News app offers Apple a new monetization opportunity
Previously in this series, we discussed the details of Apple’s (AAPL) launch of its music streaming and Internet radio services at the Worldwide Developers Conference. Apple also unveiled its News app, which offers news content from more than 50 publications on consumers’ Apple devices. Some of the notable news sources include The New York Times (NYT), Walt Disney’s (DIS) ESPN, CNN, and Time magazine. Condé Nast content will also be available via this app.
Apple’s move is beneficial for the users who can access the news more quickly without browsing through different publications. This arrangement is also a win-win situation for content publishers as well as for Apple. Content providers can reach a large number of consumers who use Apple’s devices and likewise, Apple earns a cut on ad revenues that the articles will generate.
According to its terms and conditions, Apple allow publishers to keep 100% of the ad revenues if they display ads on their own. However, if they use Apple’s iAd platform for selling ads, Apple takes a 30% cut of the revenues earned from these ads.
Apple’s News app echoes Facebook’s Instant Articles tool
This service from Apple is similar to Facebook’s (FB) Instant Articles feature, which debuted in mid-May 2015. Instant Articles allows users to read articles within the Facebook News Feed without leaving the site, according to Facebook product manager Michael Reckhow.
These moves from Apple and Facebook underscore the fact that ad dollars are shifting to mobile devices. According to a report from eMarketer and as the chart above shows, worldwide mobile Internet ad spending could grow from $43 billion in 2014 to $196 billion in 2019 at a compound annual growth rate of 35%.
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