Apple-Texture Integration : Apple’s Foray into Premium Subscription News Service

Apple Inc. recently announced its plan to start a premium subscription-based news service within the next year. They intend to achieve this by integrating their recent acquisition, Texture magazine app, into Apple News.

Apple Subscription News Service

What is Texture?

Texture is a subscription based-news app, i.e. you can read magazines or news articles on it for a certain cost ($9.99 per month for a basic subscription, and $14.99 per month for access to weekly like Time, Sports Illustrated and People). It was launched on Android in 2012 and was called as Next Issue initially. Next Issue is a joint venture between publishers Condé Nast, Hearst Magazines, Meredith Corporation, News Corp, Rogers Media, and Time Inc. In this initial phase, the app offered all-you-can-read access to a large library of digital magazines. Until late 2015, when they re-launched their app as Texture, they remained stagnant with no new updates or changes.

Texture app is different from its earlier version, Next Issue, in interesting ways – in-built search option, focus on individual articles and curation.

The search option lets the user explore news at a more personal and granular level. It also gives the user access to content that he or she may have never heard of before as it displays search results based on a phrase match of the search keyword. For instance, if someone searches for ‘horse racing’, it could display magazine articles about the statistics of gambling on horse races as well as sports magazines. This is a good bargain for publishers as they get easy access to new users. The app pays publishers based on the time a user spends on their articles, so having a good reach is very important. The app gives users access to over 15,000 back issues and more than 500,000 stories, this is apart from the direct and full access to more than 200 magazines.

The curation aspect of Texture works a bit like Spotify, wherein users can create their own collections based on their interests. Articles are also curated by a team of editors based on a certain theme (curated collections) or section (e.g.: New & Noteworthy section). The focus on individual articles instead of whole magazine downloads is about digitizing news consumption. Delivery a newspaper or magazine as it is online without any ‘intelligence’ or user expectation is not a viable model. Focus on articles is also the result of social media wherein users have gotten used to accessing content by simply clicking on links.

In Contrast to Apple News

Apple News is free of cost and only includes access to articles from websites. This implies that you could have access to stories published by a magazine or its associates online but not to whole issues. This is very different from a paid subscription service such as Texture. The immediate intuitive response to this difference is to simply declare Apple News as a more profitable or superior service but one has to remember that news magazines are not free even outside. Another reason this difference might not be as prominent as one might think is that nearly 70% of the content in the Texture app is not freely available in other digital channels and the app also has early access to some articles.

Apple’s Strategy of Acquisition – Remodel – Increase User base (subscription)

Apple followed a similar model in 2014 when they acquired headphone manufacturer and streaming provider, Beats. During this acquisition, Beats had less than one million subscribers but within a relatively short span of time, Apple turned that into more than 40 million paying users.

It is speculated that Apple would be banking on a similar strategy but news service is different from music, especially in the context of Twitter and Facebook. With almost every major news outlet having its own page and constant updates, an average consumer get access to a lot of real-time and free news. Another reason is that magazines, especially niche ones, are different from a newspaper in terms of consumer preference for hand-feel and authenticity, two elements that lack in digital magazine apps. But despite such drawbacks, Texture has done well and might very well continue to do so but whether it’ll have the potential to make a significant impact on Apple’s growth rate is doubtful.

A Complete Online Content and Services Environment

The ultimate aim of all of Apple’s service segment moves is linked to the creation of a richer, authentic and aesthetically-enhanced digital environment.

The importance of the services segment can be observed by the fact that sales growth in services segment outpaces that of iPhones. Sales from this segment grew by over 23% in the 2017 fiscal year to over $30 billion. The company aims to make this $50 billion by 2021. Such a high target indicates several heavy moves and further acquisitions in the coming five years.

Integrating a premium subscription magazine app would be a nice addition in this context. Currently, Apple’s services include– iCloud and Apple Music. Another reason for this move could also be to increase usage of Apple News and add additional revenue.

One significant drawback for paid-news is that most online news isn’t really paid, it’s ad-supported. How Apple plans on achieving a success similar to that of Apple Music would be a major question.

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