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The Early Math From Apple News+ Isn't Looking So Hot for the Media

Apple News+ could fill just a fraction of the tens of billions in annual revenue that the media industry has lost to tech giants.

by David Uberti
04 April 2019, 12:00am

This article originally appeared on VICE News in the US.

Apple has attempted to position itself as an antidote for a media industry consistently burned by tech companies like Facebook and their ever-changing algorithms for surfacing news. But human editors select stories for Apple News — and a just-launched subscription service, Apple News+, promises to share revenue with cash-strapped publishers.

Back-of-envelope math from early signup numbers, however, illustrates how difficult it will be for publishers participating in Apple’s premium offering to make a buck.

Launched on March 25, Apple News+ drew about 200,000 new users in its first 48 hours, an Apple spokeswoman confirmed to VICE News. It’s an explosive start suggesting the platform’s subscriber base could soon rival the largest media organizations’ individual totals. The New York Times first reported the numbers.

For $9.99 a month — less than the cost of many newspaper subscriptions — readers can access journalism produced by about 300 outlets, including magazines like The New Yorker and Elle as well as news outlets like The Wall Street Journal and The Los Angeles Times. After Apple takes a 50 percent cut of the money generated, publishers split the rest based on the time users spend with their content.

The economics are unforgiving: Every 200,000 users to Apple News+ translates to just $12 million a year — or $40,000 apiece if all 300 publishers took an equal share. The numbers suggest that the new partnership could fill just a fraction of the tens of billions in annual revenue that the media industry has lost since tech giants have come to dominate the digital advertising market.

Participants are betting that the money could help them tap into more than 1 billion Apple users worldwide and diversify their companies’ revenue streams. The fear — apparently shared by newspapers like The New York Times and Washington Post, which declined to join the program — is that Apple News+ could also undercut in-house subscription efforts that are increasingly seen as a means for survival. Apple would step between those publishers and their audiences without sharing crucial data about paying customers.

The “Apple digital kiosk is a terrible deal for the news industry,” wrote digital media analyst Frederic Filloux, arguing that magazine partners would devalue their content. “No wonder most newspaper publishers won’t join.”

Apple News+ is sure to grow much larger in the coming months, with greater scale translating to bigger payouts for partners. And despite having shellshock from many lackluster partnerships with Silicon Valley giants — including Facebook Instant Articles, Google Accelerated Mobile Pages, and Snapchat Discover — some publishers hope to eat a much larger piece of Apple’s pie.

The Wall Street Journal, for example, reported last week that it would add up to 50 newsroom staffers focused on Apple News+. Supporting a multimillion-dollar investment like that would likely require not only subscription totals that reach several million but also a disproportionate share of engagement on Apple’s platform. A full-priced digital subscription to the Journal itself costs $39 a month — almost four times Apple’s more expansive service.

Cover image: Apple CEO Tim Cook waves while walking off stage at the Steve Jobs Theater after an event to announce new products Monday, March 25, 2019, in Cupertino, Calif. (AP Photo/Tony Avelar)