Apple's upcoming Spotify-style magazine subscription service, an all-you-can-eat offer of dozens of publishers, will only pay the media partners 50 percent of revenue, according to two leading publishers from various companies with knowledge of the agreement.
Apple plans to take half of the revenue from $ 10 monthly subscriptions to the magazine so publishers can share the rest based on how many read their stories. "It's a scary deal," said a publisher, who spoke on condition of anonymity. "It seems greedy."
Publishers spoke on condition of anonymity for this story because they were not authorized to speak publicly about the terms of the agreement. Apple has not returned a comment request.
Apple's new subscription media service is expected to launch the spring, an outgrowth of last year's acquisition of Texture, an app founded by traditional media giants, including Condé Nast, Hearst and Meredith. Textures gave digital subscribers full access to hundreds of magazines that were posted as they look on the print. Apple is reworking the experience and is expected to make it more dynamic, like Apple News. From now on, Texture is not much more than a digital recreation of the print product.
"It feels like a blow to the nose, to hear the [revenue sharing] numbers," said Jason Kint, CEO of Digital Content Next, a trading organization that speaks for traditional media companies. "There is considerable concern about how the platforms squeeze oxygen out of the media ecosystem."
Apple's terms are expressed in a time of mass layoffs in the digital media field. Over the past month, BuzzFeed, Vice and Verizon Media, which own HuffPost and other websites, have cut about 2,000 jobs. In the past year, Texture originators Condé Nast, Hearst and Meredith have all had to reduce employees.
Condé Nast, Hearst and Meredith all rejected comments on this story, but they are expected to be part of the new Texture.
The challenges of the publishing industry are well documented ̵
Apple has taken another approach to how it presents news and sells digital ads. For example, in Apple News, it restricts data collection and ad targeting, and maintains editorial control over what is presented there.
"We've appreciated Apple's concern and leadership on a number of publisher issues over the past year," Kint says. "It would be nice to see that they took some actual leadership in the industry economy and recognized the value of the news and entertainment they help distribute."
Some publishers say they doubt Apple can deliver money and the public it's been promising for the subscription service. The skeptical publishers point to the original Texture that didn't work – as evidence, the concept is shaken. Publishers say the revenue was small and the app itself sputtered through several incarnations before being sold to Apple.
But Apple claims partners can do 10 times more than they did with the old app, according to publishers. A publisher said Apple had estimated it could cost about $ 2 million in the first year, which seemed "very optimistic."
"I don't see how they get that kind of commitment to get so much income," the publisher says.
Apple is thinking of combining the magazine with other media subscriptions because it also has Apple Music and it plans to uncover a new one. streaming television service in the spring. Apple has suggested that more services can be promoted together, according to the publishing expert.
However, publishers are cautious about committing to the magazine folder for several reasons, not just the 50 percent portion.
, Apple is a mysterious company, and it has not fully explained the formula for how it will calculate which publishers receive that portion of the revenue. Apple also holds user data near the west, and publishers will not get the direct relationship with the reader.
Publishers will grow its own subscription base and not share it with other publishers and Apple. Publishers already have Apple News, which is not a big moneymaker, but there is a large audience there.
Apple News ti Approximately 90 million readers a month, and it's still unclear how News and the subscription service will interact. At the moment, the subscription service looks at the magazine industry, while Apple News contains content from publishers, newspapers, TV news sites, and magazines. However, Apple has asked newspapers like The New York Times to participate in the subscription service, as well, according to publishers.
Apple News recently evolved, giving publishers more flexibility to sell their own ads and manage their content. as they do on their own websites. For example, publishers can insert payment paths into Apple News, cut off readers for a certain amount of articles, and receive a message to subscribe.
If readers sign up for the Apple Magazine subscription and a publisher enters the content there, readers would have little incentive to also pay for subscriber's own property.