Great take from Recode’s Peter Kafka, as always, on why magazine publishers specifically are willing to swallow Apple’s 50-percent revenue split:
And some publishers are happy to do it, because they think Apple will sign up many millions of people to the new service. And they’d rather have a smaller percentage of a bigger number than a bigger chunk of a smaller number.
In the words of a publishing executive who is optimistic about Apple’s plans: “It’s the absolute dollars paid out that matters, not the percentage.”
In short, newspapers that have a thriving subscription business—like the Washington Post, Wall Street Journal, and New York Times—are understandably not thrilled, since they’re pulling in customer revenue already. But many magazine publishers specifically haven’t been as successful at turning readers into paying customers, so they’re falling back to a time-honored strategy of, yes, hoping to make it up in the volume of new customers that Apple will bring in.