The launch of Apple's new streaming service next week isn't only going to be a nightmare for Netflix. It's a potential one for newspaper publishers, as well.
Apple on March 25 will announce a new entertainment and paid digital news service. Promoted under the slogan, "It's show time," the new service will introduce a streaming TV service that will give iPhone and iPad users access to free original content and subscription channels such as Starz and CBS All Access.
Despite the buzz about this new service driving up the price of Apple's stock, the tech firm has a lot of catching up to do against Apple Netflix, Disney, Hulu, and AT&T/Time Warner.
This new streaming service will also present a new kind of danger for embattled newspaper publishers barely coping with the onslaught of free digital news. Apple's new direct-to-consumer streaming video will come with a news subscription service that will send a non-stop feed of news to the more than 1 billion Apple devices worldwide.
Apple will charge some $10 monthly for access to a variety of magazine and newspaper content. Apple is expected to take 50 percent of the revenue. The Wall Street Journal has agreed to join Apple's new subscription service.
The New York Times, the biggest U.S. newspaper by subscribers, will have none of this. It warns other publishers they might suffer the same fate as television and film makers in the face of Netflix's wholesale gobbling up of content. And now, here comes Apple.
This potential loss of control over content is the reason why the Times has avoided striking deals with digital platforms such as Netflix, where it will have practically no control over relationships with customers or its content.
"If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix," said CEO Mark Thompson.
Thompson also warned publishers that relying on third-party distribution such as those provided by Netflix can be dangerous for publishers who risk losing control over their own product.
"We tend to be quite leery about the idea of almost habituating people to find our journalism somewhere else," said Thompson. "We're also generically worried about our journalism being scrambled in a kind of Magimix (blender) with everyone else's journalism."
He said that even Netflix offered publishers quite a lot of money. does it "really make sense to help Netflix build a gigantic base of subscribers to the point where they could actually spend $9 billion a year making their own content and will pay me less and less for my library?"
Recall that in 2007, Hollywood studios helped Netflix launch a fledgling streaming video service by licensing their libraries of shows and movies. That mistaken decision planted the seeds of their own demise as Netflix now is the greatest threat Hollywood faces.
A monthly digital subscription to the New York Times costs $15. Thompson said he has no plans to give that up to participate on other platforms such as Apple's. In 2018, the Times generated over $700 million in digital revenue.
