The ‘Spotify problem’ and the ‘Facebook problem’ that could sour Apple’s ‘Netflix for news,’ Apple News Plus

Photo courtesy of Apple

Apple has launched the “Netflix for news,” a subscription service that gives users access to hundreds of magazine and newspaper publications all in one place for $9.99 a month. Apple News Plus may appeal to users, but it’s not good business for publishers, according to Dan Kennedy, who is an associate professor of journalism at Northeastern University.

The subscription, which is sometimes stylized as “Apple News+,” gives users access to stories from more than 300 magazines, but so far, only three newspapers have signed on: The Wall Street Journal, the LA Times, and the Toronto Star.

This makes for some ominous financial math for publishers, Kennedy says.

“If you’re paying $10 a month for access to 300 publications, there’s very little money flowing to each of those newspapers and magazines,” he says. “That $10 a month is being divided over and over again until it’s fractions of a penny to each of those publishers.”

Kennedy calls this the “Spotify problem,” explaining that Spotify’s music subscription service, while convenient for users, is profitable neither for artists nor Spotify itself.

“It’s a lose/lose for everyone except the members, who are getting this terrific service,” he says. Kennedy predicts a similar situation for publishers on Apple News Plus, at a time when newspapers are seeing increases in direct subscriptions anyway.

The Boston Globe reported that it had 100,000 online subscribers in October, Kennedy says, and newspapers such as The New York Times and The Washington Post have seen big jumps in digital subscriptions recently.

“There are at least some newspapers are moving toward profitability on the digital subscription front, and that means they’re keeping all that money for themselves,” Kennedy says.

There’s also a “Facebook problem” with Apple News Plus, he says, in that it removes the publisher’s control over who sees what news, and when.

Only a few years ago, Kennedy says, news outlets were rushing to build partnerships with Facebook, as a way of reaching a broader audience. Since then, Facebook has changed its algorithms and priorities, serving its users less news and more of their friends’ posts.

“Facebook has proven to be a terrible partner in so many ways,” Kennedy says. “You never know when you’re going to show up in people’s’ newsfeeds.”

Couple that with the revelations last year that political data firm Cambridge Analytica accessed the private data of millions of Facebook users—news that sparked Congressional hearings over internet privacy and data collection—and many news publishers have largely decided that “Facebook is just bad for democracy,” Kennedy says.

All of this has made it more appealing to news organizations to reach people directly, rather than through a tech company, he says.

“The idea of [users] paying one fee to Apple, and then having access to all this content sounds like an idea that publishers might have taken a close look at seven or eight years ago, but now? It doesn’t make a whole lot of sense,” Kennedy says.

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