NEW YORK (Reuters) – Apple Inc is expected to launch an ambitious new entertainment and paid for digital news service on Monday, as the iPhone maker pushes back against streaming video leader Netflix Inc. But it probably will not include the New York Times Co.
FILE PHOTO: Mark Thompson, president and CEO of the New York Times Company, poses for a portrait in New York, November 26, 2013. REUTERS/Lucas Jackson/File Photo
Mark Thompson, the ceo of the largest U.S. newspaper by subscribers, warned that the reliance on a third party distribution can be dangerous for publishers who risk losing control over their own product.
“We tend to be very leery about the idea of almost habituating people to find our journalism somewhere else,” he told Reuters in an interview on Thursday. “We are also generally concerned about our journalism is encoded in a sort of Magimix (blender) with all of the journalism.”
Thompson, who took over as the New York Times CEO in 2012 and has overseen a large expansion of its online readers, warned publishers that they have the same fate as television and film makers in the face of Netflix’s Hollywood rebellion.
“If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix,” Thompson said in response to questions about any discussions with Apple to take part in the iPhone-maker’s new news service.
Thompson declined to comment on talks with Apple. But he used the story of how Netflix’s huge rise in Hollywood to explain why the Times avoided striking deals with digital platforms which it had little control over the relationships with the customers, or the content thereof.
“Even if Netflix offers you a lot of money. … Does it really make sense to help Netflix build a giant base of subscribers to the point where they could actually spend $9 billion a year to create their own content and pays me less and less for my library?” he asked.
In 2007, the answer is for Hollywood was yes. In exchange for billions of dollars, studios helped Netflix launch of a fledgling streaming video service from their libraries of shows and movies, but that decision may have sown the seeds of their own demise.
In 2016, Time Warner Inc., was forced to sell itself to AT&T Inc and Rupert Murdoch sold his 21st Century Fox film and TV studios of Walt Disney Co.
Apple is the latest company to offer a direct-to-consumer streaming video, along with a news subscription, by making use of the power of the more than 1 billion devices.
By its subscription news service, Apple will charge about $10 per month for access to a variety of magazines and newspapers content, according to reports in the media. Apple is expected to be 50 percent of the revenue. The Wall Street Journal has agreed to join Apple’s service, according to a recent New York Times. News Corp, owner of the Magazine, was not immediately reachable for comment.
A monthly digital subscription to the New York Times costs $15, and Thompson said that he does not intend to give up to participate on other platforms, such as Apple’s.
Last year, the Times generated more than $700 million in digital revenue, close to the company’s target of $800 million in annual digital sales by 2020. The digital ad revenue surpassed print ad revenue for the first time in the fourth quarter of 2018. The Time has ploughed investment back to the editors, who at 1,550 journalists is now the largest ever.
Despite the emphasis on keeping the readers about its own products and platforms, Thompson said that it has experimented on other services, content, mark the Times developed for Snap Inc the Snapchat app, making it reach new, younger readers.
These new audiences, he said, will play a big role in helping the Times to reach its new goal of 10 million subscribers in 2025.
Reporting by Kenneth Li; Editing by Bill Rigby