The Supreme Arrogance of Apple’s Publishing Subscription Plans

The Supreme Arrogance of Apple's Publishing Subscription Plans

There’s a cliché phrase, “If at first, you don’t succeed, try again”. Apparently, that’s how Apple feels about publishing, because they’re convinced their prior explosive failure at eBooks was a one-off, and they’ve got a great new subscription plan in the works. I’m sure publishers will love … wait, giving a 50% cut to Apple? Does Tim Cook have a head injury?

Let’s dissect the terms for a second. Per the Wall Street Journal, here’s what Apple is proposing:

  • $10 a month for access
  • Apple gets 50%
  • Publishers split the rest depending on views

So this is awesome as a consumer of news, but there are a number of reasons publishers are understandably very wary. First of all, this presupposes that the major news outlets are struggling to get people to pay for their paywalled content. Second, it assumes that they feel their best option is to take a sliver of a cut from Apple. Off the top of my head, news outlets can do the following: bundle print and digital editions, offer yearly pricing that cuts the annual cost, combine memberships (like Amazon Prime/Washington Post), offer student pricing, and of course, teaser pricing that’s significantly lower for a short period before increasing. All of those are tools that news outlets can use to get their subscribers up and more eyeballs on articles, and none of them require handing the keys to their publishing kingdom to a third party. Also, as a side PSA, check your local library, as they may have digital access for users as well.

The point here is that Apple is offering an incredibly raw deal to publishers who are in reasonably good shape. If you’re a struggling publisher, sure, any offer is better than nothing. But it’s the height of arrogance that Apple thinks the Washington Post, Wall Street Journal, and New York Times are going to go all in on such a skimpy offer. Also, you’d think after the nasty licking they took in eBooks, they’d be more conciliatory and less aggressive with their offers.

[For anyone who’s forgotten the late, “great”, iBooks debacle, Apple was involved in a plan where eBook prices were fixed by publishers, with zero ability for retailers to set prices or offer discounts. It ended with a legal mess and a whole bunch of consumers getting money back from settlements.  Basically, it was a big fail for Apple.]

I’m assuming the same negotiators are working on Apple’s “streaming video” service, because for reasons that I can only assume involved engaging in really excellent drugs, Apple is asking for a 30% cut in exchange for combining outside subscriptions with their own. In other words, if you’d like to access Netflix, one of the most ubiquitous streaming services on the planet, through your Apple streaming subscription, you can … but Netflix will only get 70% of the revenue they would receive if you had paid them directly. Unsurprisingly, Netflix, HBO, and Hulu have all told Apple they’re not interested. I have so many questions about why Apple thinks that’s a compelling concept for a content provider. Here’s the thing: I’m sitting here writing this post while binging “One Day At A Time” on Netflix. I’m watching it on my Amazon Fire TV, which not only offers me Netflix but also lets me search in Netflix right from the main screen. I can also watch Netflix on my Chromecast. Or my iPhone. Or my computer. We’re basically one minor screen technology jump away from Netflix on graphing calculators. So what possible benefit could Apple offer Netflix to compel them to slice 30% off their revenue?

I could be wrong. Apple has had a lot of success in music, but they’ve struggled mightily with recreating that success since then. They have also burned a lot of bridges with their eBook debacle, and I can’t help but think that’s on the minds of publishers turning Apple down. Maybe they’ll pull this off, but no business is going to fork over 30-50% of their potential revenue without a REALLY compelling story … and Apple doesn’t seem to have that going for them right now.

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About the Author

Zek has been a gadget fiend for a long time, going back to their first PDA (a Palm M100). They quickly went from researching what PDA to buy to following tech news closely and keeping up with the latest and greatest stuff. They love writing about ebooks because they combine their two favorite activities; reading anything and everything, and talking about fun new tech toys. What could be better?

2 Comments on "The Supreme Arrogance of Apple’s Publishing Subscription Plans"

  1. I think I’m going to withhold judgement until we know for sure that this story is true. It’s very possible that the WSJ is getting some details wrong.

  2. I subscribe to several publications – NYT, WSJ, Washington Post as well as my local newspaper. Some of these sites have crazy expensive subscription options and I’m only subscribed based on my daughter’s school offering a “free” (aka built into tuition) subscription.

    I feel $100/year is the sweet spot for online publication pricing. There also must be an easy way to unsubscribe without using an overseas call center and being subjected to a laundry list of better offers (Tip: Many of these publications offer significantly better deals when you tell them you are going to unsubscribe)

    What publishers are getting wrong is:
    – Crazy pricing which forces their readers to research how to get a reasonable price
    – Blatantly spammy page layouts – 1 block of content, 3 ads, 1 block content, 3 more ads
    – Clickbait headlines which lead to content clearly written solely to serve ads

    The major publications tend not to have the spam/clickbait problems. But my local newspaper has the problem and lots of second tier publications do a well. I think all that does is condition people to avoid lower-quality spam sites (basically ad farms).

    To the extent that Apple News can clean this up – I’m all in for $10/mo
    To the extent that Apple News just re-packages some of these low quality sites and still allows them to continue their spammy ways – no way no how I’m spending $10/mo

    BTW, Apple bought Texture and already has the magazine side of this mostly in place. I think the Texture fee is also $10/mo. This seems more like Apple wanting to pull in some newspapers – which Texture doesn’t presently have.

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