Publishers Chafe At Apple's Terms For 'Netflix For News' Subscription Service As It Demands a 50 Percent Revenue Cut

Zorro shares a report from The Wall Street Journal: Apple's plan to create a subscription service for news is running into resistance from major publishers over the tech giant's proposed financial terms (Warning: source may be paywalled; alternative source), according to people familiar with the situation, complicating an initiative that is part of the company's efforts to offset slowing iPhone sales. In its pitch to some news organizations, the Cupertino, Calif., company has said it would keep about half of the subscription revenue from the service, the people said. The service, described by industry executives as a 'Netflix for news,' would allow users to read an unlimited amount of content from participating publishers for a monthly fee. It is expected to launch later this year as a paid tier of the Apple News app, the people said. The rest of the revenue would go into a pool that would be divided among publishers according to the amount of time users spend engaged with their articles, the people said. Representatives from Apple have told publishers that the subscription service could be priced at about $10 a month, similar to Apple's streaming music service, but the final price could change, some of the people said.

Another concern for some publishers is that they likely wouldn't get access to subscriber data, including credit-card information and email addresses, the people said. Credit-card information and email addresses are crucial for news organizations that seek to build their own customer databases and market their products to readers. Digital subscriptions are powering growth at big publishers including the Times, whose basic monthly subscription costs $15, the Post, which charges $10, and the Journal, which charges $39. Some of those companies are skeptical about giving up too much control to Apple, or cannibalizing their existing subscriptions to sign up lower-revenue Apple users, according to people familiar with the matter.

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