Apple wants to create its own premium news service. The American smartphone giant acquired a company called Texture last month as part of its strategy towards this goal. Texture has often been referred to as the Netflix of online magazines. The company offers a total of 200 magazines online exclusively to its readers for only $9.99 a month.
Apple is expected to launch an Apple News app that will follow the same subscription model. Readers will get access to a number of publications for a fixed price each month. Apple will then share the revenue with its publishers. However, we still don’t know how much the company will charge per month.
This wouldn’t be the first time though that the smartphone maker has tried such an idea. Apple had earlier launched an app called Newsstand but the project was later killed. Apple instead decided to pursue Apple News and the timely acquisition of Texture was an important part of this whole plan.
Texture was initially owned by a company called Next Issue Media. Apple’s acquisition of the company comes at a time when online publishing has come under fire because of fake news. The company wants to build its brand as an authoritative news source with its new Apple News app.
Apple already offers curated content from third parties through its Apple News platform. This is the first time though that Apple will be offering a subscription service to give readers access to premium content. Apple had also previously partnered with a company called News Corporation to create The Daily, a news production service exclusive to iPad users. The partnership later fell through after two years due to what News Corp called a lack of audience.
Apple’s latest approach to the news service is designed to explore a subscription model. It’s more like the music streaming service offered by the company only that this time around instead of offering music Apple will be offering premium magazine content.
The biggest challenge for the company will be to get clients who are willing to pay for premium content. This has been a massive issue for many online publishers. There are a lot of free magazines that offer quality content for users without requiring any payment. Distinguishing itself from these free news sources will be the most difficult thing for Apple.
It’s also not clear whether Apple has already engaged with top publishers for their content. We do know so far that the company is proposing a revenue-sharing system with content providers. But the percentages are still not known. So far Apple takes a 15% cut from app subscriptions on its app store. We believe that there’s no reason that this will change with the new Apple News service. The company also charges a 30% commission on all in-app sales. Whether Apple News will have in-app sales or not is still a mystery. But there’s no doubt that publishers would want to see whatever options are available so they can diversify their revenue sources.