What is Apple News +?
On Monday, Apple announced their “Netflix for news” or “Netflix for magazines” at the moment. They call it Apple News +. With $9.99/month, you have unlimited access to hundreds of magazines and several participating news outlets such as LA Times, Wall Street Journals, The Skimm or TechCrunch. Notable absences from Apple News+ are The Washington Post and NewYork Times
As common practice in the subscription world, the 1st month of Apple News+ is free. Once a user subscribes, the subscription is free for all family members. I never share any Apple services with my family members, so I am interested in how all that sharing with family members works and how they can avoid heavy scammers.
Apple claimed that they used “on-device intelligence” to suggest articles based on readers’ behavior. That way, Apple doesn’t know what users read. Additionally, advertisers won’t know what users read either, or at least that’s what Apple claimed.
From the demo, content on Apple News+ follows a specific format that is easy on the eyes and visually attractive. According to Macstories, out of 251 participating magazines, 125 are using Apple News Format, compared to 126 are still sticking to the old PDF format. Here are a couple of looks
Though the app allows browsing by alphabet and categories, some choices are not easy to find.
In fact, I needed to go to “Following” tab at the bottom, searched for Los Angeles Times to find the outlet. Then, I had to “follow” the LA Times to have it featured on my feed. If you want to look for TechCrunch or The Skimm, the search function in the following is probably the fastest way.
Does it make sense for popular news outlets to work with Apple?
With regard to revenue sharing, Apple reportedly seeks to keep 50% of the revenue from Apple News+ subscriptions while the other half is shared between the partners based on how much time is spent on each partner’s content. Partnering with Apple will potentially give publishers exposure to at least millions of Apple device owners, for now before Apple may decide to make the service available on Android. Publishers hope that their quality content and free marketing boost by being presented at an Apple event will catapult their digital business. On the other hand, there is also a “I already subscribed to Apple News+” risk from existing subscribers. In other words, if a user can access the same content while paying $9.99/month, why would he or she pay $39/month for WSJ, as an example?
Reportedly, even though publishers can’t have customer data, they will know what content is being read and can offer specific deals like newsletter. Plus, adhering to the new format championed by Apple requires an investment of time and effort. WSJ hires 50 more staff just for the partnership with Apple.
For the LA Times, it is understandable why they accepted the risk. The paper has 150,000 digital subscribers as of 15th March 2019. Compared to the 3 million digital-only subscribers and 4 million in total boasted by New York Times, or 1.71 million by the WSJ, the number is meagre. Hence, I can see the upside can justify the cannibalization risk. The same sentiment can be argued for the magazines. I don’t have the numbers for magazines, but I can’t imagine that their digital business is as big as LA Times or WSJ.
As for the WSJ, the math is more interesting. The WSJ has more to lose than the LA Times, but it is reported that users on Apple News + have access to only 3 days worth of archive. As an avid reader of the WSJ myself, it can be a challenge. I usually have to go back to articles even several weeks old for information. I guess that the management at the WSJ is betting that the avid readers will keep subscribing and the new revenue will flow in from extra consumption and new users.
It would be so interesting to see 6 months or a year from now whether partnership with Apple truly brings net benefits to the currently participating publishers. If it does, it will put the publishers that opt out right now, in an awkward position. Continue to stay out and risk losing more digital business or opt in?
What about readers?
I think the obvious winners here are the users. If you are an avid reader of even just a couple of magazines and news outlets, the deal is financially attractive. Some may argue that a normal user would never subscribe to that many publishers. Well, a normal Netflix user would never be able to consume all of their content library either. We are in the world of instant gratification and endless choice. I don’t see the difference here. Plus, you don’t have to worry about your data being collected by publishers as it would when you consume content on the web. Additionally, reading content in the new Apple News Format is a pleasant experience. I have an iPhone 5S and I liked what I saw. I can imagine the experience would be better on a bigger screen like newer iPhones and iPads. Finally, family members can use your subscriptions for free! At least for now!
In short, I find the launch of Apple News exciting. If there is one company that can pull this off, I can’t think of another one, except Apple. It has 900 million installed iPhones and 1.4 billion devices, a dedicated fan base, a household name and control over the iOS. The upcoming months will be interesting as I can’t wait to see the impact the new service has on the partnering publishers and how the result will change the dynamic between Apple and the opted out publishers. How would a competing service on Android look? Hope we can have some more color on the service at the upcoming earning call by Apple.