Apple Inc. recently acquired the magazine app Texture and is now planning to integrate Texture into its own premium service called “Apple News”. As of now, Texture offers a monthly subscription to more than 200 magazines for $9.99. Apple has plans to launch this integrated version known as Apple News by next year and present a subscription with a percentage of revenue shared to publishers. This step is part of a wider move by the iPhone maker to generate revenue from online content and services.
At present, Apple takes 15 percent revenue cut from app subscriptions in the company’s App Store, and it charges 30 percent for regular app sales. Apple News will completely depend on people paying for quality news. As of now, it’s not clear how much Apple is willing to share with Apple News.
In the past, Apple had tried a similar approach. The iPhone maker closed its Newsstand app in favor of Apple News. The original app had digital versions of newspapers and magazines. Prior to that, Apple collaborated with News Corporation to create The Daily, an iPad version of news publication. However, after 2 years of operation News Corporation shut down The Daily, citing the lack of audience to create a sustainable business model as the reason for ending service.
In the past, Apple has seen success through similar acquisitions. Apple acquired Beats Music and the Beats audio device business in 2014 for a price of $3 billion. At the time of acquisition, Beats Music had less than a million subscribers. After the acquisition, and the integration of Beats Music into Apple, they rose to 40 million paid users.
Apple continues to work towards its aim of increasing its revenue by double by 2020. Paid subscriptions are a core strategy to achieve this goal. By the end of 2017, Apple had 240 million paid subscriptions, including the paid subscriptions of Apple music. Company executives are saying that they are targeting to generate service-oriented revenue of approximately $50 billion by 2021.