"It is only by offering a big piece of the cake to publishers that Apple news + will succeed and become a reference News Platform "

This is an analysis of the impact of Apple's launch of its paid information offering within Apple news in North America and the conditions to be fulfilled to ensure its success in France.

Tim Cook announced on Monday, March 25, the introduction of a paid digital kiosk integrated into its Apple news app, currently available in the United States and Canada. For 9.99 dollars a month (about 9 euros), 300 titles are available with an unlimited access, including a very large majority of magazines, within this offer dubbed "Apple news plus".

The service is expected to be deployed by the end of the year in Australia and Europe. Will French publishers be interested? Let us remember that Apple has already attempted to intermediate the publishers’ readers: late 2011, the American company had launched NewsStand, then presented as a key tool for the press. The kiosk was in fact only a shelf with paid applications, using all different formats, generating only a tiny stream of revenue and already taking a very high Commission without data sharing.

NewsStand, was closed discreetly-without asking for the opinion of the publishers-in 2015, shortly before the American company launched Apple news. Since then, the success of this news feed is real for the media who appreciate the additional traffic input. But the result is almost nil for Apple that could not generate any additional income, while GAFA and platforms (Facebook, Amazon, Google, Netflix, Apple...) are all geared towards the development of new revenue.

It is in this sense that it is necessary to understand the launching of its new offers Videos and media-based subscription. Its strategy was initiated in April 2018 when it acquired Texture, which proposed to 300 000 users a press reader application (200 American magazines) in unlimited reading for $10 per month.

The most powerful publishers refuse the proposed conditions

Apple knows that newspapers are the best source of information to obtain consumer's loyalty. The platform attempts to convince publishers to partner with their offer by proposing a new model: According to different American media, 50% of the turnover generated-i.e. $5 per subscriber-will be shared among all publishers on the platform in proportion to the use of their content, as is practiced in music, and still no access to user data.

The reader remains the property of Apple and is never in direct contact with the Publisher, which therefore cannot offer its own services. The reception of this offer by the American Publishers is mixed: These are essentially magazine content, quality (the Atlantic, vanity Fair, Vogue Wired, Newsweek, Forbes, Elle, Marie Claire, national geographic...) who have accepted the deal, and often without their digital content. For newspapers, which are key marketing levers for online kiosks, Apple can only rely on the Los Angeles Times and the Wall Street Journal, although the latter does Deliver General information content and not its most qualitative economic articles.

The most prestigious media, such as the New York Times or the Washington Post (owned by Jeff Bezos, CEO of Amazon, who also positions himself on the content to enrich his basic offer), refused to distribute their contents to the more than 90 million of iPhone users in the United States. Their reasoning is simple: now that they have crossed the threshold of a million digital subscribers on their own media, this is not the time to make disintermediating and relinquishing the data of their readers in Exchange for a few cents per title read (2 to 3 cents per download) offered by Apple.

The press is still too often divided

However, the risk is well known: press publishers, in the United States, in France or elsewhere, never present a United Front to the platforms. Or at least, this United Front has never lasted very long.

The new Apple offer will not be available immediately in Europe. It will arrive once the European copyright directive is implemented (voted by the European Parliament on 26 March) and after having finalized negotiations with the publishers. And Apple should be careful not to use its mobile application platform to support its aggregation service at the expense of the one proposed by the publishers themselves or those of competitors; the European Commission is increasingly fighting players who abuse of their dominating position, as it has done with the new sanctions imposed on Google a few days ago and investigating the complaint of Spotify against Apple.

"It is only by negotiating a higher remuneration for publishers that Apple will be able to convince publishers to change their strategy"

In the field of the press, each market must be approached locally. The stakes are economic, political and cultural. Apple will have to deal with at least two specificities of the French market. Firstly, the French media, thanks to the digital kiosks developed by the telecoms operators and their own marketing efforts, are already distributed via intermediaries in an environment favourable to them. They arbitrate volumes and repayments based on distribution channels with the objective of detecting the readers to whom they will be able to enroll in their subscriptions program.

This is what is practiced on kiosks in France, in particular on ours, ePresse.fr, and which ensures an effective cohabitation: we have succeeded in convincing the essential of the National and regional press, which are essential actors to guarantee the interest of the kiosks with readers, accounting for more than 50% of the press consumption on a digital kiosk. We Negotiate terms that ensure a cohabitation without cannibalization of publishers ' subscribers, including sharing the value more at a higher level than the one proposed by Apple. This remuneration is sufficiently high that sales on kiosks in France are registered officially as a unit sale.

In other words, it is only by negotiating a higher remuneration for publishers that Apple can convince them to change their strategy, thus to give up a direct link with digital players-that they have so much trouble recruiting-and joining Apple news. The Bill will be high, but Apple has the means.

Apple's second challenge: better data sharing. The American firm has a policy of never sharing the data of its users with the apps it distributes. On our side, on the kiosks in France, we give the publishers information about their audience and we communicate to them the profile of their readership, which allows them to better value their advertising media. They can arbitrate how they want their titles to be distributed. 

This data is important to the media in order to enhance their media with their advertisers and to feed their subscriber recruitments. What warranties will Apple offer here to publishers? And will their editorial line – and therefore their specificity – increasingly important to differentiate themselves, be defended in the Apple news app? All these points remain unanswered at the present time.