The “Apple Tax” is a notorious element for the App Store and the applications available within it. While there are some alterations to the standard 30% that Apple takes, it may be even higher for an Apple News subscription service.
Apple is planning on launching a new subscription service later this year, this one focused on news. At least, that’s the expectation. But a new report from The Wall Street Journal details why Apple may be having a bit harder of a time than it wanted in actually launching the product. The reason? Hardball negotiations.
According to the report, publishers and Apple are not seeing eye-to-eye when it comes to how much money Apple, or the publishers themselves for that matter, should be getting from the content they are distributing. As it stands right now, it sounds like Apple is asking publishers to fork over 50% towards Apple. That’s quite a bit higher than the standard 30% that the Apple Tax has asked for in the App Store proper.
This new service is expected to be a “Netflix for news” effort, so Apple is trying to make it as lucrative for users as possible with a variety of content. However, Apple has yet to sign on huge publications like The New York Times and The Washington Post because the publishers aren’t eager to agree to Apple’s terms.
If they do, then it would be Apple getting 50% of the revenue, and publishers would split the other 50% “according to the amount of time users spend engaged with their articles”. As it stands right now, even The Wall Street Journal is balking at the demands, but apparently talks with that publication are “productive” for now.
The monthly subscription model is not new. The publications that Apple is trying to sway into the News ecosystem offer their own options. The NYT, for example, charges $15 per month for a subscription to its content. The WSJ, meanwhile, offers a monthly subscription fee at $39 per month.
Apple is rumored to be charging $9.99 per month for the News subscription service, which is expected to launch later this year. Apple could also charge a bit more money per month as it offers up a bundled magazine subscription service, thanks to the Texture acquisition it made. Back in June it was also rumored that Apple would offer a huge bundle with News, magazines, as well as the upcoming movies and TV programming.
50% is a pretty big ask, especially considering Apple News in its current form doesn’t seem to be all that widely popular. However, maybe a subscription service, with even more content available as a result of that, could help it take off. Maybe Apple sees the potential here and is just trying to hammer down as much of the recurring revenue as possible to something it thinks will be wildly popular.
How often do you use Apple News right now?[via WSJ]