So, Apple’s much heralded and discussed push into a news bundle arrived last night. And it's… much as we expected: a bundled subscription for a whole load of magazines and a handful of newspapers. It’s available in the US and Canada now, with the UK coming later in the year.
Publishers share the revenue from the subs, based on some version of how well they attract reads.
This is, from the reader point of view, a pretty great offer. There are plenty of magazines that aren’t worth my time subscribing too, but which I will happily read elements of - and now I can more directly give them money for that. I imagine, now that the core package is right there in a well-used app, that we’ll see a big uptick in subscriptions from the Texture days — and a commensurate upticks in publisher revenues.
But how attractive is this for publishers?
The Publisher Perpective
There’s good news, and there’s bad news. The good news, of course, is that Apple clearly sees services as the next big driver of growth now that iPhone sales have, essentially plateaued. Apple News+ is part of that services narrative, and is thus getting much more attention than the company’s previous venture into this space: Newsstand
. That was the iPad “container” that allowed publisher to sell app subscriptions in the early days of the iPad. Despite much hype, it because the place where news and magazine apps went to be forgotten, and it was quietly done away with a few iterations of iOS back.
This new effort is right there on the home screens of most iOS devices, is integrated with Siri and the notifications screen, and already has millions of users. It gives news and journalism in its broadest sense a prominence on millions of devices that we could only have dreamed of a few years ago. And don’t underestimate the significance of the notifications screen in this. It, all by itself, converted my non news-reading wife into a news reader.
The bad news is that you can always guess how relatively important something is to Apple by where it comes in the keynote. The closer to the end it is, the more important the company deems it. And News+ was at the beginning.
Still, even if it’s running third to TV and gaming, it’s still there, and so we should take a serious look at what it brings to us.
Taking advantage of Apple News+
What to make of it? At its heart you should look at Apple News+ as two things:
- A place to make money from content from people who would never subscribe
- An opportunity to recruit new readers
The danger, in particular for magazine publishers, is that you end up swapping your exclusive subscribers for a cut of Apple’s subscribers. And Apple isn’t going to provide you with any analytics or customer data that would allow you to monetise those readers in other ways. It’s your cut of Apple’s recurring revenue, and that’s your lot.
Clearly, that’s undesirable, if you’re swapping subscription pounds for Apple News+ pennies.
If Apple News+ isn’t to cannibalise your existing market, you need to be sure you’re offering a subscription package that gives your reader more than just the magazine content replicated in Apple News+: subscriber-exclusive material (perhaps catering to the more committed readers in your field), events, other bonuses… Think of it this way: you have a fried egg audience. There’s the egg white audience, which is a mix of Apple News+ or website traffic, and then the egg yolk — the core readership — who you endeavour to have a deeper relationship with, and thus monetise through a great range of products.
Your core growth strategy then becomes of a mix of moving likely prospects from the egg white to the yolk - or making more money out of the yolk.
The WSJ Model
The Wall Street Journal
is pretty clearly using Apple News+ in exactly that way — an opportunity to gain extra monetisation from its more general reporting, while keeping its crown jewels locked away behind its own paywall. As Casey Newton put it last night
As described, it’s an odd arrangement. On one hand, the Journal is giving away hundreds of dollars worth of stories for some unknown, varying fraction of $9.99 a month. On the other hand, the company betting — and not without reason — that no actual Journal user wants to read the newspaper this way. And with a billion active iOS device users now available to them with a couple of taps, anyone who opts in is basically free money.
We’ve seen publications like The Economist do similar things with some of their reporting and Medium’s membership scheme. But I’d be prepared to put money on the fact that Apple News will pay out better than Medium is doing right now.
So, if they’ve got this right, no publishers should be too big to bundle…