Poynter reporting: The news aggregator News.me launched Thursday morning as a subscription iPad app, with support from more than 20 major media outlets.
Built by Betaworks, the app aggregates and filters news from a wide variety of sources, but will pay a licensing fee to official media partners in return for use of their content. Articles from those partners has been reformatted for the “best reading experience” on the iPad according to an FAQ on the company’s website.
Consumer access to the app costs $0.99 a week, or $34.99 a year. Partners will receive a “fixed fee” for each unique page view; the company has not publicly stated what that fee will be.
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A few quick calculations point to the difficulty of turning fractions of a penny into significant profits. Assuming a user buys an annual subscription to the app, she would be paying $2.91 a month for access. To get an idea for the app’s break-even point on profit, I figured News.me’s royalty payments to publishers at half a penny ($0.005) per unique page view.
If a very active user looks at 14 pages per day, at a half-penny rate News.me would be paying out $2.01 a month in license fees to publishers. That is out of $2.03 each subscriber is worth after Apple takes its 30 percent.
Those are very rough calculations, and the licensing fee could be much lower (or be tiered to adjust for volume). But, that only points to the tension between fixed subscription revenues and flexible page view consumption.
At that same $0.005, each publisher would need 1 million views to earn just $5,000 monthly. So, lowering the royalty to make the app more profitable reduces the revenues each partner can expect to earn from the arrangement.
http://www.poynter.org/latest-news/media-lab/mobile-media/128743/news-me-prepares-to-launch-ipad-aggregator-with-ap-new-york-times-aol-as-media-partners
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