Apple’s new News Partner Programme provides an opportunity for publishers in four countries to sell subscriptions at half the ‘Apple Tax’ rate, and effectively seals the fate of the old deal.
So says former editor and marketing director Robert Whitehead in an INMA review of the “flurry of activity” from Apple as it pivots away from the classic 30 per cent rate on what it calls reader apps.
Among “groundbreaking” developments, this provides an opportunity for publishers that contribute content to Apple News – a free app with 125 million monthly active users in the US, Canada, the UK and Australia, where it is pre-loaded on devices – to sell subscriptions directly to readers of the article at a “discounted” Apple fee of 15 per cent.
More importantly, participating in the News Partner programme also drops the rate on all the publisher’s subscription sales within their own branded apps as well.
Publishers outside those four countries can also file articles, appealing for example to expats from other English-language markets.
Articles in Apple News are hosted by Apple, which doesn’t share usage data unless a consumer has explicitly approved it, but Apple will hand over the consumer’s ID if a subscription is sold.
“It’s worth noting that unlike most other news aggregators these days, Apple News doesn’t pay for content,” says Whitehead. “A publisher can decide to use the Apple News marketplace of readers to go prospecting for subscribers just as long as it’s happy to pay Apple the 15 per cent finder’s fee for each year they remain a subscriber.
“Their line appears something like this: Give us your stories for free to populate our app, and we’ll give you a cut price commission on any subscription that arises.”
Publishers can also sell ads against each of their items, retaining all of the ad revenue, although White head says publishers in the past “haven’t recorded much success with this”, although the add-on is marketed in the new programme as a sweetener.
Whitehead says signals from Apple’s headquarters in Cupertino show it has “fully accepted that its iron hold on 30 per cent App Store commissions is finished as legal settlements and new laws pile up”.
Instead it will focus its legal fight on protecting its right to approve all app software in the name of tech security. “By choosing this route, Apple appears to accept that it cannot win against the optics of its perceived pricing power over its marketplace,” he says.
The News Partner Programme is one of five recent developments. Others include a proposed alternative payment route as part of a settlement with small developers in California, South Korea’s new law requiring all app stores to let developers use their preferred alternative payment methods, Apple’s agreement in Japan to let developers share a link with media app customers allowing them to manage subscriptions, and the Epic Games case, in which a judge ruled that Apple must allow developers alternative payment access.
“It’s no longer market-moving news when another inquiry or court case is announced involving a Big Tech company,” says Whitehead, “yet it is news when their rulings and settlements mount up, and that news becomes a major turning point when Apple changes course to try to head off further government or court intervention.”
And with an estimated 19 inquiries or significant cases globally, Apple’s recent concessions are unlikely to be the last.
“Apple will make more than US$21 billion from the App Store this year… and what started as a side venture is now anything but.”
Whitehead says publishers won’t abandon the App Store, and that Apple “has perfected a way to help businesses get consumers to part with their money with unrivalled certainty”.
He says Apple’s concessions and new discounts “instantly rewrite the options available for news publishers”, which are hunting new acquisitions or targeting renewals, and add more possibilities to the mix.
Among possible scenarios, he suggests drawing up a new rate card, which offers lower rates to people who agree to transact outside the App Store – “current App Store policies prohibit cheaper rates being offered by publishers outside the store, but this will end,” he says – and using contact data obtained from an app download, if consumers agree to provide it, to directly market the promise of cheaper offers if they transact outside the store.
“If things unravel further for Apple, it might be allowed to be an in-app message or push notification.”
Whitehead says that “whatever else happens to free up pricing and payment flows”, Apple will be preoccupied elsewhere.
“It has signalled it will fight longer and harder in the name of system integrity to hold on to its right to approve each app in its store, even as it comes to grips with losing its grip on their pricing.”
• Robert Whitehead is INMA’s project lead for its digital platforms initiative, which tracks developments of how the big tech companies deal with media businesses.