News publishers are not happy with Apple Tax application, news link redirection

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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We wrote not too long ago about news publisher concerns over recent moves by Apple. Those include: 

  • Unequal application of requirements to pay what they consider a usurious fee of up to 30%, nicknamed the Apple Tax, if they want to sell subscriptions via Apple’s in-app purchase system. 
  • Changes to the iOS that would force users to opt back in to data sharing with publishers, even in the face of an ongoing relationship.

Publisher links hijacked 

This month, Apple’s new iOS 14 and Mac OS Big Sur upgrades, now in public beta, also made headlines because Apple News+ will now bypass publisher Web sites. This comes at a time when the reputable rumour mill is running at full tilt about the likelihood that Apple Music, News+, TV+, Arcade, and iCloud becoming one giant bundle. 

According to Digiday, “Under the changes [to MacOS and iOS], Apple News+ subscribers who are browsing the Web using Safari will be redirected into the Apple News+ app, rather than the participating Apple News+ publisher’s Web site.”

What’s New in Publishing also commented: “Not only does Apple’s traffic redirect reduce the ad revenue publishers make on their own sites, but it also renders readers invisible to most Web analytics tools. Apple is effectively scooping publisher’s audiences up into their own walled garden, and it’s not inconceivable that they would extend this to the wider News product.”

Quoting Corinne Podger, a media development consultant based in Australia, the article continues: “This could turn out to be a passion-kill for publishers considering joining News+. Moves like this send a discomfiting message at a time when publishers’ profit margins are under enormous pressure and when regulators are looking at forcing other Big Tech companies to increase financial support to the media rather than walking it back.”

Apple CEO Tim Cook testifies for the U.S. House Judiciary Antitrust Subcommittee.
Apple CEO Tim Cook testifies for the U.S. House Judiciary Antitrust Subcommittee.

Not everyone pays the same 

In a letter to Apple’s CEO Tim Cook, Jason Kint, CEO of the U.S. news publisher trade association Digital Content Next, spoke to Apple’s inequitable treatment of news publishers, vis-à-vis Amazon in particular. The letter followed testimony about the App Store in recent antitrust hearings before the U.S. House Judiciary Antitrust Subcommittee, when Cook said Amazon’s arrangement and lower fees are available to “anyone meeting the conditions.” 

“I am reaching out to you to better understand the conditions you mentioned in your July 29th remarks. … We would like to know what conditions our members — high-quality digital content companies — would need to meet in order to qualify for the arrangement Amazon is receiving for its Amazon Prime Video app in the Apple App Store.” 

In a DCN blog post, Chris Pedigo, senior vice president of government affairs, explained that the Amazon-Apple arrangement began in 2017, when the two struck a deal that would allow Amazon Prime Video to be available on Apple TV and Apple products likewise on Amazon: “Apple agreed to reduce its fees for consumers who subscribed to Prime Video from 30% to 15%. For existing Prime Video subscribers, Apple agreed to completely waive its normal 15% fee. The cherry on top for Amazon was that they could use other payment systems outside of Apple.” 

By contrast, The Wall Street Journal reported: “App developers, including news publishers, pay Apple 30% of the revenue from first-time subscriptions made through iOS apps; that commission is reduced to 15% after the subscriber’s first year.” 

The association, whose members include The Washington Post, The New York Times, Axel Springer, The Philadelphia Inquirer, Gannett, and News Corp, argues that together, the brands it represents have “an unduplicated audience of 223,098 million unique visitors or 100% reach of the U.S. online population.” The letter was cc:ed to the U.S. House of Representatives Committee on the Judiciary.

According to CNBC, Apple declined to comment on DCN’s letter. However, the article reported, “Apple has previously defended its treatment of Amazon, saying the firm is part of a programme for ‘premium’ video subscription services to offer integration with core Apple services, apps, and features. It claims that this programme is only for individual purchases, not subscriptions.” 

Maribel Perez Wadsworth, president of the USA Today Network and a member of INMA’s Digital Platforms Initiative Committee, had this to say: “If true, I would expect all news publishers would be very interested to understand under what conditions they too may receive the same preferential treatment as is reportedly the case for Amazon. Retaining a greater share of subscription revenue is important to sustaining quality local journalism.” 

Another publisher suggested to INMA that using duopoly status in the OS, App Store, and browser to advantage your own product or make money on competitive products is anti-competitive. 

“Apple has gone some way to pay news publishers for content on Apple News+, but there is more that they could do to support a sustainable news media industry,” said Earl J. Wilkinson, executive director and CEO of the International News Media Association (INMA). “Apple does not take a share of the revenue that flows through the Uber IOS app, nor do retailers pay a percentage of their takings for everything sold online via IOS apps. With the very survival of journalism in communities throughout the world under threat, why Apple charges news media companies at all is more to the point."  

According to DCN’s Kint, “Nearly all of DCN’s members offer apps in the Apple App Store and, as noted above, many offer subscription-based access to a wide variety of content. The terms of Apple’s unique marketplace greatly impact the ability to continue to invest in high-quality, trusted news and entertainment particularly in competition with other larger firms.”

About L. Carol Christopher

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