Apple News+ is entering its ninth month as an “omnibus newsstand” with 300 publications, mostly magazines, available to subscribers in the United States, Canada, Australia, and the United Kingdom. The subscription service within the Apple News app is getting generally good marks by newspaper publishers for delivering pageviews, unique views, and subscriptions even as the broader industry continues to take a mixed philosophical view — including monthly revenue share results.
Newspaper publishers that have signed up for the service see Apple News+ as a reach extender beyond their premium subscription packages: not only numbers in the billions worldwide but also young readers and women. Reports of a broader Apple bundle with music, movies, podcasts, and news make the service potentially even more interesting.
What publishers are saying
INMA interviewed two of Apple News+’s newspaper partners — The Wall Street Journal and Los Angeles Times — to better understand their experiences since the March launch and the possibilities moving forward. Their optimism is in contrast with broader industry worries over audience ownership, revenue cuts and expenses, where content resides, and transparency with Apple.
“What Apple offers is potential scale” for publishing partners, Digiday reports: 1.4 billion Apple devices that are currently active, its savvy marketing, and the 5 billion monthly readers of its free product, Apple News. The Apple News app is included on all iPhones and iPads.
“It is still early days, but we know that 40% of those who see our headlines are clicking through to read us,” said Katharine Bailey, general manager/platforms and senior vice president of Wall Street Journal Digital. “As part of making the product differentiated, we look at top performing articles on (our) platform for prospects and subs vs. prospects and subs on Apple News+ and are seeing minimal overlap. We are also happy to report that we are attracting more women to our content on AN+.”
Although it’s been called a “Trojan horse” and “Netflix for news,” out of concern that the relationship will not be a good one for news providers, The Wall Street Journal and Los Angeles Times have found the results to date are within the realm of their expectations.
“We are pleased with the results to date from Apple News+,” Los Angeles Times Executive Editor Norman Pearlstine told INMA. “We are learning about the information needs of a large audience that appreciate our original, important, and surprising content.”
The Wall Street Journal expanded upon its early experiences: “Our original impetus behind this deal was to extend WSJ’s paid reach and to connect with audiences who otherwise might not have discovered us,” Bailey told INMA. “It was important that this audience represented a new one, ideally drawing in more women and younger members, without cannibalising our base. We wanted to do this with a partner that is a strong advocate for quality journalism.”
Despite early success signing up several hundred magazine publishers, Apple News+ had only three newspaper partners through most of this year: The Journal, The Times, and The Toronto Star. As of October, Apple had signed up the Journal’s sister News Corp units in the United Kingdom and Australia.
The Wall Street Journal has 1.8 million digital subscribers, and its base digital subscription price is US$37 per month. The Los Angeles Times has a reported 170,000 digital subscribers and a core offer of US$16 per month. By contrast, the Apple News+ subscription to 300 publications — including The Journal and The Times — is US$10 per month.
Pearlstine said the Los Angeles Times has found “the financial results to date are consistent with our expectations. We are optimistic that they will continue to grow in the months and years ahead.”
Meanwhile, Apple has not met aggressive projections about subscription and revenue, according to Engadget. Subscriptions started out fast with more than 200,000 in the first 48 hours of the app’s release but have been “stuck in neutral since that time.” Yet feedback from news publishers across newspaper and magazine media is that promised subscriptions, pageviews, and unique views are being delivered — even as revenue share is reported to be off the mark.
A rumoured Apple subscription bundle is a possible remedy to that while providing an ideal moment to make it more appealing to news publishers. Apple declined to comment about the possibility. But our conversation with The Wall Street Journal strongly suggests this possibility.
“We are hoping bundling helps us achieve even greater scale and reach to attract new audiences,” Bailey said. “Luckily, we have offerings on other platforms including podcasts like The Journal will help further engage those new audiences.”
Newspapers vs. magazines
The Apple News+ service is based on Texture, an app first developed collaboratively by magazine publishers and later bought by Apple. Because it was developed for magazine formats rather than newspaper formats, magazines are technologically favoured over news.
Yet even magazine publishers aren’t sure about Apple News+. Condé Nast CEO Roger Lynch told a media conference recently the “jury is out” on the news subscription service: “I hope Apple News+ is wildly successful. Whether it’s good for publishers like us or not is to be determined.”
