Apple's "Netflix for News" subscription service hasn't launched yet, but a new report from Wall Street Journal suggests that the tech company sees 50 percent of the revenue from the new service. The paid Apple News service is said to work much like Netflix or Hulu does for TV shows. Users would pay a single monthly fee to Apple and access a wide range of paid news sources and magazines that are all tied together.
But Apple is obviously in trouble with publishers over how much of the money (rumor to be $ 10 a month per subscriber) comes back to the content creators. According to WSJ Apple currently proposes deals where it would retain half of its revenue, while the other half would be split based on how much time users spend reading each publisher's content. The model is similar in ways that Spotify has calculated payments by artists previously based on overall listening times.
WSJ especially claims the proposed price spreading large news sites such as New York Times and Washington Post have not yet approved license content for the service. (For its part, WSJ also calls their own calls with Apple well.) Publishers are also concerned that they would not have access to subscriber data with Apple's news service, depriving companies of email and credit card information that is the key to marketing efforts, which leads to a different position.
We've also been on this road before ̵
Add to the press is that Apple's paid news service comes at a critical time for the company, one who has seen the iPhone sales decline and a new emphasis on services as a major source of revenue for the company. Apple News comes pre-installed on each of the billions of iOS devices in the world, and even converting a fraction of those users to ongoing paid subscribers would be a huge addition to Apple's service business.
It's a strategy that the company has already used to achieve great success with Apple Music, leveraging its first-class positioning to offer real competition to Spotify. Taking a similar coup with News and its 90 million users would be the key to the company's future – but it must have convincing content, from partners who know the deal is worth it to achieve it. Requesting that already-justified news publishers struggle over just half of the total revenue per per-view output seems like a bad way to start.
Apple is still believed to negotiate precise details with publishers and finalize its service plans, rumored to be launched sometime later this year. So it is possible that this may change. But as a starting point for negotiations, it seems that Apple may be asking too much.