Apple is planning to integrate its recently acquired Texture app into Apple News and create its own premium subscription-based offering. The move could lead to Apple Music-style subscription news platform and will lead to new form of revenue from online content and services.
The Cupertino-based company agreed to acquire Texture last month as it continues to strengthen its services-based businesses. Texture is an app that offers all-you-can-read access to more than 200 magazines for $9.99 per month. Bloomberg reports that Apple has cut 20 staff from Texture since that acquisition. The report adds that Apple is currently in the process of integrating Texture technology and the remaining employees into its Apple News team.
Since Apple confirmed buying Texture last month, it was clear that the company will eventually integrate it with Apple News. The Apple News team working on the premium service could have the service ready within the next year. Like Texture, Apple plans to give a part of the subscription revenue to the magazine publishers that join the program.
The news subscription service is not new for Apple. The company had an app called Newsstand that offered access to multiple magazines and newspapers but these publications were provided on an individual subscription basis. Apple replaced Newsstand with Apple News in 2015 and it also takes a similar approach of individual subscription.
Apple executives feel a new, simplified subscription service that covers multiple publications could spur Apple News usage. The service is widely seen as a way to generate revenue in a manner similar to that of Apple Music. Apple recently confirmed it has 40 million paid Apple Music subscribers and another 8 million users testing the service for free.
Apple Music was built into one of the fastest growing streaming music platforms by acquiring Beats Music and the audio device business in 2014 for $3 billion. Apple has a proven track record when it comes to acquiring companies and integrating them into its own services.
In the past few quarters, Apple has seen strong growth in revenue from the services businesses. It has been a silver lining especially when there is a decline in sales of products including iPhone, iPad and Mac in major markets. Apple CEO Tim Cook has frequently said that services division is equivalent to a Fortune 500 company in its own respect.
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Apple currently sells subscriptions for iCloud and Apple Music platforms. At a recent earnings call, it told analysts that it has a total of 240 million paid subscriptions and registered a 58 percent year-over-year growth. With Apple already rumored to be spinning out a Netflix-style video subscription platform within Apple Music, the company might have more subscription-based offerings than rivals soon.