Apple’s Most Strategic Investment So Far This Year

on July 2, 2018
Reading Time: 4 minutes

There has been a lot of speculation lately that Apple is getting ready to create some media bundle that would be under subscription. According to multiple sites, the idea would be to bundle all of their media properties under a special program that mirrors something like Amazon’s Prime services.

I have no direct knowledge that this will happen but if you read the tea leaves surrounding Apple’s various acquisitions and new media emphasis, it is not too hard to see this possibility.

With that in mind, their most strategic investment so far this year that could be related to this is Texture, the magazine subscription service that has close to 200 magazines in this service for $9.99 a month. I am a big fan of Texture and use it almost daily to read highlighted articles they put in a particular article overview section as well as actual magazines I like to read, especially the food, sports and news magazines available.
The service itself has grown from about 20 magazines at launch to the 200+ available today, and now that Apple owns it, I suspect it will add many more new magazine titles to its offering in the future.

Recently, Apple has reintroduced a more robust version of their free News app, which includes human curation as well as ML and AI-based algorithms that try to block fake news and only deliver well researched and well-written stories that would be of interest to their customers.

I had a briefing on this News service when it relaunched and was highly impressed with the journalistic talent Apple has brought in to help curate this site as well as contribute to its content. In the past, I had not spent a lot of time in the Apple News app, but since it is now placed on the home screen of my iPhone X with the iOS 12 public beta, I find myself checking it multiple times a day to keep up with the news.

These two apps have become vital to me since getting fact-based news, and quality content has become critical in these days where fake news and political bias is blasted over social media and Facebook, Twitter and other sites that struggle with keeping this type of rhetoric in check.

Indeed, what has become essential to many is the ability to go to a site and know that what is there is the result of well-researched journalism and, at least in the news reporting sense, the stories they post are well written by professional journalists and can be trusted to be accurate.

Now that Apple also has Texture, it would be smart for them to integrate part of their News service into the Texture subscription service and innovate on both fronts. These combined properties could become vehicles for more in-depth stories, documentaries and even commentary that would be based on more personalized preferences. Apple is also big into AR. This could be the place where they integrate AR content and visual views and functionality in the News area which they control or even create dedicated AR/MR based magazines that would be part of Texture.

What makes this possible is that Apple has created a set of platforms that can easily reside on top of their already successful subscription services like iTunes and Apple Music. While Texture has its own subscription platform today, Apple could either integrate that into their existing subscription platform or take the magazine content and add it to their subscription infrastructure that they have now.

However, if they were to follow Amazon’s Prime example, then any service would also need to have video content too. Apple is way behind their competitors when it comes to video offerings and especially homegrown content, and they would need to be more aggressive in acquiring or creating much more movie, TV and theatrical shows that would be able to compete with Amazon, Netflix and others.

In our Techpinions Podcast last weekend, Ben Bajarin and Arthur Greenwald, a well known Hollywood producer who co-produced the Mr. Rogers show and knows a great deal about creating original content, gave a good perspective on the challenges Apple has when it comes to attracting talent and getting quality original shows to market.- Ben, summarize Arthurs key points here:

  • Apple’s challenges will be dealing with content failures and Hollywood’s “characters” who sometimes get into trouble socially
  • Apple is still experimenting and does not know if they want to be a network (like ABC) or premium channel (like HBO)
  • There are baseline metrics for success that indicates a shows return on investment. Apple’s bar may be different but hits are few and far between in network television.
  • Global success is a gold mine with content if it can be achieved. Apple’s potential upside is the global scale of their customer base.

Given these challenges, I would not be surprised to see Apple buy a couple of the smaller video production companies that already have hits in the market to accelerate their original programming. Also, given their tight relationship with Disney and Pixar, I could even see them trying to tap into some of their skills and content as well.

However, well planning by Apple when it comes to subscription infrastructure puts them in an excellent place to deliver an encompassing media subscription service, which makes it somewhat likely they will offer something like this in the near future. More importantly, with the right mix of content services and priced competitively, it could add significant revenue to their services program and bring more people into Apple hardware, software, and services ecosystem.

While still mostly a rumor, odds are that Apple is moving in this direction and Texture and an even more innovative News application could become one of the cornerstones of any subscription service they offer.