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Three Obstacles Apple's rumored news service must overcome



Apple's plans to launch a news subscription service are at this time an open secret. Less than a year ago, the company announced the acquisition of existing magazine subscription service Texture, which Apple's executive Eddy Cue quickly revealed, would be folded into the existing Apple News app.

Since then, the news service has mostly been absent from the spotlight, generally taking a back seat to the more prominent news leaking around Apple's upcoming video streaming service. But as the latest reports have begun to filter out that the news service and television service may be announced by Apple in the same event in March, combined with rumors of the revenue distribution between Cupertino and its periodic partners, the news service is suddenly back in front of the seat, so it is The challenges it will face when it finally sees the light of day.

Take a Subscription and Split

The big news of the past week, of course, has been that Apple has jockeying for a 50/50 revenue share with its news partners. It has got many people up in arms like what is perceived as an outrageous demand from Apple, especially compared to the 70/30 split that the company takes from most of its other partners. But as always, the situation is more complicated when it first appears.

As Recodes Peter Kafka reports, some publishers have already signed up, and more than happy to fork over 50 percent of Apple's revenue, because they see 50 percent of anything better than 1

00 percent of nothing. The protesters are understandably enough publishers who have already succeeded in converting readers into paying customers alone, such as the Washington Post, the New York Times and the Wall Street Journal.

  Apple buys texture Apple

Apple

But should the high-profile publications reject Apple's terms, it raises the question of what a news subscription service lacking any of the country's most popular newspapers will look like. The answer seems to be much like the original Texture, which … was not so hot in the first place. But of course, the new service will be available in an app that is installed by default on all Apple devices, which is nothing to savor.

Publishers count on the time-consuming strategy: make it up in a large volume of customer. In fact, Apple News is already sending traffic to websites, less than four years after its launch. It only happens to be the traffic that, as Shale's Will Oremus pointed out this fall, doesn't really translate into money for the publisher. A subscription service can help offset it.

Beyond the monetary aspect, some publishers are also concerned that the great weight of Apple's user base could quickly make Apple News a dominant platform to be taken into account . (Granted, one might argue that a similar situation exists with Facebook now, but perhaps even less lucrative for publishers.) But if Apple's news service eventually becomes as dominant as some of its other offerings, the question is whether publishers can afford not to join?

The price we pay

Specify exactly how much publishers can reap from the service, there are also questions about how much users are willing to shell out for a news subscription service.


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