Apple Is Planning to Launch a News Subscription Service
Apple Is Planning to Launch a News Subscription Service
Company integrating Texture purchase into Apple News
offering
About 20 Texture staff were cut soon after Apple
acquisition
By Mark Gurman and Gerry Smith April 17, 2018, 4:00 AM
PDT
Apple Inc. plans to integrate recently acquired magazine
app Texture into Apple News and debut its own premium subscription offering,
according to people familiar with the matter. The move is part of a broader
push by the iPhone maker to generate more revenue from online content and
services.
The Cupertino, California company agreed last month to
buy Texture, which lets users subscribe to more than 200 magazines for $9.99 a
month. Apple cut about 20 Texture staff soon after, according to one of the
people.
The world’s largest technology company is integrating
Texture technology and the remaining employees into its Apple News team, which
is building the premium service. An upgraded Apple News app with the
subscription offering is expected to launch within the next year, and a slice
of the subscription revenue will go to magazine publishers that are part of the
program, the people said. They asked not to be identified discussing private
plans. Apple declined to comment.
Apple used to have an app called Newsstand that combined
several magazines and newspapers, but the publications were only provided on an
individual subscription basis. When Apple News started in 2015, it took a
similar approach.
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. That streaming service was
also built through an acquisition: Apple bought Beats Music and the Beats audio
device business in 2014 for $3 billion. At the time, Beats Music had fewer than
a million subscribers, and Apple has turned that into more than 40 million
paying users.
Apple needs successes like that to meet a bold target for
its services division. Sales from that segment grew 23 percent to $30 billion
in the company’s 2017 fiscal year. Executives have said they’re targeting
services revenue of roughly $50 billion by 2021. During a recent earnings
conference call, Apple told analysts it had a total of 240 million paid
subscriptions, with 58 percent year-over-year growth.
Services revenue includes Apple Music, iCloud, Apple Pay,
App Store downloads and subscriptions, and iTunes purchases.
Currently, Apple sells subscriptions for iCloud storage
and Apple Music. It also gets a cut of subscriptions sold by third-party apps
on the App Store. The company could also choose to turn its original video
content efforts into its own Netflix-like video subscription service. Apple
also gets services revenue from Apple Pay transactions, App Store downloads,
iTunes music, movie, and TV show purchases, and digital book downloads.
Job reductions at Texture aren’t necessarily a sign that
the news subscription effort is off to a slow start. Apple rarely cuts
positions, but after the company acquired Beats, it released about 200 people.
This time, Apple let roughly 20 people go from Texture, including assistants,
software engineers, and managers, according to one of the people familiar with
the matter. Texture had about 100 staff.
— With assistance by Alex Barinka
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