Apple is running into snags over financial terms in its negotiations with news publishers for its planned subscription news service, says The Wall Street Journal.
Apple’s so called “Netflix for News” service would offer all-you-can-read access to the content of participating news publishers for one monthly fee, said to be at around $10 per month.
The report indicates major new publishers are resisting Apple’s proposed 50/50 revenue split. Apple would take half off the top, and the remaining revenue would be split among publishers, “according to the amount of time users spend engaged with their articles.”
Publishers are also said to be reluctant to Apple’s requirement that it would control users’ email addresses and credit card information. That information is valuable to publishers, as they use it to create customer databases for marketing their products, and for sale to advertisers.
The New York Times and the Washington Post are two of the publishers that haven’t yet inked a deal with Apple for the service. Both publications have site paywalls and subscription offerings in place already. While The Wall Street Journal is also said to have similar concerns, its conversations with Apple have been described as “productive.”
The publications’ share of the $10 monthly fee paid to Apple would be much less than the fees the publications currently pay. The New York Times charges $15 per month, while The Washington Post’s tariff is $10 per month and The Wall Street Journal asks a hefty $39 per month.
It is feared current subscribers would cancel their direct subscriptions and they would switch over to the Cupertino firm’s much cheaper alternative. All three sites currently offer some of their content via the Apple News app, and offer subscriptions through the service, keeping 70% of subscription fees for the first year, while Apple takes 30%. Apple’s share drops to 15% in year two.
Apple is expected to launch the subscription service later this year as a paid option in the Apple News app. The company is also rumored to be including access to numerous popular magazines as part of the deal, using technology acquired in last year’s Texture acquisition.
Apple is rumored to be holding a March 25 event at its Apple Park campus to debut the news subscription service.
