April 19, 2018
According to sources, Apple, which acquired the magazine app Texture, now plans to integrate it into Apple News and launch it as a premium subscription product. Texture let users subscribe to more than 200 magazines for $9.99 per month. Apple cut 20 Texture employees, and brought the rest onto the Apple News team. The premium subscription version of Apple News, which will reportedly debut in the next year, will give publishers a cut of the subscription revenue. Apple did not comment on the story.
Bloomberg reports that, “a new, simplified subscription service covering multiple publications could spur Apple News usage and generate new revenue in a similar manner to the $9.99 per month Apple Music offering.”
It’s referring to Apple’s success with purchasing Beats Music and the Beats device business in 2014 for $3 billion. Apple grew subscriptions from fewer than a million to more than 40 million. “Apple needs successes like that to meet a bold target for its services division,” it added.
Apple executives have stated that, “they’re targeting $50 billion by 2021” from the services sector, which grew 23 percent to $30 billion in fiscal 2017.
Loup Ventures co-founder/Apple analyst Gene Munster said that Apple might find it hard to repeat the success it had with Beats Music. “People pay for music, they pay for video, and most news services are ad-supported,” said Munster, who predicts that, “if Apple launches this as a similar business to Texture, they likely won’t have many subscribers.”
Even if Apple were to boost the current $9.99 subscription cost for Apple Music or Texture, it “won’t move the needle for Apple’s subscription business,” he added. Previously, Apple’s Newsstand app offered “several magazines and newspapers, but the publications were only provided on an individual subscription basis,” similar to Apple News when it launched in 2015.
In addition to Apple Music, Apple sells subscriptions for iCloud storage and “gets a cut of subscriptions sold by third-party apps on the App Store,” as well as “services revenue from Apple Pay transactions, App Store downloads, iTunes music, movie, and TV show purchases, and digital book downloads.”