Last week Apple launched its biggest effort to own content and advertising in quite a while.
First, in iOS 9 they now allow ad-blockers. That means that you can browse the web in Safari and never need to see a single ad. This functionality has existed on desktop browsers for a while, but adding it to Safari on iOS gives many millions of daily page-views the chance to block ads.
And secondly, they rolled out Apple News. It’s a slick newsreader app that brings in content from all over the web. Publishers can advertise in Apple News two ways: if they sell the ads themselves, they keep 100%; if they use Apple’s plug-and-play ad network, Apple takes a 30% cut. Conveniently, Apple News doesn’t support ad-blockers.
What’s Apple’s game here?
They simply want to own content distribution, and they have a brilliant strategy to do it.
By enabling ad blockers, Apple has reduced the value of eyeballs that come via iPad and iPhone — thus making the allure of Apple News a bit more enticing.
Of course, the real key to getting all the publishers on board is to get engaged readers using Apple News.
By putting it on the homescreen of millions of iOS users, they already have a leg up. Now they are launching partnerships where certain content is available ONLY on Apple News:
This offers a pretty compelling reason to try out Apple News.
So, where do we land if Apple can grab distribution of news the way they have music?
The good: It might level the playing field and provide the elevated news consumption experience that many of us have been looking for.
The bad: Once everyone is playing Apple’s game, it’s Apple’s game. No negotiating deals, no handling distribution on your own, no cutting out the middleman. For better and worse, it won’t matter if you are Arthur Sulzberger or a columnist at a small town alt-weekly — everyone will be playing the same game.
Now, a thriving news industry is key to Apple’s success here, so they don’t want to steal a publication’s entire business, they just want a piece.
If they can make the industry more profitable by enough to offset their 30% cut, then this works. If not, they’ll be squeezing publications even tighter than they are already.
The next decade
In music, iTunes solved the immediate problem while a generation of businesses sprouted up to address new ones:
- Spotify, Rdio, and Pandora for live-streaming
- SoundCloud for independent artists
- HypeMachine, Songza, and others for curation
- Beats, Jawbone, UE, Sonos, and others for music hardware
Today — with the launch of a streaming service and curated radio — we see Apple starting to edge in to see which of these areas they can pick off.
It won’t be surprising if we see a similar path in news.
The benefits of a central reading experience
Great journalism is expensive. In addition to that, today’s publications are spending loads of time, money, and energy to offer their own apps and strive to keep up with Silicon Valley.
Unless technology — rather than content — is the core competency of a business (like Circa, perhaps) this probably doesn’t make sense.
Newsrooms should (and will) continue to be filled with developers going forward, but those resources are better utilized coming up with ways to collect data and tell stories, not building nearly-identical apps for every publication.
So the best part of Apple’s announcement is that it doesn’t require content creators to build apps, like their Newsstand did.
If you’re running a paywall, the details are murky so far — but some publications might only offer a subset of their stories through Apple News. (The question is how they’ll get those who read their free stuff on Apple News to jump over and pay for more stories in a totally separate app)
For ads, if you sell them yourself Apple charges nothing, but you can also sign up to have Apple sell them on your behalf — in which case they take a 30% cut.
Just like we’ve seen with Google Ads, it’s likely that powerhouse publications will handle this on their own and everyone else will go for the plug-and-play option. This is Apple’s first move into selling ads (the core business of Google and Facebook). It should get interesting.
Networks are the one of the most interesting things the internet has given us. By bringing people together to collaborate, share, curate, and grow together, a network is always more powerful, longer-lasting, and more interesting than a centralized, top-down model.
The network is the reason Medium is so exciting — by simple writing about something you care about, you can grow a community around it.
Apple News feels a bit centralized today, but they have big opportunities to create an engagement layer over the news, and it could be really interesting if they figure it out.
To understand the impact that Apple’s plans are going to have, and how quickly it will take hold, just think about this: Apple has sold more than 800 million iOS devices, and 50% of them have already upgraded — so Apple News is on hundreds of millions of devices already.
Every single person you see walking down the street with an iPhone or sitting at a cafe with an iPad will have this app. Even apps like Snapchat with rocketship success can’t get numbers like that in years — let alone in 6 days.
If Apple wins here — and they have the deck stacked in their favor — there’s a lot for the news industry to figure out.
There are plenty of ways Apple News might help journalism find sustainability.
But it is crucial for society to have journalists who speak truth to power, and it’s a bit scary to imagine journalism’s paychecks relying directly on the most valuable company in the world.
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