Soon to be announced Apple subscription service could disappoint participants
Now that Apple has introduced the new iPad Air (2019) and iPad Mini (2019), we won't see the company unveil the tablets at its March 25th press event. What we could see is the sequel to the AirPods Bluetooth wireless earphones, information on Apple's streaming video service, an actual launch date for the AirPower wireless charging pad (if we're lucky) and the unveiling of the subscription-based Apple News.
Rumors call for Apple to charge subscribers $10 per month to read a certain number of news and magazine stories a month, or all the news that can read depending on which rumor you believe. Whatever Apple decides to do, we know that some of the platform's content will come from Texture, the magazine subscription app it purchased last year. We also know that The Wall Street Journal has apparently decided to sign up for the service as a way to increase the distribution of its journalism to a larger audience.
Apple will keep 50% of the revenue generated by its service, and Business Insider says that the company has tried to sell major news publications on the idea that Apple News will have the same success that Apple Music has had. The latter currently has 50 million subscribers, and trails only Spotify in the global streaming music industry. The Apple News app currently has 85 million users, but typically only 1% to 2% of a publication's monthly active users will shell out to pay for the same service. So that would mean that the revamped Apple News might have less than 2 million subscribers initially.
"Based on our experiences with Apple Music, we're very good at running a subscription business. We know how to build a subscription business, and we're going to do that for news."-How Apple is selling its service according to one industry executive
Newspapers don't want to compete with their own online offerings
Two big-time newspapers that Apple would love to include in Apple News have yet to sign up with Apple. The New York Times and The Washington Post have thus far resisted Apple's approach. There could be some reasons for that. Despite the success that Apple has had with streaming music, the news industry is much different. One publishing executive whose company is not participating in the revamped Apple News says, "No one wants an all-you-can-eat magazine service. Magazines are passion points, whereas music, you do want a library." Another executive says that Apple is portraying itself as the savior to the print business after the iPhone arguably was the device that helped sink the newspaper industry.
Financially, the news publications that sign on to Apple might not rake in a whole lot of cash from their participation in the new venture. Some make more money selling digital subscriptions themselves. If Apple prices Apple News at $10 per month, 50% goes directly into Apple's coffers. The remaining $5.00 per subscriber is divided among the publications signing up. Meanwhile, consider that The New York Times sells digital subscriptions for $15 a month, and The Washington Post charges $10 a month and you can see why neither would want to cannibalize their business by signing up for Apple News. In fact, the real mystery is why The Wall Street Journal, which has a monthly subscription rate of $39, would want to get paid much less even if they can increase their digital circulation.
The answer could be in the demographics of Apple News subscribers. If they are older, one industry executive notes, subscribers will be less likely to have a digital subscription to a publication like the Journal. In a case like that, signing up with Apple News is a no brainer since the paper wouldn't be competing with itself.
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