The subscription service for Apple's upcoming "Spatify" magazine, which will provide access to dozens of publishers, will pay only 50 percent of their revenue, according to two senior executives from various companies with knowledge of the deal.
Apple plans to take half of the revenue from a $ 10 monthly subscription to the magazine service, leaving partners to split the rest based on how many people read their stories. "It's a lousy deal," said one advertiser, speaking anonymously. "It looks greedy."
The publishers spoke of anonymity for this story because they were not allowed to speak publicly about the terms of the deal. Apple did not return a request for a comment.
Apple's new media service is slated to launch in the spring, the result of last year's acquisition of Fabric, an application co-founded by traditional media giants, including Conde Nast, Hearst and Meredith. The texture gave digital subscribers full access to hundreds of magazines placed as they appear in print. Apple is reshaping the experience and is expected to make it more dynamic, not just digital entertainment of the printed product, more like Apple News, which is another platform for publishers to reach mobile readers.
"It feels like a fist in the nose, hearing these [revenue sharing] "Says Jason Kent, CEO of Digital Content Next, a trade organization that highlights traditional media companies." There is a significant concern about how platforms compress oxygen out of the communications ecosystem. "
Apple's conditions are reflected in the time of mass layoffs in the digital media space. Just last month, BuzzFeed, the vice president of Verizon Media, which owns HuffPost and other sites, cut about 2,000 jobs. In the past year, fabric fasteners Nast, Hearst and Meredith have all needed to reduce the staff, too.
Kunda Nest, Hurst and Meredith have all refused to comment on this story, but they are likely to be part of the new fabric.
The challenges in the publishers' industry are well documented – with the dominance of Facebook, Google and Apple as the main distribution points, traditional media has become aware of them for their audience and advertisers Apple is trying to position itself as a publishing company, Facebook on data collection and user privacy issues.
Apple has taken a different approach to how it introduces new and sells digital ads. In Apple News, for example, it limits data collection and ad targeting, and it retains the editing of what's displayed there.
"We appreciate Apple's consideration and leadership in a number of concerns of publishers over the past year," says Kint. "It would be good to see them take some leadership and practice on the industry's economy and recognize the value of news and entertainment they help spread."
Some publishers say they are sure Apple can provide the money and the audience it promises for subscription service, and skeptical publishers point to the original texture – it did not work – as proof that the idea is shaky. Publishers say revenue was poor, and the app itself broke out in several incarnations before it was sold to Apple.
But Apple says the partners can do 10 times more than they do with the old app, according to the publishers. One publisher said Apple estimates it could reach $ 2 million in the first year, which looked "very optimistic."
"I do not see how they get this kind of involvement to get that much revenue," says exec Advertising.
Apple is thinking of bundling the magazine service with other media subscribers because it is also Apple Music and it plans to unveil a new streaming TV service in the spring, too. Apple suggested that the multiple services could be promoted together, according to the publisher.
However, publishers are afraid to commit to the magazine app for several reasons, not just 50% split.
For one, Apple is a mysterious company, and it's not really explained the formula how it will calculate which affiliate get the revenue portion. Apple also maintains user data close to the corpus, and the partners will not receive direct contact with the reader.
Site owners want to grow their own subscriber base rather than split it with other website owners and with Apple. Website owners already have Apple news, which is not really a big income, but there is a large audience there.
Apple News attracts about 90 million readers per month, and it's still unclear how the new subscriber service will interact. For now, the subscription service seems aimed at the magazine industry, while Apple News offers content from digital publishers only, newspapers, news sites and magazines. However, Apple has asked newspapers like the New York Times to participate in the subscription service too, accoridng the publishing manager.
Apple News has recently evolved as well, giving advertisers greater flexibility to sell their ads and manage their content as they do on their websites. For example, publishers can set up Paywalls on Apple News, cut their readers after a certain amount of articles and then they get a request to sign up.
If readers subscribe to Apple's magazine subscription, and the publisher puts its content, readers have few incentives to pay for subscribers to the publisher's feature.