Apple news biz not so tempting
Apple’s plan to create a subscription service for news is running into resistance from major publishers over the tech giant’s proposed financial terms, according to people familiar with the situation, complicating an initiative that is part of the company’s efforts to offset slowing iPhone sales.
In its pitch to some news organizations, the Cupertino, Calif., company has said it would keep about half of the subscription revenue from the service, the people said. The service, described by industry executives as a “Netflix for news,” would allow users to read an unlimited amount of content from participating publishers for a monthly fee. It is expected to launch later this year as a paid tier of the Apple News app, the people said.
The rest of the revenue would go into a pool that would be divided among publishers according to the amount of time users spend engaged with their articles. Representatives from Apple have told publishers that the subscription service could be priced at about $10 a month, similar to Apple’s streaming music service, but the final price could change, some of the people said.
The New York Times and the Washington Post are among the major outlets that so far haven’t agreed to license their content to the service, in part because of concerns over the proposed terms, which haven’t been previously disclosed, according to the people familiar with the matter.
Talks are ongoing, and deals with the publishers could still be reached.
The Wall Street Journal also has concerns, but its recent conversations with Apple have been productive, one of the people said.
Another concern for some publishers is that they likely wouldn’t get access to subscriber data, including creditcard information and e-mail addresses, the people said. Credit-card information and email addresses are crucial for news organizations that seek to build their own customer databases and market their products to readers.
Shares of Apple rose $1.46 Tuesday, to $170.89.