Recode’s Peter Kafka takes a closer look at the stories surrounding Apple’s plan to create a Netlfix-for-news, whereby publishers will get just 50% of revenue. Apple, naturally, would get the rest.
It’s a plan that was met with some derision in media circles. Fifty percent for content Apple had no part in creating seems a bad deal on the face of it. But, Kafka writes:
Apple has already signed many publishers to deals where they’ll get 50 percent of the revenue Apple generates through subscriptions to its news service, which is currently called Texture and will be relaunched as a premium version of Apple News this spring.
And some publishers are happy to do it, because they think Apple will sign up many millions of people to the new service. And they’d rather have a smaller percentage of a bigger number than a bigger chunk of a smaller number.
In the words of a publishing executive who is optimistic about Apple’s plans: “It’s the absolute dollars paid out that matters, not the percentage.”
Basically: if you’re a big publication that already attracts paying subscribers on the strength of your brand, teaming up with Apple would be giving money away.
But if you’re a smaller publication, this is an opportunity to make good non-advertising money by being thrust in front of millions of iPhone/iPad users you’d ordinarily not reach.
This could be great news for niche publications doing terrific work.