The recent launch of Apple News Plus is the biggest test yet for news bundling—the idea of selling access to a wide variety of news sources through one platform at one price.
Apple News Plus costs $9.99 a month for more than 300 titles, mostly magazines but also a few newspapers such as the Wall Street Journal and the Los Angeles Times. In general, local news organizations have not signed on, put off by Apple’s terms, which reportedly include Apple taking half of the revenue and not sharing subscriber data.
We sat down with Tim Franklin, head of the Medill Local News Initiative, to get his view. Franklin, former top editor at the Indianapolis Star, Orlando Sentinel and Baltimore Sun and former President of the Poynter Institute, is a Senior Associate Dean at Northwestern University’s Medill School of Journalism, Media, Integrated Marketing Communications.
Here is an edited transcript.
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Mark Jacob Is the idea of news bundling promising? Do you think there’s consumer interest in that as a sort of one-stop shopping?
Mark Jacob -
Tim Franklin I think what we’re seeing is an acceleration of a business model in which consumers pay. There are a number of different ways that can happen. It can be a one-on-one relationship between a news organization and a consumer, or it can be in one of these bundled packages that Apple News Plus represents. I think it’s an interesting experiment. It’s one that’s been talked about for a long time. It is incredibly convenient. I subscribed on the first day as a voracious magazine reader. I love the idea of it. It is a little overwhelming. You see 300-plus titles in there. We live in this era where, through search, you can find a specific story you want and then you can read it and it’s very transactional. I think that the Apple News Plus product is primarily geared toward people who are interested in news, who are traditional magazine/news consumers, but want an experience that’s more than just a one-off story. So this whole idea of a “Netflix for News” is a really interesting concept.
Apple has, what, 50 million plus Apple Music subscribers. As Oprah Winfrey said, “They’re in a billion-plus pockets, y’all.” So they’ll definitely be able to build some scale. I’ve seen some estimates that they’re already at more than 200,000 subscribers in just the first month or so. So I do think it will grow. Whether it’s a good deal for publishers and for news organizations is very much an open question.
Tim Franklin -
Mark Jacob Why has there been so much pushback with local news organizations on partnering with Apple?
Mark Jacob -
Tim Franklin Local news publishers need to be experimenting on platforms, but they’ve also been burned, especially by Facebook and by changes in its algorithm. Facebook for a while had the push to video and some publishers followed along and then that changed. Early last year, Facebook changed its algorithm again to sort of de-emphasize news and to emphasize engagement and conversations among friends. The danger of putting your content on other platforms has now been demonstrated. The potential huge implications of doing that have now been demonstrated by what’s happened on Facebook. I was just talking to a senior news executive yesterday who mentioned the big impact the Facebook algorithm change had on page views at their news organization. When you go up on a big tech platform like Facebook or now with Apple, you’re ceding control of your own fate in some ways. You want the eyeballs and you want the traffic, but there’s risk that goes along with that. The Facebook experience has sort of tarnished the luster of shifting your content to other platforms.
I think also that local news organizations and newspapers are now seeing the value of building a one-on-one relationship with the consumer and with citizens in their own markets. And they’re trying to build not just subscribers—they’re trying to build experience with those folks. It’s not just a newspaper subscription. You become a subscriber and then maybe we call you a “member” and you get a free ticket to our book fair or you get free admission to major speaker events or discounts at local stores. The benefits of having a bigger, broader experiential relationship with your own consumer. I think that’s the reason why newspaper publishers have been slow to jump on the Apple News Plus bandwagon.
Tim Franklin -
Mark Jacob Could Apple News Plus succeed just with magazines, without local news?
Mark Jacob -
Tim Franklin I think we have to wait and see. We’re only a month in. The user experience on Apple News Plus, I can tell you as a subscriber, needs work. It’s still a little clunky. It still can be difficult to find what you’re looking for. It’s not a completely intuitive experience yet. I think that needs to be worked on.
Tim Franklin -
Mark Jacob Could local news organizations go part of the way with Apple News Plus without going all-in?
