Apple News+ and Piracy (the colossus no one’s talking about)

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A few days after Apple’s News+ reveal, Digiday tersely summed up the reactions of the publishing community…

“Apple News+ splits publisher opinion,” the headline ran, arguably the best summary of the vastly different schools of thought that surfaced in response to Apple’s announcement.

Opinions ranged from the negative “another nail in magazine publishers’ coffin” and “bundles always dilute the brand,” to the positive “shows promise for publishers” and “could plug the gap in plummeting print circulations,” with even some mehs and maybes, like “may not threaten publishers after all” and the classic “it could have been worse.”

All the yays and nays on the issue have been hashed out by now, so we’re not going to discuss that. We’d rather deal with the elephant in the room, the 190bn behemoth that everyone conveniently forgot to talk about.

According to digital piracy data analysis specialist MUSO, whose global piracy data platform tracks different types of piracy—including publishing—there were more than 189 billion visits to piracy sites throughout 2018. The US—with 17bn visits—tops the list of countries with the most visits to piracy sites.

While entertainment (TV, films, music) constitutes the most popular content for piracy, it’s then followed by publishing (11.49%), which is almost double that of software piracy (6.16%). To put it in context, even though software piracy is the smallest component in the MUSO report, the commercial value of unlicensed software globally is $46.3 billion.

There is a wealth of insight to be garnered from piracy audience data that gives a comprehensive view of global content consumption.

Andy Chatterley, CEO and co-founder, MUSO

A quick internet search reveals the extent to which piracy is affecting the publishing industry. Not only are there dozens of specialized publishing-focused piracy sites and torrent-hosting platforms, even the leading general piracy sites have separate, burgeoning sections for magazines and newspapers.

For practically every leading publication we searched for, there were multiple copies of the latest versions and back issues readily available, for free, without even the necessity of registration. A few examples below:

The point is, Apple’s new all-you-can-eat magazine and news subscription is not so new after all. There’s already a massive market out there hungry for publishing content, and they are being served, quite efficiently, by piracy sites and torrent platforms.

Apple News+ is essentially making it easier for publishers to get paid from many who, for the lack of a better option, have been consuming the content through unauthorized sources.

This is exactly what Apple did with iTunes, by making piracy less enticing. The company offered an affordable alternative to piracy, and changed the music industry forever.

“Not everyone was thrilled. Record labels grumbled at being strong-armed over song prices by Apple CEO Steve Jobs. Some musicians complained that they didn’t earn enough royalties from digital-music sales,” notes an article from back in the day.

Sounds familiar, to the refrain today?

Nevertheless, Apple’s “unwelcome” intercession has eventually led to a situation, where after an 11-year slump, the industry is now growing by double-digits year after year, according to RIAA’s year-end music industry revenue report.

Texture, the precursor to Apple News+, launched in 2010 as a collaboration between publishers Condé Nast, Hearst, Meredith, Rogers Media and KKR. What the combined might of these publishing powerhouses could not achieve, in subscribers count, through 7-odd years, Apple News+ blew past within the first 48 hours, amassing more than 200,000 subscribers. That is no mean feat, and arguably a shadow of things to come.

While not everyone is impressed by those numbers, it’s worth remembering that naysayers had a field day after the launch of Apple’s music subscription service too, blithely declaring that “Apple Music has failed” and that it was potentially “an epic flop.” Incidentally, Apple Music just passed Spotify in paid subscribers.

On an interesting side-note, while Spotify and other streaming services are contesting a decision to raise songwriters’ rates, the Cupertino giant is getting kudos (and gaining subscribers) from the creators’ community for not being a part of the appeal.

Getting back to Apple News+ upending the piracy model—by making content readily available in one place and easy to pay for—it’s worth remembering that piracy sites often cater to the uberfans, who consume a lot of content but may not find it feasible to pay for dozens of individual subscriptions.

Note the piracy is most rampant, not in the least developed countries, but in places where publishers have their primary target audiences, like in USA, UK, France and Germany.

Piracy is essentially a usability problem. It’s already been established that given the right options, consumers are more than willing to pay, and piracy goes down as a consequence.

Some may argue that since the company caters to the higher end of the market, Apple’s audience will have limited overlap with consumers of pirated content. But that correlation may be tenuous.

First of all, for heavy content consumers, individually subscribing to their favorite publications might not be a viable financial option. Such consumers may find it easier to grab the content for free from the dozens of pirate sources available online.

But pirated content comes with attendant problems, like the risk of malware, numerous pop-up ads, restricted download speeds, and expired uploads. Plus most of the content is available as heavy PDF-files, which are not ideal for mobile consumption, via smartphones.

Some of these sites also offer a “premium” experience for users, charging them a fee for an ad-free experience and 1-click downloads. From the 189 billion visits to piracy sites, many readers are already paying for an all-you-can-eat magazine and news subscription, generating revenues for piracy sites rather than for publishers.

A service like Apple News+ reduces cost and increases ease of accessibility for users, and that—as Netflix, Spotify and Apple Music have shown—is also potentially good for publishers, bringing in the money that was going elsewhere.

Secondly, News+ may not always be limited to iDevices. Apple brought iTunes to Windows, and Apple Music is available on Android devices. Going cross-platform is something Apple has done before and is good at doing, as its successes with both shows.

And when that happens, opening up the service to over 2.5 billion Android users, Oprah’s “a billion pockets, y’all” may seem quite small in comparison.

While media commentators are arguing about who’s getting the bigger slice of the pie, Apple, just as it did with music, is quietly increasing the size of said pie—allowing for those who weren’t always included in the first place—which is good for all concerned.

Apple News+ is actually making it easier for publishers, to bring the faithful back into the fold.