The Dilemma with Apple

Unless you’ve been under a rock this week you’ve undoubtedly heard about Apple’s radical changes in its Apple News+ product; one that puts publishers in a bit of a pickle.

Publishers are no stranger to having to manage content distribution. Whether managing the newsstand channel or ensuring your ducks are in a row for the United States Postal Service, we’ve been playing by the rules of the gatekeepers for decades.

But now we’re in the digital era, of course, and we’re wrestling with Facebook, Apple, and Google for distribution outlets. The consumer moved online, and these became the new (additional) players publishers have to manage.

Apple Mixes Up the Game...Again

In case you missed it, here’s a quick recap. On Monday, Apple announced Apple News+, a paid version of its Apple News product where users can now read more than 5 billion articles per month. The product has been growing in popularity since its release just a few years ago. Apple News+ will feature content from over 300 magazines and newspapers for just $9.99 a month. Some major publishers (Wall Street Journal, The New Yorker) are in. But others (The New York Times, Washington Post) are sitting out because of Apple’s revenue share terms. Apple is taking 50% of the $9.99 from each user and publishers compete to get their share of the rest. (Publishers get paid based on the amount of “engaged” time is spent with their content.)

As a consumer, I love it. I use Apple News every day. The content is quality and it’s a curated personal feed of the brands I love to follow. Thank you for solving another one of my first-world problems, Apple. Now, I no longer have to visit multiple (often slow loading) websites to get a top-level look at the news.

And now, as an Apple News+ subscriber, I can tap a particular magazine title and see the most recent cover along with a table of contents. I can also access a whole year's worth of back issues as well.

How the Industry is Responding (including our thoughts)

To support their business model, publishers need to capture attention, data, and revenue, but Apple isn’t going to bring them any of that. Apple doesn’t share email addresses, cookies, or billing information of the subscribers engaging with a publisher’s content. Publishers have no way to develop a relationship, gather feedback through surveys, or deliver perks.

However, publishers like New York Magazine, Wall Street Journal, Rolling Stone, and Hearst, Meredith, and all of the Conde Nast titles are in. So yes, a lot of the players are playing ball.

Some of the major players are pushing back. The New York Times CEO Mark Thompson said, “we tend to be quite leery about the idea of almost habituating people to find our journalism somewhere else.” And I think he’s right.

Our agency cares deeply about how publishers get funded and supported because the quality and health of journalism is connected directly to the health of our democracy. The media industry is in a crisis and when journalism businesses fail or can’t support doing quality work, it hurts all of us. The fact that Apple has more than $200 billion in cash is just rubbing salt in the wound.

As one of our TFD partners said after the announcement, “I feel like this is another platform that is disintermediating us from our high-value audience and taking a huge cut of the revenue in the process.”

This will not support the ability for independent publications to thrive and build robust relationships with their audience. A publisher’s audience is its most valuable asset. Here, Apple is taking that asset away from them.

Perhaps worst of all, as TechCrunch puts it, “publishers will be thrown right back into the coliseum of attention. They’ll need to debase their voice and amp up the sensationalism of their headlines or risk their users straying an inch over to someone else. But they’ll have no control of how they’re surfaced…” We all saw how the continued escalation of sensationalized headlines turned Facebook into a little more than a click-bait feed. The loudest or most offensive and sensational stories capture the most engagement and thus we are continuously served sensational and controversial headlines. But at least social media is exactly that. It’s a social platform on which ideas can be exchanged. Apple News+ is positioning itself as a news distribution platform, but ultimately setting up publishers to compete in the same way they did on social media, which unfortunately may breed more of the same behavior.

There is one potential benefit that could hold some value for publishers. Copies consumed in Apple News+ are counted as paid issues on an annual audit report. CVC told us this morning that indeed, copies consumed (back issue or current) can count as paid digital copies on a publisher’s CVC audit. So, exposure in Apple News+ can tie back directly to supporting the publisher’s rate base.

Ultimately, if publishers are confident in their ability to drive quality and engaged audience, then they should not have to distribute their content for pennies without a way to actionably increase revenue or even forecast reader revenue effectively. Like life, quality content finds a way. Publishers should be doubling down on their own platform assets (creating robust and fast websites), owned audiences, and quality content that you know your consumer wants to read.