Apple $AAPL might be going to launch a new magazine and news subscription service, according to a recent Bloomberg report. Rumors about potential new content service have been around since the company bought Texture, a magazine subscription service app
Let’s take a look at the most important factors which could have an impact on Apple online news and magazine service, and figure out what the potential barriers are.
Apple could be in the final stages of securing partners for the new service so it could be launched during the first quarter of 2019. This will be new, monthly paid subscription which would fit nicely into Apple’s overall services revenue growth strategy. The services segment is Apple’s second largest by revenue after the iPhone. The access to everything will cost almost $10 per month.
Apple wants to make sure its users have access to all of the content in the app for that low price, so this would not only allow Apple to make money from the subscriptions generated from the app, it would also give the company control over the subscribers.
One of the biggest problems for Apple now is that convincing news agencies and publishers to go along with this plan. On the one hand, it’s easy to do. Print magazine sales aren’t doing well, and many online publications are still trying to figure out the best way to maximize their revenue. Apple is said to be courting paywalled newspapers like The Wall Street Journal and The New York Times to join Texture and is working on a new design for the magazine content. Texture today offers access to more than 200 magazines, including Vanity Fair, EW, GQ, Vogue, Forbes, Time, People, Rolling Stone, Cosmopolitan, Sports Illustrated, and many others, including Bloomberg Businessweek.
On the other hand, no one’s going to hand over all of their content to readers for a low monthly price. The music industry fought the idea for a long time, and the media world is doing the same right now. It may be too hard for Apple to convince enough publications to go this route. If that’s the case, the service will not survive.
According to Bloomberg, Apple is trying to convince publishers that the number of users who are going to have access to service will be greater than the risk of handing over subscription control to Apple.
How Apple benefits
It’s unclear right now how Apple would earn money. You may remember that Apple changed the percentage amount it pays to developers who sell subscription-based apps back in 2016 from the previous 70%-30% split to the current 85%-15%
Apple is playing the long game in the services business, so investors should expect the company not to give up easily on the idea of selling subscriptions to news and magazines.