, but the final price could change, some of the people said.
Apple keeping “about half” of this revenue is nuts. Given the margins in the news industry today, even Apple’s usual 70/30 split would seem a bit greedy, but half is insane.
★ Tuesday, 12 February 2019