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For a number of reasons, Apple has had a somewhat rocky relationship with publishers involved in its Apple News+ service over the past year, and some have expressed uncertainty over whether it’s even worth remaining on board after their initial commitment expires — which is due to happen any day now.
However, it looks like Apple may be trying a new tack to continue to entice publishers as well as wooing in new subscribers: a pivot to sharing audio versions of news and magazine stories.
According to Digiday, Apple has been approaching the publishers that are already involved in Apple News+ and asking them for permission to produce audio versions of their stories, agreeing to foot the bill for the production costs even while promising the same revenue sharing model that they get for publishing their written content on the platform.
Right now, Apple takes a 50 percent cut of all of the revenue from the $9.99/month it gets from each of its Apple News+ subscribers, while the remaining half is distributing among the publishers based on how much time each subscriber spends consuming their content in a 30-day period.
Under Apple’s new proposal, which has been confirmed by at least four different publishers, Apple would handle all of the production costs for creating audio versions of the content, and would add time subscribers spend listening to the metrics that are used to determine how much of a revenue cut that each publisher gets.
Sources from two of the publishers told Digiday that Apple had originally expected that its own editorial team would be choosing which stories to produce audio versions for, based on what they felt would be a good fit for its audience. However, publishers seemingly balked at that particular idea, at least partially due to intellectual property rights, since contracts with freelance writers typically preclude publishers from reusing stories without the original author’s consent, which often also requires additional compensation to be paid.
Publishers Remain Skeptical
While you might think that this would be a win for publishers, since Apple is willing to foot the entire bill to produce the audio versions, several publishers aren’t sold on the merits of the plan.
Reasons for their skepticism varies, but one indicated that Apple hasn’t shown them any indications that its audience even wants to listen to audio versions of their stories, while another was concerned that an emphasis on audio for News+ could skew the compensation model in favour of those who are selected to participate, since compensation is based on time spent on a publisher’s material, and listening to a story generally takes longer than reading one.
All the publishers who were part of Texture are going to get into an arms race.
At this point Apple hasn’t shared a firm timeline for when audio versions of stories may launch, and it’s unclear how many publishers it has approached, or how it’s choosing which ones to make the pitch to, but there have also been concerns that it may still be playing favourites in excluding smaller publishers.
As Digiday reports, many publishers still remain dissatisfied with the revenue they’re getting from Apple News+, and it’s clear that some of them are staying on board simply because they’ve decided they don’t have anything to lose by continuing to participate. Others, however, have raised the same old concerns that they could be making more money through other channels if they weren’t already giving it away so cheaply to Apple’s News+ subscribers.
During last month’s quarterly earnings call, Apple’s CEO Tim Cook shared that Apple News still boasts 125 million monthly active users, however it’s important to keep in mind that this includes those who are reading the free version of Apple News. By all reports, Apple News+ still falls short of even one million subscribers; while Apple hasn’t shared any firm numbers since announcing the 200,000 that it signed up after the service launched last spring (which were all free trials at that point), sources have suggested that it hasn’t grown significantly since then.
Although it’s fair to say that as with anything, it’s the publishers who are most disappointed with the service that are the most vocal, several have said that they’re making relatively tiny amounts of money from the service, stating that they haven’t seen any increase since the service launched a year ago, and describing the monetization strategy as “horrendous.”
In fact, according to Digiday, many of the magazine publishers on Apple News+ have only remained on board to keep their print circulation numbers up; in an odd twist, it seems that those on Apple News+ can actually count downloads of those issues as part of their circulation base, as long as it remains identical to the print edition. In other words, every magazine downloaded or read through Apple News+ gets counted as a sale of a physical copy, giving them a motivation to stay on board for reasons other than the strict bottom line revenue.
While the demand for audio content has been growing in recent years, it remains to be seen how well Apple’s strategy will play out. Certainly, Apple is no stranger to audio production, having basically pioneered the concept of Podcasts in the first place, as well as running one of the first major audiobooks stores via iTunes. Recently it’s also been making plans to begin producing its own original Podcast content, so Apple News+ audio may also simply be part of an multi-pronged push into the audio content market.