Technology
Frederic Filloux: Apple will cost mags 50% per reader
April 1, 2019 7:05 am
Last Updated: January 11, 2020 9:36 am
From Filloux’ Monday Note: Apple News+ could lead to a massive value destruction for the magazine industry.
To assess the impact of a fully deployed Apple News+ I did the following calculation.
By joining Apple News+, the US magazine industry will lose 50 percent of its revenue per reader…
We don’t know how Apple News+ intends to distribute the subscription revenue. So let’s assume the platform will go for a revenue distribution based on the time spent per reader on a given publication. It will come to this:
These publications will have to split Apple’s meager net ARPU of $59 as opposed to a rate card of $227. They will collectively lose $168, a 74% evaporation of value for being on Apple news+.
My take: Having watched the value drain out Time Magazine through wave after wave of layoffs over nearly 30 years, I know that Apple isn’t to blame for the industry’s decline. But it still breaks my heart.