Mark Jacob -
Tim Franklin The Wall Street Journal is an interesting case study because what the Journal is saying is: We’re going to put some of our commodity stories on Apple News Plus, and we’ll be part of the Apple News Plus ecosystem, but we’re going to keep a lot of our in-depth financial news and information behind our own paywall. What the Journal is doing is fascinating because it’s trying to find the sweet spot between profiting off bundled news products and preserving their own relationship with subscribers. Now, the Journal has a different scale than local news organizations do. It also has a ton of content, which local news organizations don’t have to the same degree. But the concept is really fascinating to me. If the Journal gets it right, they stand to gain a lot more revenue from Apple News Plus subscribers and at the same time preserve their digital subscription base. That has the potential to be a win-win for the Journal, and the question is: Could that be replicated by magazines or could it be replicated by local news organizations?
Tim Franklin -
Mark Jacob What’s the main stumbling block for local news outlets to join Apple News Plus: the revenue share or the reported refusal to share subscriber data?
Mark Jacob -
Tim Franklin I don’t think there is a single answer for the local news problem, and I certainly don’t think that at this point Apple News Plus is it. There are several issues. So, Apple is taking 50 percent of the revenue from Apple News Plus, and as I understand it, the other 50 percent will go to magazines or news organizations based on the amount of time spent on those stories. You’re not talking about a whole lot of money, for local news orgs at least, in that kind of scenario. And secondarily, news organizations want data on their readers, and they want to know what the readers are doing on their sites, what they’re reading, how much time they’re spending, what they’re sharing. That’s all incredibly valuable information, as we’ve seen in our own research at Medill. So not having access to that is a big deal for local publishers.
Tim Franklin -
Mark Jacob Doesn’t lack of access to the data threaten the local news organizations’ independence and their future ability to operate separately from a platform like Apple?
Mark Jacob -
Tim Franklin Absolutely. Those are big show-stoppers for local news organizations. And I think that’s why everybody from the New York Times to the Peoria Journal Star is not on Apple News Plus at the moment.
Tim Franklin -
Mark Jacob If local news outlets go it alone long-term, which ones have the best chance to succeed? What are the attributes that will make them survivors?
Mark Jacob -
Tim Franklin Most importantly, there has to be a value proposition for consumers to want to buy a subscription or invest in a local news outlet. So many newsrooms across the country have been cut to the bone over the last decade. Do they have the wherewithal to produce the kind of in-depth news report that people will want to invest in? If you’re a news outlet and you don’t have an in-depth news report that people are willing to buy, then you’re going to have big problems as we move to this model of digital subscriptions and user pay.
Then you have to find new and creative ways to engage readers where they’re at, and increasingly it’s on mobile devices. Local news organizations that figure out the best ways to tell stories on mobile are going to be the ones that flourish the most in the next few years. Also, being able to engage with readers in a really active way, whether that’s on Facebook, whether that’s on Twitter, whether that’s through community events. It’s making people feel like you’re a part of their lives and you’re indispensable in their lives.
Tim Franklin -
Mark Jacob In that way, wouldn’t Apple News Plus make your readers think that Apple News Plus was a part of their life rather than you being a part of their life?
Mark Jacob -
Tim Franklin Yes, they could, and that’s yet another risk. You end up in this magic mixer with all these other outlets. I think you see that on Facebook to some degree. I’ve seen some studies and I’ve heard anecdotally that readers who are trolling for news and information on Facebook don’t necessarily know where it came from. That’s a big risk, and that’s another reason why local news organizations have not jumped in this water, for concern that it could diminish the brand.
Tim Franklin -
Mark Jacob Local news organizations are in tough financial times. If Apple News Plus gave them all 60 percent of the cut instead of 50 percent, would they all say yes?
Mark Jacob -
Tim Franklin Money is obviously a huge part of it, and the relatively small cut that local news organizations would get is a major deterrent. I’m not sure going to 60 percent would change the dial enough. If instead of 200,000 Apple News Plus subscribers there were 50 million Apple News Plus subscribers, could that potentially change the equation? Maybe. It’s still a small portion but it’s a much larger pie. But at this point, given the size of Apple News Plus, the payout from the revenue share, the lack of information about your readers, there’s just not much reason for local news organizations to jump on the bandwagon.
Tim Franklin
The Facebook experience has sort of tarnished the luster of shifting your content to other platforms.
Tim Franklin, head of Medill Local News Initiative
What the [Wall Street] Journal is doing is fascinating because it’s trying to find the sweet spot between profiting off bundled news products and preserving their own relationship with subscribers.
Tim Franklin, head of Medill Local News Initiative
You end up in this magic mixer with all these other outlets. … That’s a big risk, and that’s another reason why local news organizations have not jumped in this water, for concern that it could diminish the brand.
Tim Franklin, head of Medill Local News Initiative
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