Apple wants a 50 percent share from the total revenues generated by publications that sign up for its upcoming premium news subscription platform. This demand might seem insane at first but as per Recode, many publications have already signed up for it.
Apple is currently calling this news subscription service Texture and it plans on launching it as a premium service at an event on March 25, with a monthly subscription fee of $9.99. It will be a premium version of Apple News where users can subscribe to it and gain access to a bunch of paid publications.
While Apple’s demand of a 50 percent revenue share is downright insane, many publishers are happy to sign up for it because they think that with Apple’s reach, millions of people will sign up for the service. This, in turn, will lead to a bigger payout despite the company itself taking a 50 percent chunk of the total revenue.
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.”
Many publications have signed up for Apple’s upcoming premium news service because the latter is going to spend a lot of money promoting the service which in turn will attract new customers.
However, major newspapers like the New York Times and the Washington Post have still not signed up for Apple’s service. These publications have built their own subscriber base over the year and they are not interested in throwing it away and working with Apple on a platform owned by the later.
Do note that Apple is only taking 50 percent cut from the revenue generated via subscription. Publishers are free to keep any money they generate using ads to themselves.
Nonetheless, Apple’s demand is in stark contrast to that of Facebook which does not take any cut from publishers selling their subscription using its platform. Plus, Apple’s 50 percent revenue sharing demand is different from the way it shares revenues with the likes of HBO, Spotify, and others that sell a subscription service through the App Store. In such cases, Apple lets them keep anywhere between 70 to 85 percent of the total revenue generated. Even for Apple Music, Apple pays out artists 70 percent of the revenue generated and only keeps 30 percent to itself.
While many smaller publications and newspapers will sign up for Texture, it is unlikely that major newspapers will give in to Apple’s 50 percent revenue sharing split demand.
[Via Recode]
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