• by Christian Printzell Halvorsen , Op-Ed Contributor, April 16, 2019

The launch of Apple News+ was greeted with muted interest, with very few top-tier publishers joining the project from launch. This is because the argument that this would lead to a revenue boost for the publications hosted on the platform is oversimplified. It also misunderstands the impact of Apple News+ on publishers when it comes to the knock-on effects on the independence of publishers and on their finances.

According to Frederic Filloux, journalism professor and media entrepreneur, the current US Average Revenue per User (ARPU) for the publishing industry is $120 per reader per year. In contrast, the expected revenue the industry will make from Apple News per user is $59 a year. Far less will go to the individual publisher.

If, as the optimists claim, it was additional revenue, this would be a great situation. However, it's highly unlikely that all subscribers to Apple News+ would be new to subscriptions. “For each magazine reader switching to Apple News+, the platform would need to recruit one additional subscriber, to preserve the size of the sector,” says Filloux. 

It doesn’t sound like a great deal. In addition, Apple News+ won’t allow advertising on the platform, so there is no additional way for publishers to recoup revenue via that approach. 

This financial truth explains why very few top-tier publishers have joined the platform, with the notable exception of The Wall Street Journal (which has struck quite different terms with Apple compared to those offered to the market at large). 

The Wall Street Journal negotiated a deal that gives it control of what content goes on the WSJ’s Apple News+ channel, so WSJ editors can pick the stories that make most sense for them. These are often from their general news coverage, which won’t cannibalise the in-depth business and finance journalism most WSJ subscribers choose to pay for but which actually create incremental, new revenue.

In addition to the impact on revenue, Apple News+ will limit publishers' ability to understand their readers’ behaviour and interests and make it difficult for them to receive any meaningful data about their readers, limiting opportunities to increase engagement and monetisation through personalised experiences.

This is partially because the platform model of monetisation runs counter to the traditional subscription model. On Apple News+, the reader has a relationship with Apple rather than with an individual publisher -- undermining the loyalty a consumer has with a newsbrand, whilst simultaneously creating a situation where publishers need to compete with every other publisher on the platform for attention, effectively commoditising the publishers as mere content producers.

This is a lesson that many publishers have learnt the hard way from their experience with Facebook. Many have seen a massive loss in readership and accompanying ad revenue following changes to the Facebook algorithm to put less emphasis on news following the concern over fake news. But even before this, the impact of catering to a platform's business model was damaging publishers because the platforms set the rules, retained access to data and were the gatekeepers for the reader relationship.

The need to maximise clicks to win ad revenue based on page views meant that clickbait and viral stories became the focus rather than in-depth quality journalism funded by regular revenues from subscriptions. Apple News+ isn’t an advertising model but the situation is similar, as publishers need to compete for eyeballs in order to get incremental payments from Apple.

Instead of putting their future in the hands of platforms -- thereby impacting revenues and the ability of the media to invest in quality journalism -- publishers should look to each other for support. Creating alliances to give them the data and scale needed to compete against the platforms, whilst building loyalty to the publishers as destinations, rather than relying on platform distribution. This will empower publishers and journalists to have control over their content and how it is delivered to readers.

By working together in this way, publishers will be able to concentrate on creating the high-quality journalism that allows them to stand out rather than cannibalising themselves and driving the entire industry in a race to the bottom.