Earlier this week The Wall Street Journal said Apple is having difficulty convincing some key news publications like the Washington Post and of the New York Times to sign up for the Service, because Apple wants a 50 percent sales split.
Apple would retain 50 percent of all subscription revenue, and the other half of revenue would be split among publishers, "depending on how much time users spend on their products."
Compared with Apple's 70/30 App Store Split and the more than 70 percent of Apple's music sales coming to artists, the 50/50 split sounds stingy, but Recode spoke today with industry insiders and provided some Insights on why Apple has committed to this number.
As it turns out, there are already many magazine publishers aboard the 50/50 Sales Agreement, most of which are convinced that Apple will make millions of people subscribe to the new service dramatic split off Re / code :
And some publishers are happy about this because Apple believes that Apple will attract many millions of people for the new service. And they would rather have a smaller percentage of a larger number than a larger portion of a smaller number.
In the words of a publisher who is optimistic about Apple's plans, "It's the paid-up dollars, not the percentage."
However, magazine publishers have little to no online monetization of their content. This does not apply to big newspapers. The New York Times and the Washington Post (1
According to Recode magazine publishers who have participated in Texture, the magazine service acquired by Apple, are already familiar with this type of revenue split. Texture forms the basis for the subscription service developed by Apple News the Apple. Apple plans to charge a fee for access to news and magazines.
Since the purchase of Apple Texture, magazines receive about half of the revenue that the service generates, along with 100 percent of ad revenue. It is not clear whether major newspapers will ultimately agree to similar terms, as it may exclude more viable subscription options available outside Apple News .
Apple informs the publishers that the new Apple News service is heavily promoted and has the potential to generate millions of subscribers, something that Recode does not confirm is impossible given the success of Apple Music service. Apple Music launched in 2015 now has more than 50 million paid subscribers.