When Apple News+ was first announced in March, publishers reacted with skepticism, especially in Europe. Now that it is looking likely Apple News+ will be launching in the UK any day now, we are as curious as everyone else to see who will join.
To understand why UK publishers will or will not join Apple News+, we’re exploring why publishers were skeptical in the beginning, how Apple News+ has fared in the US, and diving into news aggregators in general.
Initial skepticism hasn’t gone away
With the launch of Apple News+, many publishers expressed skepticism for three main reasons:
- Fear Apple News+ creates reader habits for Apple, not publishers
- Limited financial incentive for publishers
- Loss of control over product experience and reader relationships
This first reason has only gotten stronger since March. From our talks with publishers, we hear a fear that news aggregators such as Apple News+ will create bad habits in readers, making them accustomed to seeking out journalism via tech giants and not the original creators of the journalism. With this in mind, we expect to see more publishers turn away from news aggregators.
Additionally, publishers must give Apple 50% of any revenue they generate, which is higher than the 30% they take from subscriptions sold through the Apple App Store. Considering the monthly subscription cost is 9.99 USD, to be shared over the relevant participating publishers, and Apple will allow family sharing for Apple News+, it is unclear even how much revenue publishers can expect to generate.
Ultimately, publishers have learned from previous relationships with tech giants that they need to build an audience on their own platforms, or risk being at the mercy of the tech giant’s whims. No one wants a repeat of the Facebook newsfeed 2018 changes.
Publishers don’t receive important info from Apple News+ readers, such as their email addresses for follow up communications, cookies to allow for personalisation, or credit card info to reduce friction for future purchases. When a reader finishes content from one publisher, they’re even prompted to explore content from competitors.
Limited success in the US
Right off the bat, Apple News+ got off to a rocky start in the US. Digiday spoke to five participating publishers who shared stories of confusing user experiences, struggles with formats and designs, and complaints that Apple was favouring large publishers. While Apple News+ was pitched to publishers by making it seem Apple itself would be providing design resources and article templates, this didn’t turn out to be entirely accurate. Small publishers were only given an email address to send design questions, while larger publishers were invited to a private Slack.
This has also meant an added workload for many publishers on Apple News+. Publishers wanting to convert pages from their print issue to digital rely on tools that scan PDFs then convert that content into separate articles. However, this technology doesn’t always work as promised, effectively requiring each edition to be copy-edited and designed again. Two months after launch, Apple SVP Eddy Cue promised to add hundreds more people to their team in order to address these tech complaints. It’s still to be seen if this has addressed the problem completely.
There have also been complaints about the lack of revenue coming in. Originally Apple was promising publishers they could earn 10x the revenue they had made from Texture in the first year of Apple News+. However, revenues seem to be nowhere near this target, with one publisher saying their revenue was “one-twentieth” of what had been promised.
Still, Apple was able to convince many major magazine publishers to join (including Conde Nast, Meredith, and Hearst), and they had over 200k subscribers in the first 48 hours after launch.
“Netflix for News” not going anywhere
Whether it is Apple News+ or other news aggregators such as Google News, the idea of “Netflix for News” as a panacea has been around for a while. SmartNews, the Japanese news discovery app, made headlines recently as one of the few news startups to reach unicorn status, with their latest funding round bringing them to a valuation of $1.1 billion. They bring in a 9-figure revenue annually and have 20 million global monthly active users, so we can understand why tech giants want to get in on the action as well. While similar to Apple News+ in product experience, SmartNews has a different business model. Instead of charging a monthly subscription, the app is free for users, making money from advertising.
Knewz is another news aggregator to keep an eye on. Currently in development by News Corp, Knewz claims to address many of the complaints publishers have about news aggregators. It will prioritise original reports over aggregation and won’t deprioritise paywalled sites, it will link directly to stories on publisher websites, it won’t take a cut of ad revenue, and will even share data directly with publishers.
However, even being publisher-developed won’t avoid all the common pitfalls of news aggregators. That’s something the team at Kinzen recently learned. While they had been developing the next ‘Spotify for news’, they came to the conclusion this was exactly the wrong approach. Since the team so strongly believes publishers shouldn’t be giving away their content or reader relationships to third parties, they have decided to pivot to offering personalisation technology directly to publishers. As more publishers learn this lesson as well, it will be interesting to see which publishers begin investing in their own personalisation tech instead.
For all of these reasons, we remain curious to see who will actually be joining Apple News+ in Europe. Let us know if you will or won’t be joining and we’ll feature some of these responses in a future article.
Media innovation analyst @ Twipe