By John P. Mello Jr.
18 April 2018 11:06 AM
Apple plans to launch a subscription service to the news over the next year.
The new service will combine features from its recent Texture acquisition and Apple's existing news app, Bloomberg reported Tuesday, citing people close to the subject.
Texture technology and its employees will be integrated into the Apple News team, which will build the new service, according to the report. The company will divide the revenues with the publishers.
Apple bought Texture, which gives access to more than 200 ezines for US $ 9.99 per month in March.
"We are delighted that Texture is joining Apple, with an impressive catalog of magazines from some of the world's largest publishers," said Eddy Cue, senior vice president of Apple's Internet Software and Services, at the announcement of the purchase.
"We are committed to quality journalism from reliable sources and allowing magazines to continue producing beautifully designed and engaging stories for users," he added.
Popular business model
Apple has had success in the past with subscription acquisitions. He bought Beats Music for $ 3 billion in 2014. At the time, Beats had less than a million subscribers. Now, it is part of Apple Music, which has more than 40 million users paying $ 9.99 per month for service.
This kind of success will be needed if Apple is to reach its goal of $ 50 billion in service revenue by 2021, noted Bloomberg.
Subscription services have become a trend in the provision of online content, noted Vincent Raynauld, assistant professor in the department of communication studies at
"Subscribers keep coming back, so it's a more stable model than a commercial-based company," he told the E-Commerce Times.
With the drop in satisfaction in the news published on social media, Apple could position itself to become a reliable source of online news.
"The false news is endemic," said Tim Bajarin, president of Creative Strategies.
"An organized news site that does only solid and verified journalism is of great interest to many Apple customers and others who do not want to face to false news, "he told the E-Commerce Times.
Solve the problem of the wall of pay
An Apple subscription news service could solve a problem faced by publishers who erect payment walls around their content. As subscribers, they can acquire must-have readers, but they can lose casual readers who do not read their publication enough for the subscription to be worth it.
"We are seeing some success from newspapers and other media outlets in pricing digital subscriptions," said Dan Kennedy, author of
The return of moguls: how Jeff Bezos and John Henry are redoing newspapers for the twenty-first century .
"Your most eager readers could pay one, two, maybe three digital subscriptions," he told the E-Commerce Times.
"By paying a subscription fee to Apple, you could have access to more than two or three news organizations," Kennedy said. "There is a potential for something like Apple News to become a main source of information for many people."
With some details on the new Apple service available, questions remain as to how this could affect existing publishers, many of whom charge a lot more than $ 9.99 per month for their digital subscriptions.
An alternative would be that the big players offer a subset of their content to Apple.
"They could get some money from Apple from that, while at the same time trying to persuade people to read their articles to become regular subscribers," Kennedy said.
The risks for publishers providing content to Apple may outweigh the benefits, noted Greg Sterling, vice president of strategy and insight for the Local Search Association.
"In the best case, Apple news represents additional revenue," he told the E-Commerce Times. "In the worst case, it could cannibalize potential direct subscriptions."
The Apple service could do a favor to wall publishers by conditioning consumers to pay for content, according to Sterling. "On the other hand, it could make people less tolerant to a myriad of wage barriers."