Apple News Has a Revenue Problem

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Apple News banner from the midterm electionsJournalists are struggling today. From China and Russia to the United States, governments are trying to turn people away from reliable sources of news to government-friendly sources of news. Beyond that, people have abandoned subscriptions, and don’t want to manage $50 worth of various subscriptions every month. With journalism moving online, news companies relied on ads for revenue. Then ad blocker usage rose. People are pushing for privacy and companies that rely on display ads are suffering.

Not everyone is like me. Not everyone does this as a hobby. Some people desperately need the revenue.

However, new apps promise to help make this better. Brave started with a browser and a tip jar, but people are less willing to change browsers, Brave still adds their own ads, and the company is lead by a noted homophobe. Scroll shows promise, especially since they’re working with Mozilla to work it into Firefox. But it’s not out yet. Then there are apps for finding news like those from Flipboard, Apple, Google, and Microsoft. However, in Apple’s case, the problem for journalists is more dire.

Apple has a number of policies that translate to dramatically lower ad revenue for journalists. In fact, Apple News only works for journalists when users ditch the service.

Triple Failings of Apple News

Apple News fails journalists in three ways. First, they block highly targeted ads, like those you’d find on Facebook, Instagram, Twitter, or Google searches. These are ads that track your browsing history across the web and translate it into interests. From those interests advertisers can target users with ads that are most likely to be successful. These ads are highly valuable, and ad impressions for them drive the core chunk of advertising revenue for websites. Of course, you’re likely happy these ads are blocked. They’re invasive and creepy.

Secondly, Apple does not allow programmatic advertising. This means ads must be pre-chosen by the content creator or by Apple. Apple strictly prohibits ads like those provided on a bidding service, preventing journalists from getting the most of their ad space.

Finally, Apple is supposed to fill ad space that doesn’t receive an ad with one of their own. As it turns out, they don’t. In fact, journalists are stating they’re seeing over three quarters of their ad spaces unsold.

Unintentional Benefits

I’m a news addict, but I don’t particularly like using Apple News, if I’m being honest. It’s great for discovery, but when you share those stories or save them in Pocket to use as a source later, you get an Apple News link rather than a direct link to the content. If they’re on an Apple device, they’ll see the content in Apple News, rather than in their browser.

If you’re using an ad blocker, Apple News may actually be slightly more likely to show an ad to you. However, for many people, it’s less likely. Interestingly though, a number of people, frustrated with Apple’s handling of the stories they’re trying to read, open their news stories in a browser. This has actually lead to an increased number of users accessing journalists’ websites. If you end up on a news site, you’ll helping them pay their overworked journalists who just have a passion for the news.

What Can Apple Do?

First, Apple can ensure they’re providing more ads for websites. The fact that they have so many empty slots is simply unacceptable.

Secondly, Apple could also allow ad targeting without giving advertisers access to your data. They could do this by storing information locally on your device, allowing it to request particular ads from Apple, not advertisers. Apple ensures none of this is traced, and everyone wins. Apple users continue to have privacy and advertisers can use targeted advertising. However, since this would feel like something that violates privacy, users are unlikely to sign up for it.

Finally, Apple should release a paid tier. This would allow users to browse many popular and paid sites without ads for a monthly fee. It’s one subscription that Apple shares with the people who write the news. If they pass along 85% of the ad revenue, as they do for subscriptions through the App Store after the first year, then journalists could finally get their fair compensation for their work.


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