Apple plans to integrate recently acquired magazine app Texture into Apple News and debut its own premium subscription offering, according to reports.
A new, simplified subscription service covering multiple publications could spur Apple News usage and generate new revenue in a similar manner to the $9.99 per month Apple Music offering. That streaming service was also built through an acquisition: Apple bought Beats Music and the Beats audio device business in 2014 for $3 billion (U.S.). At the time, Beats Music had fewer than a million subscribers, and Apple has turned that into more than 40 million paying users.
Apple needs successes like that to meet a bold target for its services division. Sales from that segment grew 23 per cent to $30 billion in the company’s 2017 fiscal year. Executives have said they’re targeting services revenue of roughly $50 billion by 2021. During a recent earnings conference call, Apple told analysts it had a total of 240 million paid subscriptions, with 58 per cent year-over-year growth.
Currently, Apple sells subscriptions for iCloud storage and Apple Music. It also gets a cut of subscriptions sold by third-party apps on the App Store. The company could also choose to turn its original video content efforts into its own Netflix-like video subscription service. Apple also gets services revenue from Apple Pay transactions, App Store downloads, iTunes music, movie, and TV show purchases, and digital book downloads.
Job reductions at Texture aren’t necessarily a sign that the news subscription effort is off to a slow start. Apple rarely cuts positions, but after the company acquired Beats, it released about 200 people. This time, Apple let roughly 20 people go from Texture, including assistants, software engineers, and managers, according to one of the people familiar with the matter. Texture had about 100 staff.