Daily Management Review

Apple to create “Netflix for News”


02/14/2019


The new service will be based on subscription: Apple plans to take 50% of the revenue, and share the remaining 50% between all media.



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Apple is developing a new paid service that will work on the principle of a news aggregator. However, the media don’t like the proposed financial terms of the technology giant, writes The Wall Street Journal.

Apple plans to take 50% of its revenue, and share other 50% between all media. The service, which Apple introduced as “Netflix for News,” will allow users to read an unlimited amount of content from participating publishers for a small monthly fee, similar to the Apple Music service. At the same time, the price may be relatively small - about $ 10 per month. According to sources of publication, the final price may change.

The service will also give access to materials that the media hide behind the paywall, giving access to them through their subscription. This model stimulates the growth of large publishing houses, which are rapidly losing revenues from paper publications. For example, Times has a basic monthly subscription of $ 15, while Post has $ 10. By aggregating all paid content, Apple will deprive the newspapers of this source of income. In this case, income of each media will depend on the amount of time the user spent reading his materials.

Moreover, Apple will not share user data with editions, such as credit card information and email addresses. This data is important for the media, which make up their own reader databases, offering targeted content and selling targeted advertising based on this sample.

Some of the media are skeptical about Apple’s idea, writes The Wall Street Journal, whose subscription costs $ 39, calling this model "cannibalizing its existing subscriptions to attract Apple users with lower incomes." At the same time, the number of users of Apple services is much greater than the number of readers of each of these newspapers. So it is impossible to unequivocally assess t economic indicators of this potential model.

BuzzFeed News, citing sources in the company, writes that in March Apple will present not only a news aggregator, but also other paid services. The company believes that these services will help offset the slowdown in iPhone sales. The drop in revenue is causing serious concern of Apple, which is proven by the fact that the company stopped disclosing number of devices sold in its reports, leaving only the financial indicators. They grow by increasing the price of each new device model.

The publication writes that the presentation will take place on March 25 at the Steve Jobs Theater in the Apple Park campus.

source: wsj.com






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