Apple is today launching a program that allows subscription news organizations to participate in the Apple News app. They must meet certain requirements in order to reduce their commission rate to 15% for qualifying in-app purchase made within their App Store apps. Apple's standard model for subscription-based apps is a 30% commission in their first year on App Store. This drops to 15% in the second year. The new Apple News Partner Program announced today will increase the commission rate to 15% for participants who start on day 1.
These conditions have a few limitations, but they are in the best interest of Apple. The news publisher must be present on Apple News, and their content must be in the Apple News Format. This is the jаvascript Object Notation format (JSON), which is used to create articles optimized for Apple News, iPhone, and other Apple mobile devices. This usually involves some setup to convert news articles from publishers websites or their CMS (content management systems) to the supported JSON formats. Plugins are available for WordPress and other popular CMSs to simplify this process.
Publishers based outside of one of the existing Apple News markets (U.S., U.K. or Australia) can still fulfill their program obligations by providing Apple an RSS feed.
The partner app that qualifies for the 15% commission on the App Store must deliver original, professionally written news content and offer auto-renewable subscriptions through Apple's in-app purchasing system.
Although there are some initial steps to establish the publisher connection to Apple News it is worth noting that many major publishers already use Apples platform. They won't need to do additional work to get the reduced commission on their apps. The program is also a way for news organizations to be encouraged to continue their participation in Apple News, since it makes more financial sense to do this across their wider business.
This will be a contentious area for publishers who would prefer that the App Store commission was not reduced with strings attached.
Some publishers are already concerned that their businesses will be compromised by being tied to the Apple News ecosystem. The New York Times, for instance, announced last year that it was ending its partnership with Apple News. It stated that Apple wouldn't allow it to maintain a direct relationship with its readers and would prefer to drive them to its app and website.
Apple would argue, however, that it does not stand in the way publishers businesses. It allows them to paywall their content while keeping 100% of the ad revenues from the ads sold. They can split the commission with Apple if they are unable to sell it all, or prefer Apple to do it on their behalf. In this case, they keep 70% of revenues. Apple News+ subscriptions are a good example of this. The subscription revenue split for Apple News+ is higher than the publisher could sell it all. Apple then markets the service to people the publisher wouldn't be able to attract.
The new Apple News Partner program was launched amid scrutiny of Apple's App Store business. More recently, legislation was proposed to address anticompetitive concerns in the U.S. as well as in major App Store markets like South Korea.
Apple was already aware of this market shift and had been working to protect itself from antitrust lawsuits and complaints. It also adjusted its App Store commissions. Apple launched the App Store Small-Business Program last year. This program also reduced commissions on in app purchases from 30% to 15%, but it only applies to developers with revenues over $1 million.
Although this program was beneficial for smaller publishers, it was evident that major publishers were not satisfied. The Coalition for App Fairness (CAF), an advocacy group and lobbying organisation, announced the reductions in small business commissions in November.
The publishers had written to Apple CEO Tim Cook previously to request lower commissions. However, they had other concerns about the revenue share than the size of it. The publishers also said they didn't want to be forced to use Apple's services to make in-app purchases to their subscriptions. This Apple tax makes it more expensive for them.
It is still to be seen how these publishers will react to the Apple News Partner program's launch.
It allows them to lower their App store fees but it does not address their larger complaints about Apple's platform or its rules. It ties them to a program that further locks them into the Apple ecosystem, if anything.
Apple announced today that it will recommit its support to three major media non-profits: Common Sense Media and the News Literacy Project. This gesture of goodwill was also made. Apple considers these non-profits essential to its larger mission of empowering people to be active news readers and smarter. They offer independent, non-partisan media literacy programs. Apple stated that it will announce additional media literacy projects from other organizations later. However, the company refused to disclose the amount of its financial commitment or how much it had sent these organizations in the past.
Eddy Cue (Apple's senior vice president for Services), stated that Apple News customers have had access to trusted information from their publishing partners since day one. Apple has provided customers with many options to access and enjoy news content through its products and services for more than a decade. Apple News Format was created to give publishers an opportunity to show their content and offer a great experience to millions of Apple News users.
The News Partner Program website will provide more information and an application form.
