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Apple's new journalism deal has to send publishers to work



Programming Note: The third-party software we use to post the Interface was not included on Tuesday, preventing me from collecting the regular newsletter or emailing it as usual. But I wrote a column anyway because I love you.

Social networks affect democracy partly because they occupy much of our common information sphere. Which voices rise there – and which are suffocated – have an impact on the discussions we have and the actions we take as a result. But the technology giant should not have a social network to change our information environment. If Apple is going to have its way, everything it may need is the iPhone

The Wall Street Journal announced on Tuesday that Apple, which is preparing to introduce a subscription news service, wants publishers to give 50% of all the revenue it generates. Benjamin Mullin, Lukas I. Alpert, and Tripp Mickle's report:

Apple's plan to create a subscription news service turns out to be the resistance of large publishers to the giant's proposed financial conditions, according to people familiar with the situation complicating an initiative that is part of the company's efforts to offset iPhone's sales slowdown.

On the ground of some news organizations, Cupertino, California, said it would hold about half of its subscription revenue, people say. The service described by industry executives as "Netflix for News" will allow users to read unlimited content from participating publishers for a monthly fee. It is expected to be launched later this year as a paid app order Apple News, people said.

Once half of their revenue is left, the remainder will be potted and then split between publishers based on how many readers engage in their stories. How much revenue can this publisher generate? Well, think about what happened when YouTube introduced a similar scheme with Red, its non-ad subscription offer. By reporter Sahil Patel:

According to five media managers who watch several high-performing YouTube channels, YouTube's red subscription revenues are scarce compared to the money they can make from advertising. A network executive, which receives more than a billion reviews a month on YouTube, said YouTube red subscription revenues accounted for about 7% of the YouTube revenue for 2017. "It's just that, which YouTube monetizes and does not include [the ads and sponsorships] that we sell, "he said. "If you add to what we sell, it becomes less than a percentage."

The four other media leaders shared similar discoveries. A network executive who receives hundreds of millions of views per month has announced that YouTube Red Redemption subscriptions account for more than 10% of total YouTube revenue. Another CEO, who is transmitting channel data to more than 1 million subscribers, said the channel had made about $ 4,000 from YouTube Red last summer.

The explanation for low earnings is simple: as more publishers come to the platform, whether YouTube or Apple News, the competition for their eyeballs is rising and revenue falls accordingly.

It's easy to see why Apple prefers the scheme. It gets unexpectedly new revenue at a time when the drop in iPhone sales makes the sale of additional services a high priority. It can lead to higher-quality publishers on their platform by overriding their reputation as a premium brand. And he can talk loudly about how much he likes journalism, as did Apple's vice president Eddie Kee when he announced the acquisition of Apple for the past year. "We are committed to quality journalism from trusted sources and allowing magazines to continue to create beautifully designed and interesting stories for consumers," he said at the time. the necessary product integration and addressing customer service issues. At a time when the industry is already releasing hundreds of journalists by asking them to build their partner and product teams in exchange for the potential increase in one-digit figure revenue, they look funny on his face.

The bigger problem, of course, is that Apple feels comfortable to ask publishers to start with 50%. This is a powerful symbol of the concentration of power among a handful of technology companies, along with general inattention to regulatory competition on the market. Apple, which owns more than 60% of the US smartphone market, is committed to exploiting the maximum value of its ecosystem. It is good to maximize the value: the company has more than $ 215 billion in reserve. they generate when launching Instant articles. Apple will technically allow publishers to retain 100% of their revenue for ads they sell, but they have to be sold in the usual Apple News format than standard format publishers are used to selling. Most just let Apple sell their ads for them, and as a result, the app generates a little money for publishers, Will Oremus said last year.

The world in which publishers have to give up half their revenue to Apple is as worrying as a world where publishers are totally dependent on the recommended social networking algorithms. In both cases, distribution is artificially restricted and taxed by platforms that have only a cross-interest in the better. The era in which local newspapers operated with local monopolies had many of their own problems – but supported good journalism in a way that no technology platform would ever pretend.

I'm usually glad when technology platforms offer publishers new ways to make money. More money in journalism means more journalists investigating the dark corners of our republic. But Apple's approach seems to be designed to ensure that the company does absolutely everything it can get out of.

Welcome to capitalism, I know. But every few months, Tim Cook is on the stage and asks the world to keep his company at a higher standard. This proposal does not satisfy him. When he goes on stage next month, he hopes to have better news.


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