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Apple will cut fees if publishers provide Apple News content

Apple CEO Tim Cook arrives for Apple’s “The Morning Show” World Premiere at Lincoln Center – David Geffen Hall on October 28, 2019 in New York City.

Angela Weiss | AFP | Getty Images

News publishers who participate in Apple News will be eligible to reduce Apple’s first-year app subscription reduction from 30% to 15%, Apple announced Thursday.

The move is the latest example of Apple providing exceptions to its 30% fee for in-app purchases for different industries and types of businesses, coming under increasing scrutiny and criticism from app developers, competitors and regulators.

Apple News is an app preinstalled on iPhones that displays a variety of news in one interface. It has 125 million monthly active users, Apple said, and the app is part of the company’s growing services business that accounted for 21% of Apple’s sales in the last quarter.

In order to get the discount, publishers will need to sign up for a new program that Apple calls the News Partner Program.

It will require news publishers to agree to provide all of their content to Apple in their preferred Apple News file format and to provide metadata or story information required by Apple. Publishers will also need to have an active and strong presence in the markets where Apple News is available.

Publishers will be able to apply to the program on Apple’s website starting Thursday.

Program participants will also be able to benefit from the reduced participation rate of 15% in the first year for subscriptions initiated through their own app as well as the Apple News app. Some publications have paywalls on Apple News and allow readers to subscribe through the app.

News publishers aren’t the most profitable apps on the App Store. In the United States, the 10 top-grossing publishers recorded just over $ 68 million in revenue in the first seven months of 2021, said Sensor Tower, a company that tracks the App Store trends. These companies include the editors of The New York Times, The Wall Street Journal, The Washington Post, Bloomberg News, and CNBC, all of which sell subscription access to paid stories through the Apple App Store.

Not the first program to cut App Store fees

Apple currently charges 30% of in-app purchases for the first year of a subscription billed through the App Store, but that socket is reduced to 15% if the customer subscribes for a second year.

Apple last year launched the App Store Small Business Program, which allows businesses with less than $ 1 million in net sales per year from Apple to also benefit from a reduced participation rate of 15%. This program would be more suitable for publishers who earn less than $ 1 million per year, Apple said.

Apple also has a program for established video providers, such as Amazon, that offers the 15% lower participation rate if companies integrate their apps with Siri and other Apple features.

Apple said on Wednesday it was launching the program to support publishers and ensure customers have access to quality information sources.

But the announcement comes as Apple’s 30% share of the majority of in-app purchases is under more pressure than ever.

A bipartisan bill currently being debated in Congress would target Apple’s in-app payment system and require the company to allow app developers to use other, less expensive payment processors.

A ruling in an Apple App Store policy-centric antitrust lawsuit is also expected later this year. Epic Games sued Apple in 2019 seeking to avoid its 30% fee on in-app purchases. Netflix and Spotify have removed the ability to subscribe to their services through the Apple App Store to avoid the 15% to 30% take.

Several overseas governments are reviewing the policies of the Apple App Store and its 30% discount. This week, a South Korean parliamentary committee took a key step to ban Apple from forcing developers to use its payment system.

Apple argued in court that its 30% commission is essentially the same as that of other online software stores like Google Play or video game console stores, and Apple’s fees have declined over the years. time.

Publishers weren’t told about the program until it launched, so there aren’t any named attendees yet, Apple said. Publishers who participate in the program will still be able to sell advertisements in Apple News and use other business models, such as affiliate links.

The program is separate from Apple News +, a subscription to a collection of digital magazines and newspapers that costs $ 9.99 per month in the United States.

The Apple News service is only available in the US, UK, Canada, and Australia, fewer international markets than other Apple services. Publishers outside of these countries can provide Apple with an RSS feed and access the program.

Apple has hired human editors to organize its Apple News feeds and to compile special packages on topics such as the coronavirus pandemic and the 2020 election.