What does Apple’s subscription service mean for publishers?

In the last few years, platforms like Facebook and Google have stepped up to offer publishers tools for selling subscriptions and driving revenue, albeit to mixed success at best.

If any platform could placate publishers, it seemed, it would be Apple. As publishers soured on other platforms, Apple has quietly positioned itself as a friend to publishers. Apple News has gained favor with publishers for its willingness to collaborate with publishers, as well as its ability to drive tons of pageviews, if not revenue.

So if publishers have seen minimal ad revenue from Apple News, how much subscription revenue can they expect? That’s one of many questions on the minds of publishers as the expected announcement of Apple’s subscription service looms.

Apple’s New Subscription Product: A “Netflix for News?”

After Apple bought digital magazine subscription service Texture last year, it was only a matter of time before Apple put it to use in its own subscription product. Now, it seems, we’re just weeks away from its rumored unveiling on March 25As the Wall Street Journal reports,

“In its pitch to some news organizations, [Apple] 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 subscription revenue will reportedly be split between participating publishers based on the engagement their articles earn.

Given that Apple won’t announce the service until March 25, these terms are subject to change, but that hasn’t stopped a slew of strong opinions.

What do publishers think about Apple’s subscription service?

Apple News currently takes 30% of subscription and ad revenue it generates, (unless publishers sell ads directly, which isn’t without its challenges), and publishers and pundits alike have balked at the prospect of a deal demanding even more.

WSJ reports that the Washington Post and New York Times have already indicated their hesitation to participate—not that they need to. With brand recognition, global audiences, and healthy newsletter programs, they’re driving plenty of subscriptions without having to give Apple a cut.

Elsewhere, Recode reports that Apple has already signed many publishers to the upcoming service. Why? The more optimistic of these publishers hope that Apple does for news what it did for music. With Apple Music preloaded on every iOS device and a heavily-marketed free trial offer, Apple Music skyrocketed from 0 to 56 million paying subscribers in just a few years. With enough subscribers in the pot, some publishers argue, maybe a 50% share isn’t so bad.

Will Apple subscriptions pay off for publishers?

When Apple commands 60% of the smartphone market, perhaps it’s not out of the question for Apple to quickly rack up subscriptions. But it’s risky to pin a business model on that hope, especially when platforms have upended publishers before. In the past, Facebook has promised publishers revenue from live video and longform video content before shifting priorities and leaving publishers without the revenue they came to rely on.

Columbia Journalism Review notes the existential cost of ceding control to another platform, even a historically-friendly one:

“Apple News has enormous reach (more than 90 million readers, according to recent estimates) and that makes it seem hugely appealing to struggling publishers, many of whom have watched their advertising revenue plummet as Google and Facebook have taken over the industry. But the price of this deal isn’t just 50 percent of the revenue; it’s also the incalculable cost of yoking your business and potentially your survival to a third party, one that—for all its heart-warming statements about a commitment to journalism—has its own commercial interests in mind. Never build your house on rented land, someone once said.”

Undoubtedly, Apple can drive subscriptions, but these subscriptions are worth far less to publishers than direct ones, and not just because Apple owns half of the revenue. Apple also owns the customer relationship. Publishers will need to decide whether the subscription revenue bump is worth this. For some, maybe it will be; for others, a focus on direct reader relationships elsewhere will pay off.

Apple and Your Audience Relationships

Even now, part of the price of driving subscriptions with Apple is that you don’t get direct access to your subscribers—not even so much as an email address.

When email is an important factor in subscriber retention, this can be more costly than it seems. Email gives you a direct way to reach your readers outside of the platforms, where you can engage them with the content they enjoy, help them discover new content to consume, and nudge them when their engagement starts to fall off. Without the direct reader relationships cultivated by email, publishers can be left without this critical component of paid subscription success.

Stratechery also points out that Apple’s reported pay structure rewards article views. Subscription-based publishers are incentivized to create high-quality, differentiated content that readers deem worthy of payment. If Apple pays out based on engagement, it skews the incentives, potentially causing publishers to revert to chasing platform clicks with mass-appeal content. In that sense, prioritizing Apple success could cause a shift in content quality, potentially cannibalizing the direct relationships already established.

These relationships will be everything, especially if Apple ever decided to shift its publisher strategy.

Turning Views on Apple News into Direct Relationships

Whether you participate in the subscription program or not, you may derive indirect value from Apple News by using the platform to drive site traffic, where you can then build direct relationships.

After all, Apple News drives tons of pageviews; being featured among Apple’s mix of selected articles can easily make a story a publisher’s most-read article for the month. But how good are your chances of getting featured?

Northwestern University audit of Apple News content found that the platform tends to favor a select few publishers and topics:

“Our extended data collection and analysis of content suggested a skewed source distribution, with just three sources accounting for more than half of unique stories observed (top one being Fox News). The results also indicate that Apple News Trending skews towards soft news such as celebrity, fashion, entertainment, and sports…”

Rather than count on Apple to deliver steady streams of traffic, you can take advantage of any fleeting moments of success on the platform to kick off lasting relationships:

  • Invite readers to sign up for an email newsletter within the text of the article.
  • End articles with a newsletter call-to-action that corresponds with the article’s content. This could be for a newsletter that offers similar content, or even a way to subscribe to updates on that particular story.
  • If you have a paid subscription product, get strategic about what articles are available for free and what articles require a subscription to view.
  • Experiment with making part of the article viewable in Apple News, then asking readers to visit your site to read the rest of the article. There, you can collect the ad revenue (and maybe even their email address as well).

While a “Netflix for News” may not deliver the revenue of its namesake, it may help you to cultivate a few engaged readers who will binge on your content.

Melanie Angel
Editor, PostUp PlayBook

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