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How Apple Could Benefit from Its Acquisition of Texture

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Access to more than 200 magazine titles

Apple (AAPL) is acquiring Next Issue Media, the owner of digital magazine subscription service Texture. Next Issue Media was founded in 2009 as a joint venture of several publishers such as Condé Nast, Hearst Magazines, and News Corporation (NWSA). Next Issue Media launched Texture in 2010, allowing consumers to access more than 200 magazine titles in one place. A Texture subscription costs $9.99 per month.

Apple didn’t disclose how much it was paying for Next Issue Media or its plan for Texture. However, the acquisition of Texture appears to fit with Apple’s efforts to build its Services division into a $48 billion revenue generator by 2020.

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Diversifying subscription business

Texture could expand and diversify Apple’s subscription services revenues. Apple already offers music and news subscriptions through Apple Music and Apple News, so Texture could allow it to add magazine subscriptions to the mix. Apple’s paid service subscriptions surpassed 240 million, which helped lift its services revenue to 18.0% YoY to $8.5 billion in fiscal 1Q18.

The acquisition of Texture could also help Apple guard against being caught up in the fake news controversy, which has put Facebook (FB), Google (GOOGL), and Twitter (TWTR) on the defensive.

“We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users,” said Eddy Cue, Apple’s head of software and services.

Multiplatform digital magazine app

The Texture app works with a variety of platforms, including Apple’s iOS, Google’s Android, and Microsoft’s (MSFT) Windows. Apple’s worldwide app sales increased 34.7% to $38.5 billion in 2017, according to Sensor Tower. Google’s app sales increased 34.2% in 2017.

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