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Apple’s new News subscription service that hurts the newsmakers

Two big Apple things happened late yesterday, focused on new Apple News news (I’m looking forward to hearing Adam say that for you in the podcast).

What’s up?

  • The WSJ published a detailed look at Apple’s reported ‘Netflix for news’ subscription service.
  • It focused heavily on growing publisher pushback from the likes of the New York Times and Washington Post, who are not happy about the deal Apple is offering.
  • Why? Apple is asking for 50% of subscription revenue, a hefty, hefty tax, even for Apple. (Apple takes 30% of revenue from App Store developers.)
  • Then, later in the day, a leak via BuzzFeed News indicated that Apple has chosen March 25th as the day it will hold an event focusing on a subscription news service.
  • We’ve known it’s happening since early Bloomberg reporting detailed Apple’s acquisition and use of Texture, a magazine app!

Here’s what it means:

  • Remember a few weeks ago we reported that Apple makes a crazy 62.8% margin on its ‘Services’ offering, including the likes of Apple Music and iCloud subs? And that Apple wants to do more?
  • Well, here’s the more: some kind of Apple News subscription.
  • If Apple does this right, to me, it’s a no brainer to subscribe to. I feel like a lot of people actually do want to pay for quality news, and may even have a New York Times or Wall Street Journal subscription.
  • But, let’s be honest for a second, those subscriptions are painful.
  • There’s absolutely no secret that they are easy to sign-up for, with bonus deals and free months, but are difficult to quit.
  • Both the aforementioned subscription services require you to call to cancel, and deal with aggressive salespeople who make all kinds of offers to keep you on the hook. (I know, it happened to me with a WSJ subscription.)
  • Getting your publication straight into an app on close to a billion active iPhones (let alone iPads) is no doubt the carrot that Apple is offering.
  • So, in theory, Apple pulling together publishers, and creating a wider subscription base, does sound like it might work.
  • But, as the late great Douglas Adams said, “This has made a lot of people very angry and been widely regarded as a bad move.”

The Apple Tax:

  • If the reports are accurate, Apple wants to take half, then pool the other half of the revenue to distribute evenly to all publishers, creating a bit of a squabble.
  • Again, if the reports are accurate, Apple asking for 50% of subscription revenue is utter gouging. Even Apple, back at HQ, believing it could achieve this, tells us so much about how beholden we are to Big Tech.
  • And, as the Journal writes itself, many quality newspapers charge well over $10 per month for subscriptions. And Apple says it won’t share customer data.
  • So, selling subscriptions at much lower cost, then splitting that revenue with Apple, plus other publishers, seems like bad business.
  • What’s more, Apple might just change its mind! It can do what it wants, because it has incredible power.
  • Finally, it’s not like publishers and newspapers are rolling around in cash and could just throw Apple a bone. It’s dire out there, because advertising is Facebook and Google dominated.
  • But Apple does what is right for Apple, let us never forget.
  • And speaking of subscriptions, here’s a Stephen King story with a happy ending for a local paper (NYTimes).

PS. Here’s a breakdown of new New York Times subscriptions, via Axios:

  • You can see why the Times won’t just roll over on this Apple malarkey.
  • (Also, who knew a very good daily Crossword could help keep a media empire afloat?)

2. More leaks provide the best look yet at the LG G8 ThinQ (Android Authority).


3. Xiaomi to steal Samsung’s thunder with Mi 9 launch on same day as Galaxy S10? (AA)


4. It’s taken a while, but WhatsApp could finally let you reject group invitations (AA).


5. OnePlus is now a top-five high-end smartphone maker in the US, T-Mobile deal a big help (AA).


6. The profitable problem with fake Google Pixel 4 “news” leaks (9to5Google plus angry Android Police commentary).


7.  “Catastrophic” multi-level hack on email provider destroys almost two decades of data (Ars Technica).


8. So many people stole from Walmart that it had to quit offering cashier-less checkouts (Business Insider).


9. Meanwhile, Amazon is offering lockers at Coachella for direct-delivery (Engadget).


10. California backs down on high-speed LA-to-SF rail, cost blew out to $77 billion before it even really started (Engadget).


11. Oculus, a VR company, says that VR is going to be great in 2019. No, seriously, this is a good read on where VR is at (oculus.com).


12. Activision Blizzard lays off hundreds of employees (Kotaku). “While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” wrote the CEO in an announcement. That kind of statement might please investors, but doesn’t go down well with gamers.


13. Redditors of former Axis powers: How is WWI and WWII taught? (r/askreddit).


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