Apple Buys Magazine SubscriberService -- WSJ
March 13 2018 - 3:02AM
Dow Jones News
By Tripp Mickle and Lukas I. Alpert
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 13, 2018).
Apple Inc. said it will acquire Next Issue Media LLC and its
digital-magazine-subscription service Texture, a product developed
by top magazine companies that bundles together some 200
subscriptions into one monthly service.
The acquisition comes as Apple looks to beef up its services
business, which includes music streaming and mobile payments.
Apple has set a goal of increasing total revenue from services
to more than $40 billion by 2020. The company generated nearly $30
billion in services revenue in its fiscal year ended in
September.
Apple typically takes a 15% cut of subscription services from
publishers and content providers, including Netflix Inc. and HBO,
if those subscriptions are purchased through the App Store.
Terms of the deal weren't disclosed. Next Issue Media and
Texture are owned by Condé Nast, Meredith Corp., Hearst Corp.,
Rogers Communications Inc. and KKR & Co.
The magazine industry for years has sought ways to transition
from print to online, but has faced profound challenges competing
with tech giants for digital ad dollars, while print ad revenue
continues to decline.
Last year, Alphabet Inc.'s Google and Facebook Inc. accounted
for more than 63% of U.S. digital ad spending, according to
eMarketer, while the magazine world has been buffeted by steady
cutbacks and numerous rounds of consolidation.
Next Issue, which launched in 2009, was envisioned as a way for
publishers to compete against tech titans like Apple, whose app
store has come to dominate distribution in the digital publishing
marketplace.
In a joint statement, Texture's key publishing investors said
the sale was in line with the shifting marketplace the industry has
faced.
"This new relationship with Apple not only will deliver new
audiences and further the reach of our collective brands, but
reflects the way consumers are engaging with media today as they
look to discover content and subscribe with more convenience and
ease," they said.
Texture, which offers a monthly, $10 subscription to magazines
such as Vanity Fair, Good Housekeeping, Time, Sports Illustrated,
and National Geographic, fits into Apple's effort to bring news and
information to iPhone and iPad users. The company launched Apple
News in 2015 and has been aggregating and providing news stories to
iPhone users since then.
"We are committed to quality journalism from trusted sources and
allowing magazines to keep producing beautifully designed and
engaging stories for users," said Eddy Cue, Apple's senior vice
president who oversees the services business.
Write to Tripp Mickle at Tripp.Mickle@wsj.com and Lukas I.
Alpert at lukas.alpert@wsj.com
(END) Dow Jones Newswires
March 13, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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