Good news for publishers
Ray Snoddy welcomes the arrival of two very different intellectual creations – Apple News+ and the Copyright Directive
Mark Thompson, chief executive of the New York Times and former director-general of the BBC, is widely regarded as a smart cookie when it comes to the news business in print, online and broadcasting.
And therefore he is worth listening to when he gives his verdict on Apple’s shiny news app unveiled this week as part of a major dive into the services sector, including the unveiling of a streaming rival to Netflix and a new credit card.
The news app, Apple News+, which launches first in the US and will come to the UK later this year, will almost certainly have to do without the journalism of either the New York Times or the Washington Post.
Asked whether he would sign up with Apple, Thompson said the New York Times “tended to be leery” about the idea of “habituating people to find our journalism somewhere else.”
But he went further to look askance at the original decision by US broadcasters to sell their library shows to Netflix.
“If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix,” says Thompson with perhaps a trace of hindsight.
The rest of course is history. The networks, for short-term gold, created a monster international competitor now spending nearly $10 billion a year on original content and having to play catch-up with their own streaming services.
But is Thompson with a “p” right in standing aloof from a $9.99-a-month subscription service that can be marketed to 1.4 billion iPhones, iPads, iMacs, Apple watches and Apple TV boxes worldwide?
Thomson without a “p”, as in Robert Thomson, chief executive of News Corp, publishers of the Wall Street Journal and The Times, has come to the opposite conclusion.
Thomson of News Corp has welcomed the service as “a profound example of a technology company treating journalists and other premium content in a manner that benefits News Corp and the societies in which we operate.”
Both Thompson and Thomson could be right, according to their own lights.
The key to Thompson’s robust response to Apple can be found in the company’s latest accounts.
Thanks to the anti-Trump, “fake news” bounce-back, the New York Times company generated more than $700 million last year in digital revenues, with more than 3.3 million subscribers.
The company has set a target of 10 million digital subscribers by 2025.
And Thompson can do the math. He obviously prefers receiving 100 per cent of his own $15-a-month subscription fee than accept half of Apple’s $9.99-a-month sub, the percentage on offer.
Of course the potential of the Apple news app could be limitless, against a background of 1.4 billion devices.
There could come a day when $5 a pop could be worth more than $15 a time if the numbers go through the roof.
But be warned, a previous Apple attempt to get into the news business through NewsStand is no longer with us. Apple’s previous attempt to crash the TV market didn’t set the world alight either.
Thomson is probably counting that a smaller take from a potentially major initiative will gradually add up – and it already has the support of more than 300 publications, including the Los Angeles Times and Condé Naste magazines.
For Thomson the calculation includes the fact that Apple is recognising the worth of what News Corp produces and paying for it, compared to other sections of the social media ripping off the content of traditional publishers in return for often pitiful percentages of digital advertising revenue.
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Despite the perfectly respectable differences of opinion and approach by Thompson and Thomson, the arrival of Apple News + represents a maturing of the market. It is also overdue recognition that expensively created content should have its just reward.
It goes with the grain of history and developments elsewhere.
It was amusing to see the Daily Mail giving page lead treatment to moves to update and strengthen European copyright law so that creators of content would be paid for their intellectual property, particularly when lifted by the social media.
And where did this positive development emanate from? Why the European Parliament – the very Parliament that the Daily Mail has so strenuously been trying to remove us from for years.
The story does acknowledge that the Copyright Directive, which is likely to gain approval from the EU member states, is also likely to be implemented in the UK “regardless of the uncertainty around Brexit.”
There are of course opponents. Some believe that all content should be free. The founder of the worldwide web, Sir Tim Berners-Lee, fears the directive will stifle freedom of expression.
Up to a point.
Europe’s creative industries produce revenues of nearly £800 billion a year, account for 11.6 million jobs and nearly 7 per cent of Europe’s GDP.
There will be many arguments to come about the details. The search engines and social media feeds will be able to use “very short extracts” without having to pay but there is no definition of what a very short extract should be.
There are also protections for satire and creativity – such as using raw material to produce memes.
The important thing, particularly for newspapers, or newsbrands, is that the social media should pay for the reproduction online of professionally produced material.
The European Parliament believes that the new directive will turn out to be a powerful incentive for the tech giants – under fire almost everywhere – to accept their responsibilities as publishers and reach reasonable licensing deal to pay for the content of traditional publishers.
If this does not happen there is a danger that the young will become even more dependent on the reading of headlines – and only headlines – if they are not prepared to pay $9.99 a month for more extensive fare.
But that’s a different problem.
Right now it’s time to salute the arrival of two very different intellectual creations – Apple News + and the Copyright Directive – which should, over time, help to underpin the financial foundations of the existing media.