Apple’s News+ Has Pitfalls and Potential

I have been a subscriber to Texture, the magazine subscription service that Apple bought in early 2018. This service has close to 300 magazines and, in my case, I subscribe to about 35. I subscribe to all of their food, tech, news and sports magazines and the two diabetic publications they have in Texture. If I had to pay for all of these on an annual basis, it would cost me over $600. Instead, I pay $120 annually. Of course, I don’t read all of them each month, but I get through as many of them as I can in my free time.

As Texture evolved, it added special sections where it curated top news and features extracted from many of the publications, and I could tailor these to my own personal preferences. This made keeping up with the most important stories published each month possible. I also liked the layout and format of the IOS Texture app, which sadly, will be shut down completely on May 28, 2019.

The reason this app is being shut down is that it has been integrated into the News+ app and is now a key feature of the Apple News service subscription. Since I am a big reader of magazines, subscribing to Apple News+ is a no brainer for me since it is the same price I pay for Texture but now get Apple’s curated News Service too.

However, I am in the minority when it comes to being a serious magazine reader. According to Forbes, “The newsstand’s decline is epic. Magazine circulation on the newsstand peaked in 2007, with a sales volume of $4.9 billion total. That number fell to an estimated $2.0 billion in 2017, according to the News Group, one of just two remaining magazine wholesalers.

The good news is that digital magazine readership is showing signs of some stability. These trends surely are part of Apple’s decision to back Digital magazines in their News+ service.

As for the state of Digital news, weighed in on this topic last summer:

“Gauging digital audience for the entire newspaper industry is difficult since many daily newspapers do not receive enough traffic to their websites to be measured by comScore, the data source relied on here. In the fourth quarter of 2017, there was an average of 11.5 million monthly unique visitors (across all devices) for these top 50 newspapers. This is nearly the same as in 2016 (11.7 million), making this the first year since we began tracking the trend that did not show a double-digit rise in web traffic: There was, for example, a 21% increase from 2015 to 2016 and an 18% rise from 2014 to 2015.”

While the numbers of news readers were flat, it did not see a decline. And Apple hopes that their News+ service can help this number of readers for newspapers and news sites rise in the future.

MediaWeek reported recently on what type of devices are used to access digital news, and not surprisingly, mobile devices were used often as digital readers:

“Eight in ten of the 13.2 million digital news media readers use mobile for general internet access and while this number is still surpassed by computers and laptops at 83%, mobiles will grow faster. Tablets are used by 46% of digital news media readers for internet access, and readers use an average of 2.4 devices to access the web.”

But the pitfall for Apple comes in the competition for new subscriptions that are already eating into people’s budgets. Our latest services research among US consumers shows that video subscriptions represent the highest number of paying subscribers. Music services represent the second highest as a whole, while News is only 7%. See chart below:

Subscriptions are a tough business, and consumers generally have a lot of them already. People also have to pay at least $75 for their monthly cell phone bills as well. So a news and magazine subscription on top of that could be hard for a lot of people and families to pay for and most likely not seen as a must-have as much as video, music and cell phones are to them.

In other data I’ve seen, looking at subscription intent, 63% of consumers are not considering a news subscription of any kind. That is a significant headwind for Apple News+ or any combined news service aiming at a US audience.

In my case, I pay $10 for Apple Music, $10 for Apple News+ and I also have Apple’s 2-gigabyte storage plan, which also costs $10. So each month I am already paying Apple $30. Add Apple’s new movie/TV subscription, and at the very least I would be paying Apple $40+ a month. I also pay for Netflix and Hulu.

In a recent twitter comment, Ben Bajarin suggested that Apple might end up doing some bundled subscription of Apple Music, Apple News+ and Apple TV+ for a reduced fee. I don’t know if this is true or if it will happen, but I think the idea of paying Apple perhaps $30 a month on top of their Netflix subscription, cable and cellphone bills may a bit hard to swallow for American families whose budgets are already stretched.

Apple recently introduced Apple TV+, which is more likely to be of greater interest to family’s if they are to add another subscription service from Apple. Although I am personally bullish on Apple News +, this is the one new subscription service from Apple that represents the greatest challenge for success, even though I believe it is one of Apple’s most important service offerings in their pipeline.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

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