Apple debuted a new subscription service within its Apple News product in early 2019. Apple aims to create a “Netflix for news” service that comes at a steep price for publishers.
The company is charging a $10 monthly subscription fee and taking 50% of the revenue. The other 50% will be distributed among participating publishers based on story views.
Apple’s track record does make parts of the offer compelling.
The technology giant would bring publishing companies expanded reach and new audiences at an incredible scale.
A comparable example would be Apple Music. As a result of Apple’s promotional muscle and the application coming preloaded on iPhones, it now has 50 million-plus subscribers.
Some publishers are excited at the prospect of the reach and scale Apple could generate.
Others, however, argue Apple taking half of subscription revenue is too costly, considering Apple typically takes 15-30% of revenue generated from App Store purchases.
Scorned from previous overtures from Big Tech (namely Facebook), the new “deal” was met with a lukewarm reaction from publishers.
Then, Apple included one more cost: Apple would own audience data and insights as well as transaction data. That little detail turns a lousy offer into a backbreaking one.
There is no amount of money worth giving up the direct relationship your organization has with readers and the first-party audience data that comes with it.
If we can learn anything from the past handful of years of Facebook algorithm changes, mass layoffs, or brands being sold off for parts, it is that media and publishing companies need to take control of their most important resource: first-party data.
Today’s disruptors and leading brands like Uber, Netflix, and Amazon are such powerful forces because they leverage first-party data strategically.
That is, they put individual customers at the center of everything they do. It’s part of their infrastructure to allow full autonomy, speed, and control over privacy.
Collecting and using first-party data across all systems allows them to create an entirely bespoke customer data set. They build sticky experiences that no other brand can replicate because it is based on that unique data set and constant collection and optimization.
Media companies naturally have a lot of customer interaction and therefore are data-rich, making them uniquely positioned to take advantage of this first-party data opportunity.
Our work with leading media companies like Hearst, National Geographic, and The Atlantic has shown us that leveraging first-party data to build a direct relationship with readers is the path forward for publishers in 2021 and beyond.
And that path starts with recognizing the value of their first-party audience data and refusing to give up a direct relationship with readers, listeners, viewers, and subscribers.
If you ask us, this is one apple that publishers should avoid taking a bite of.
Download our comprehensive business transformation eBrief to find out how leading media and publishing companies accelerate growth with our CDP.