New York Times CEO warns publishers ahead of Apple news launch
New York Times CEO warns publishers ahead of Apple news
launch
By Kenneth Li and Helen Coster Thursday, 21 March 2019
22:47 GMT
NEW YORK, March 21 (Reuters) - Apple Inc is expected to
launch an ambitious new entertainment and paid digital news service on Monday,
as the iPhone maker pushes back against streaming video leader Netflix Inc. But
it likely will not feature the New York Times Co.
Mark Thompson, chief executive of the biggest U.S.
newspaper by subscribers, warned that relying on third-party distribution 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," he told Reuters
in an interview on Thursday. "We're also generically worried about our
journalism being scrambled in a kind of Magimix (blender) with everyone else's
journalism."
Thompson, who took over as New York Times CEO in 2012 and
has overseen a massive expansion in its online readership, warned publishers
that they may suffer the same fate as television and film makers in the face of
Netflix's Hollywood insurgence.
"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 talks with Apple to participate in the
iPhone maker's new news service.
Thompson declined to comment on any conversations with
Apple. But he used the tale of how Netflix made huge inroads into Hollywood to
explain why the Times has avoided striking deals with digital platforms in
which it had little control over relationships with customers or its content.
"Even if Netflix offered you 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?" he
asked.
In 2007 the answer for Hollywood was yes. In exchange for
billions of dollars, studios helped Netflix launch a fledgling streaming video
service by licensing their libraries of shows and movies, but that decision may
have sown the seeds of their own demise.
By 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
to Walt Disney Co.
Apple is the latest company to offer a direct-to-consumer
streaming video, along with a news subscription service, by leveraging the
power of its more than 1 billion devices.
Through its subscription news service, Apple will charge
about $10 monthly for access to a variety of magazine and newspaper content,
according to media reports. Apple is expected to take 50 percent of the
revenue. The Wall Street Journal has agreed to join Apple's service, according
to a recent New York Times report. News Corp, owner of the Journal, was not
immediately reachable for comment.
A monthly digital subscription to the New York Times
costs $15, and Thompson said he has no plans to give that up to participate on
other platforms such as Apple's.
Last year, the Times generated over $700 million in
digital revenue, close to the company's target of $800 million in annual
digital sales by 2020. Digital ad revenue surpassed print ad revenue for the
first time in the fourth quarter of 2018. The Times has plowed investment back
into its newsroom, which at 1,550 journalists is now at its largest ever.
Despite the company's insistence on keeping readers on
its own products and platforms, Thompson said it has experimented on other
services, highlighting content the Times developed just for Snap Inc's Snapchat
app, which helped reach new, younger readers.
These new audiences, he said, will play a big role in
helping the Times reach its new target of 10 million subscribers by 2025.
(Reporting by Kenneth Li Editing by Bill Rigby)
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