Monday, March 25, 2019

"Subscriptions ‘Bundles always dilute the brand’: Publishers grapple with Apple’s new subscription service"

From Digiday, Mar. 25:

Apple wants to create a Netflix for magazines, but not every publisher is ready to hop on board.
On Monday, Apple plans to unveil a paid subscription product that includes access to dozens of magazines and reportedly at least one national newspaper, The Wall Street Journal, for $10 per month. Apple will keep 50 percent of that revenue and divide the remaining half among publishers based on readers’ “dwell time,” or the amount of time they spent reading a given publisher’s content, according to several publishing sources.
Those terms, plus the fact that Apple will control the customer relationship and most of the data about who is reading what content, have been enough to turn off several publishers, including The New York Times and the Washington Post. Some publishing executives, notably The New York Times’ CEO Mark Thompson, have also argued that having their content lumped together with dozens of others, at a price far lower than a typical newspaper subscription, sets a dangerous precedent.

“It totally commoditizes news and undermines publisher pricing,” said an executive at one publisher that is not participating in the product. “Bundles always dilute the brand visibility and brand narrative of a publisher by dint of being thrown together with everyone else. It will not be a ‘sticky’ read for any one publisher.”

Publishers are not entirely opposed to bundling strategies, especially as they seek to grow consumer revenue. Yet with so many feeling like they haven’t captured all of their potential subscribers yet, some publishers are worried that Apple could stunt one of their biggest growth opportunities — and are willing to wait to sit out of Apple’s flashy new product, for now.
Apple did not respond to a request for comment by press time.

Many of the publishers involved in Apple’s forthcoming subscription service did not have much of a choice.
Last year, Apple purchased Texture, a service that offered unlimited digital access to nearly 200 magazines, plus a daily news digest from Reuters, for up to $15 per month. Many of the publishers that were part of that version of Texture — which included titles ranging from Cosmopolitan to Bloomberg Businessweek — were locked into long-term agreements with the service, said one source familiar with the matter. This spared Apple the trouble of having to start negotiations from scratch....MUCH MORE