During his presentation on Monday, Apple CEO Tim Cook introduced the company’s news subscription service by talking about the joy of standing in front of a newsstand. “I love the feeling of being at the newsstand,” he said. “With all those beautiful and thought-provoking magazines covering so many topics.” The goal of the new Apple News Plus service, Cook said, would be to bring that feeling into the Apple ecosystem.
But if Apple News is supposed to be the digital equivalent of a newsstand, there’s still a big piece missing: newspapers. Apple News Plus includes access to more than 300 magazines, from highbrow journalism like The New Yorker to mass-market celebrity fair like People. But the service was only able to enlist three major newspapers — The Wall Street Journal, the Los Angeles Times, and the Toronto Star. It’s a strange weak point in the service, and one that could seriously jeopardize Cook’s goal of building an all-in-one location for reading news.
If you look at the project’s origins, it’s no surprise the service skews so heavily toward periodicals. Apple News Plus inherits the majority of its content from the app Texture, known as the “Netflix of magazines,” which Apple acquired this time last year. Apple seems to have done a lot of work in the year since to improve Texture’s offering — focusing more heavily on individual articles, making recommendation features, and adding more magazine titles.
When it comes to brokering deals for news content after the acquisition, Apple hasn’t gotten much further. Apple signed up several digital publications, including The Cut, Vulture, and a Vox imprint called The Highlight. (Disclosure: Vox and The Verge share the same parent company). Its lack of paid news services is also mitigated by the fact that a great number of websites and newspapers are available for free — even many paywalled publications will still send a small amount of content to Apple News.
But major national newspapers like The New York Times and The Washington Post have chosen not to join Apple’s subscription service and offer full access to their stories. That’s likely because they don’t need to. Those papers have seen a spike in subscribers in recent years — the Times recently hit 3 million digital-only subscriptions, the Post says its subscriptions tripled in size over two years — making them less reliant on a third-party aggregator willing to offer them only a share of a fraction of their usual fees. (The Times makes a small number of articles available through Apple News for free; the Post offers none.)
Apple also reportedly offered some poor terms for papers: Apple is said to take about half of the news service’s $10 per month fee, leaving just $5 per month from each subscriber to be split up among the papers and magazines that subscribers read. It’s a rough deal — Apple takes just 30 percent of App Store sales, and many already view that as too high — particularly for papers that are already succeeding at finding paying subscribers on their own.
That said, it’s not known how many other publishers were even offered the chance to decline a place in Apple’s service. Local news is struggling; a recent study found that nearly one in five local papers has disappeared in the last 15 years. And papers with smaller names than the Times likely don’t have the weight to pull in multimillion subscription numbers on their own. Even Gannett, the owner of USA Today and several dozen local papers, only has half a million digital-only subscribers. That could make Apple’s terms more appealing. The death of local papers — and the role technology has played it in — has gotten to the point where both Google and Facebook are spending hundreds of millions of dollars to support them, since their products are better when they have access to more high-quality stories to link to.
For the papers that do join Apple, they get the benefit of reaching readers who may not have otherwise found their stories. And very likely, that’s a lot of readers: the app is built into every iPhone, iPad, and Mac, and it’s opened by 85 million people each month. Turning even a percentage of those people into subscribers means giving publications access to hundreds of thousands of paying readers they didn’t previously have. That potential was apparently what brought the Journal on board — it can likely find new readers without losing the people who would pay for a subscription anyway, which allows them to read everything on the paper’s site.
That’s the pitch that ultimately got magazine publishers on board, too. According to Recode, Texture has always been paying magazine publishers about half of subscription revenue, giving them the same terms that newspapers are facing. The selling point was simply that they’d have access to far more paying readers. (Major publishers were also originally co-owners of Texture; they received a smaller cut until Apple took over.)
Both magazines and newspapers can also display ads inside of Apple News Plus. For newspapers, those are akin to the banner ads you see on their websites. For magazines, it’s the ads already printed on their pages, potentially making those ad deals even more valuable. If you’ve ever been mailed a magazine long after you stopped paying for it, you’re likely aware that sometimes a publisher would prefer losing your money to losing you as a reader altogether.
Apple almost seems resigned, for now, to not having newspapers. It framed Apple News Plus’ introduction around magazines and only mentioned news sources briefly, at the end of its presentation. And given the enormous amount of freely available news stories that Apple can pull in, maybe it isn’t as concerned with making News Plus — a misnomer, clearly — an all-encompassing news source.
But if Apple really does want to rebuild the newsstand, it has work to do. As Google and Facebook’s investments show, a news product is only as good as the stories it surfaces. There’s already plenty of incredible journalism available through Apple News and News Plus. But for now, Apple has yet to breach some of the most important paywalls in the business, and that could leave readers wanting more.