Apple has announced it will be reducing the cut it takes from most news publishers’ subscriptions. Instead of taking 30 percent of new subscribers’ payments, it’ll take 15 percent, boosting the take-home revenue for a new subscriber by about 21 percent
Is Apple’s move motivated out of altruism? This is unlikely. In August 2020, a squabble began between the game-maker Epic and Apple. Epic, publisher of Fortnite, protested that Apple takes its customary 30 percent cut of any money its users spend in games offered via the app store. This led to legal action, and Apple’s decision may signal the company’s concern as to which way the legal outcome is likely to go.
To gain a perspective on the recent events, Digital Journal caught up with Luke Taylor, COO & founder at TrafficGuard. Taylor believes that fair compensation for publishers and content producers is of paramount importance. He hopes that tech giants like Facebook and Google follow suit.
Looking at the next steps, Taylor’s assessment runs: “We must allow a negotiation of fair payment for the value that Apple, Google and Facebook derive from content they do not create themselves. It comes down to all media outlets having a say in how their intellectual property is managed. Journalism, content producers and news media deserve to be fairly paid by giants like Google and Facebook that profit from the content. It is unlikely that without intervention from governments these companies will voluntarily agree to pay for this content and the antitrust/monology hearings are the first step in making that happen.”
Additionally, Taylor says monetizing content through subscriptions — which from YouTube to the New York Times have been the rise due to the plunge in ad spend — is a helpful tactic.
In relation to this, Taylor says: “If you have a loyal and engaged audience, monetising through subscriptions often offers you the best returns. Getting to that stage takes time and consistency. In an age where so much content is available for free, competing against free content with a subscription service can be difficult. Monetising through advertising allows you to make money while keeping your content free for your audience, however, it is not without its own pitfalls…”
