Digital Publishing Platforms
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Twice bitten, thrice shy: Publishers coy about Apple’s latest foray into news

In 2010, the publishing industry discovered God.

Or so it seemed.

The Economist portrayed Steve Jobs with a halo, gushing about “The book of Jobs”. Mathias Döpfner, the head of the powerful German publishing house Axel Springer, had a recommendation for publishers around the world: “Sit down once a day and pray to thank Steve Jobs that he is saving the publishing industry.” The iPad, Döpfner said, is “what we were all waiting for.”

And the normally staid Harvard Business Review was reporting:

Steve Jobs plops himself down on a couch and begins spinning a 10-inch aluminum pop tart on his finger. As if emerging from hypnosis, the executives miraculously awaken and a collective chorus of hallelujah spontaneously erupts and echoes down the halls of 6th Avenue. “We are saved,” the executives yell! “All hail Steve!”

Fast forward to 2018… the exuberance has been tempered.

Apple’s ‘Netflix for Magazines’ Getting a Chilly Reception,” runs a headline on Bloomberg. “Apple must understand what makes them tick if it wants to strike partnerships. Bullying is not always enough,” writes The Washington Post.

The mood is definitely less celebratory, and quite understandably so.

Neither did the iPad “save” the publishing industry, nor did Apple’s Newsstand app ever really take off (due to its own folly, not least its ludicrous 30% publisher cut), causing the company to fold the built-in app in 2015.

What Apple called Newsstand wasn’t a single fee for an array of publications like what Apple is developing now, but fears about Apple cannibalizing existing sales and controlling data on publications’ subscribers were sticking points with many partners then, too. Newsstand flopped, and participating publishers wasted time and resources on Steve Jobs’s ill-conceived plan.

Shira Ovide, Bloomberg Opinion Columnist

While Newsstand’s replacement, Apple News, has benefited publishers from a traffic distribution perspective, the partnership hasn’t significantly contributed to revenue generation.

Genesis of “Newsstand 2.0”

Earlier this year, the company acquired Texture, dubbed “the Netflix of magazines,” that lets users access to more than 200 magazines for $9.99 a month. Apple has been rallying publishers to join a new premium bundle offering that is expected to launch next spring.

Apple executives, led by content boss Eddy Cue, have reached out to the New York Times, the Wall Street Journal and the Washington Post about joining the app, according to Recode.

“Apple has a huge base of users … and could dramatically increase the papers’ reach,” says Peter Kafka, Executive Editor of Recode.

Apple has gone out of its way to position itself as a booster for news organizations — in part as a counterpoint to Facebook, which has frustrated many news publishers by changing its approach to news distribution multiple times.

Earlier this year, Apple hired Liz Schimel, a former Condé Nast and Comcast executive, and the chief digital officer for the media conglomerate Meredith Corporation, as its “head of news business.”

Biting no more

In spite of the company’s renewed efforts, publishers are not as eager anymore to jump on the Apple bandwagon.

“Apple’s reported pitch hasn’t changed in eight years: We’re Apple, and this will draw masses who wouldn’t have otherwise subscribed to your newspapers or magazines,” says Ovide. “Apple may be right, but the publishers that Apple really wants believe they’re better off luring readers on their own without Apple serving as a middleman.”

For example, some publications have been building their independent bases. The New York Times’ digital subscriptions have reached more than 2.5 million subscribers by the Q3 2018, their highest ever.

“The Texture reboot will test whether the all-you-can-eat subscription model popularized by Netflix Inc. and Spotify Technology SA can work for news,” wonders Bloomberg’s Gerry Smith. “But some executives fear Texture could end up doing more harm than good. Their concern is Apple could steal their current subscribers, who would save money by reading articles on Texture instead.”

Bloomberg reports that Apple has met with media executives to address concerns that a new Texture could siphon off subscribers. A team led by Eddy Cue and Liz Schimel has argued that Texture subscriber growth could generate enough revenue to exceed what media companies get from their own subscription businesses.

Beyond the duopoly

Apple is emphasizing that it will help continue to provide high-quality journalism from trusted sources to its customers, on some of the world’s most valuable online real estate: the screens of more than 1.3 billion devices. This way, it’s distinguishing itself from the duopoly, which has struggled to embrace free speech while curbing misinformation.

Apple, with its focus on human editors, is also suggesting an approach that goes beyond the algorithmic approach of its competitors.

We’re not trying to just give you the most popular stuff for you but some of the articles that you should be reading. We want that serendipity.

Eddy Cue, Apple’s SVP of Internet Software and Services 

Eddy says Apple is uniquely positioned to do this because it isn’t advertising-focused like Google or Facebook.

Apple has also reportedly compared the opportunity with Texture to their success with music. After the company bought Beats Music, it used it as the basis for launching Apple Music, which has now grown to over 50 million subscribers.

“If marketed properly—and Apple tends to do a good job marketing—it could work,” says Steven Brill, a journalist and media entrepreneur. “But only as a supplement to revenue that quality magazines get online from readers anyway. It’s not going be a substitute for that.”

It also comes at a time when digital traffic appears to be flattening. Pew Research Center reports that in Q4 2017, an average of 11.5 million monthly visitors visited the top 50 newspapers, making it the first year these sites did not see a traffic increase.

On the cusp of 2019, publishers are still praying. But this time, expectations are muted. 

It’ll be a miracle if Apple delivers.

Download WNIP’s new Media Moments 2018 report, which dives deeper into this year’s developments in publishing, and looks at what opportunities 2019 could usher in. The report is free and can be downloaded here.