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Publishers Chafe at Apple’s Terms for Subscription News Service

Benjamin Mullin, Lukas I. Alpert and Tripp Mickle, for The Wall Street Journal:

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.

I’ve been spending a lot of my time lately working in and around the publishing industry. As a whole the industry’s concerns are almost always tied to declining revenue, legacy high-costs, and therefore reduced or non-existent profits. I find it difficult to believe that any publisher is willing to take a 50% cut on revenue. Apple would need to deliver a massive upswing in subscribers for this to even be a conversation.