Date
24 June 2018
Acquisition of a digital magazine platform will help Apple scale up its existing News app with more content from trusted sources. Photo: Reuters
Acquisition of a digital magazine platform will help Apple scale up its existing News app with more content from trusted sources. Photo: Reuters

Why Apple is acquiring a digital magazine platform

With iPhone sales growth slowing, Apple is seeking to bolster its content and services business to expand the revenue opportunities. In line with this strategy, the company unveiled a fresh initiative this week.  

The US tech giant announced on Monday that it is acquiring digital magazine subscription service Texture, making it clear that it is stepping up focus on news content operation.

Texture allows users unlimited access to more than 200 publications, including titles such as The New Yorker, Vanity Fair and National Geographic, at a monthly fee of about US$10.

By acquiring a business that offers access to a wide variety of content, Apple is attempting to boost its news aggregation service as well as build its own digital subscription platform for news content.

Apple did not disclose the amount it paid for the transaction, but said in a statement that the initiative is part of efforts to deliver “quality journalism from trusted sources”.

Texture, which was launched in 2010, may have been in Apple’s sights for some time. In 2016, the digital magazine service was among the apps bestowed with the “Best Of” honors by the editorial team of Apple’s App Store.

Texture, backed by entities such as Condé Nast, Hearst and Time Inc, was an experiment in which large publishers worked together to build a digital distribution platform and help the print industry transition to digital media.

The platform has been described as “the Netflix of magazines” due to its business model of offering unlimited access to a host of publications for a fixed monthly fee.

Texture has quite a few competitors offering similar subscription service for readers, including apps such as Magzter.

Among the tech behemoths, Amazon launched its own subscription services last year, and Google also offers a newsstand subscription platform via Google Play.

In acquiring Texture, Apple is sending a signal that it wants to cater more to the information needs of users and stave off the big tech rivals in that arena.

Eddy Cue, Apple’s senior vice president of Internet Software and Services, said Texture and the magazines on its platform will help boost the volume of longer articles on the Apple News app.

Texture will strengthen Apple’s existing News app which alerts users to articles about topics by publications they follow.

With social media platforms such as Facebook and Twitter coming under fire for spreading fake news and propaganda, Apple is likely to promote its News app as a trusted source of information with curated content.

The effort will gain traction as the iPhone maker needs to put in place new features and services to ensure user “stickiness” and brand loyalty.

Apple has been offering Apple Music, a digital streaming service, since 2015 after it acquired Beats Electronics the previous year. Originally just a music service, Apple Music began expanding into video in 2016.

The Texture deal now marks the second significant acquisition related to content after Beats.

While Apple will maintain Texture service as independent operation for more subscription revenue, the company is likely to integrate the new asset into its Apple News platform going forward.

That will help provide more valuable news content to users through customization.

Apple News is a free service to iPhone users, but the platform is playing a key role in helping publishers secure more page views as well as advertising income.

Apple News enables top media partners to use their own technology to deliver advertising along with content. It allows the Apple News platform to become, in a way, an extension of the publishers’ own websites. Moreover, the platform can help publishers to lure paid subscriptions.

Apple had in the past witnessed a failed experiment in News Corp’s “The Daily”, a digital-only publication on iPad. The iPad newspaper was shut in mid-December 2012, less than twenty-four months after a high-profile launch.

Heeding a lesson from that, Apple is avoiding producing news content on its own and opting instead to partner with established traditional news media for trusted content.

Offering outstanding content will be a key tool for Apple to boost user loyalty and stickiness, and provide a unique digital publishing ecosystem for publishers to monetize their content.

As it leverages the Texture acquisition, Apple is set to become a bigger force in the online content industry.

For publishers, which currently depend on Google and Facebook to drive a lot of their web traffic, they’ll have one more tech behemoth to contend with and be on the right side.

– Contact us at [email protected]

RC

EJ Insight writer

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