Apple is making changes to its subscription bundle, Apple News Plus, after a slow start, publishing execs say

Apple

Apple is tweaking its 3-month-old news subscription bundle, Apple News Plus, after it got off to a slow start, publishing execs told Business Insider.
The bundle is key to Apple’s shift to drive more subscription revenue across various categories.
Some publishers said it’s still early days but that their revenue from Plus has been underwhelming.
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Apple News is going back to the drawing board with its 3-month-old Apple News Plus after a slow start for the news subscription bundle, according to publishers who have had conversations with the phone maker.

Apple introduced the subscription bundle on March 25 at a star-studded services event that featured Oprah Winfrey and Steven Spielberg. Plus was a relaunch of Texture, an all-you-can-read app that Apple bought in 2018. For $10 a month, Plus subscribers get access to more than 300 publications. It’s baked into Apple News, the news-reading app that appears on the home screen of Apple mobile devices.

Plus is key to Apple’s subscription strategy

Apple News Plus is a big part of Apple’s shift in its business model to get its phone owners to pay for subscriptions to news, music, and other products.

But publishers have had mixed views on Plus so far. Some saw it as a way to reap revenue from Apple’s massive customer base as many of them struggle to grow ad revenue. (Apple is sharing half of the revenue with publishers based on how much time users spend with the given publishers’ content, knowledgeable sources said.) The Wall Street Journal, New York magazine, Vox, and TheSkimm, opted in, as did Business Insider. Big magazine chains including Hearst, Meredith, and Condé Nast are also participating in the bundle, but are contractually obligated to do so as former owners of the app, according to sources.

Some publishers had concerns that the bundle would not produce meaningful revenue and that it would cannibalize their own subscription businesses, though. Major subscription publications The New York Times and Washington Post opted out of the bundle.

Apple gave away Plus for free for the first month, and in its first two days, it reportedly had about 200,000 subscribers, which is about what Texture had. But three months in, publishing execs who spoke for this article said the subscription revenue they’d gotten from the service was underwhelming based on two months of data after the trial ended.

Some publishers have called the revenue underwhelming

One publishing exec said Apple projected publishers would get 10 times the revenue they made from Texture at the end of Apple News Plus’ first year. "It’s one twentieth of what they said," the exec said. "It isn’t coming true."

Other publishers said their subscription revenue from Plus was lower than or on a par with what they got on Texture, which was small as a subscription driver to begin with.

Journal execs weren’t available for comment for this article but an exec there said in June that Plus had had minimal impact on the Journal’s existing subscription business.

"We’re very comfortable — it hasn’t had much of an impact on the core business," Suzi Watford said at the time. "It is a very different experience reading The Wall Street Journal on Apple News versus reading it on our platform."

Apple declined to comment for this story.

Some publishing execs said Apple News’ team had solicited input from them in meetings since the product’s launch. Those meetings have included Peter Stern, an Apple VP working on its cloud services; and Liz Schimel, head of news business at Apple News.

People in those meetings said Apple acknowledged to them that users were confused about the difference between the free articles and the new paid content in Apple News.

"They said users are concerned about what is free and not," one publishing exec said.

Publishers also discussed workflow concerns. Some said the app’s magazine-centric layout wasn’t well-suited to news content. Execs also said they wanted Apple to make it easier for them to convert their magazine content for the app. Another wanted the app to encourage users to spend more time in a given publication, since publications are paid based on the time users spend with them.

Apple is on a listening tour and tweaking the product

Apple said it’s working on making the product more intuitive for users while addressing publisher-side concerns, the execs said.

Some expressed surprise that while Apple is known for taking a perfectionist approach toward its phones and other hardware, Apple News Plus seemed to be unfinished. An opening for Apple News subscriptions marketing lead on LinkedIn wasn’t posted until May 8, two weeks after the product launched, and was still open as of June 28. Apple doesn’t seem to have promoted Plus apart from putting Plus-labeled stories in front of users of the free part of Apple News.

"I don’t think they’re putting their full effort behind it," one exec said.

Some publishers nevertheless remain optimistic that there’s a big chance to sell a lot of magazine subscriptions through Apple if it really promotes Plus and works out the kinks. It’s early, after all. Some made comparisons with Apple Music, which launched back in 2015 but reportedly surpassed Spotify in the US earlier this year. (The rebuttal to that is that there’s no natural demand for Plus as there is with music, though. As one exec said: "No one wants all-you-can-eat magazine content.")

Andy Wilson, SVP at Meredith, with mass-market magazines like Better Homes and Gardens and Parents, said the publisher had dedicated a 15- to 20-person team, the size of a small website staff, to make sure its 30-plus magazines looked as good as possible when they appeared in Plus.

"I think it’s a significant opportunity to lean into a premium product and present it in a mobile format," he said.

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Source: Business Insider – lmoses@businessinsider.com (Lucia Moses)