The Wall Street Journal, for its part, “would love for there to be a greater distinction between the magazines and the daily newspaper product in Apple News+. Given the habits around each are so unique, reflecting a lean back vs. more timely pattern of consumption, we hope the user experience evolves further to promote those different habits,” Bailey said.
Apple’s proprietary format for news and ads can make it difficult for smaller news brands to be surfaced. Even larger outlets like The Wall Street Journal report “we [are looking] forward to taking bigger swings on the advertising side, and are hoping Apple relaxes its rules on formats and other elements that could positively influence direct selling,” Bailey said. “We would like to see advertising capabilities evolve alongside the core user experience.”
News industry concerns
Industry observers who have not signed up for Apple News+ have expressed concerns regarding audience ownership, revenue and expense, content, and transparency. While some issues are Apple-specific, the core theme that emerges is the broader philosophical question of whether publisher content should reside outside the publisher’s environment:
1. Audience ownership
Distilling feedback about audience ownership boils down to three issues:
- Habituating off-platform: When New York Times CEO Mark Thompson spoke to Reuters in March 2019, he said: “We tend to be quite leery about the idea of almost habituating people to find our journalism somewhere else.”
- Loss of control over customer relationship: The arrangement with Apple confronts publishers with the possible loss of both customer relationship and subscriptions at a time when some news companies are shifting from advertising- to subscription-driven revenue models.
- Value proposition on Apple News+ vs. publisher: Readers have no clear indication what news publisher content they won’t see within the app, which may lead them to believe that there is no longer a need to pay for a full subscription. And Apple promotes the product as offering an approximate US$8,000 savings in consumer subscriptions annually for only US$10 per month.
2. Revenue and expense
Then there are the economic vises of revenue vs. expense:
- Revenue splits: Apple takes 50% of the Apple News+ monthly subscription price. That’s 20% more than it takes from music and other app publishers. The remaining 50% is divided among magazine and newspaper publishers based on how much time readers have spent with each publication’s content. Apple did not comment on why this is. Whether subscription volumes will increase enough to justify low revenues is unclear. It is the revenue split inside this back-end 50% that has some publishers concerned and in “wait-and-see” mode.
- Incremental expenses: There can also be associated expenses with hiring staff to manage the relationship, create content, and keep up with algorithm change. For example, The Wall Street Journal has hired 50 contract journalists for a period of no more than a year, which may be “a compromise approach — as it gauges the benefits and costs of the Apple partnership.”
Apple News+ represents a potential opening of what TechCrunch calls a “massive hole in news site paywalls” that allows their best premium articles to “escape.”
Further, the current iteration of Apple’s combination of algorithmic and human curation fails to surface local and regional news and means publishers have no control over placement of their news. The app mixes up news from different titles, which makes it hard for the reader to know where their news is coming from and diminishes publishers’ branding efforts. Publications most likely to earn revenue are those that are most visible, TechCrunch points out. Needless to say, some stories will be at the top and some at the bottom. Placement decisions are made by a combination of human and algorithmic curation, depending on the type of news.
Meanwhile, Apple is not disclosing the terms negotiated with different publications. The New York Times reports not all publishers have unequal negotiating power around, for example, such issues as exit options should the app not live up to expectations.
The amount of content revealed may differ among publications. For example, The Wall Street Journal is said to be developing content specifically for the platform, as well as making only some content visible. Although all of its content can be accessed via the platform with a three-day archive, The Journal may be betting most of Apple News+ readers will seek different content than its usual demographic. On the other hand, the Los Angeles Times content is all visible.
It is unlikely news publishers are going to find a perfect fit with any of the major platforms. And while there are still drawbacks to the Apple News+ service, it does rank above those that haven’t stepped up to pay for content, and it leaves publishers feeling that they’re in friendlier territory — even if it is a territory dominated by publishers of a different stripe.
And for other news publishers that are considering a go with Apple, The Wall Street Journal’s Bailey had these recommendations: “Be clear on your goals. Hone in on the audiences you have and the ones you want to gain. And create a content proposition that reflects this.”