Apple News+ Needs to Rise from Its Slump

Apple News+ (AAPL), Apple’s subscription-based news service, may not be progressing well. After attracting 200,000 members in the first two days of its launch in March, the service hasn’t seen much interest, reported CNBC yesterday. The paid news app curates content from over three hundred magazines, top newspapers, and digital publications. It is available for $9.99 per month in the US, and $12.99 per month in Canada. The service is now also available in the UK and Australia.

User interface fails to impress subscribers

Most of the app’s problems seem to be related to its user interface and design. In April, Macworld associate editor Leif Johnson noted that the formatting for many magazines was off, and that searching for magazines and deleting the downloaded ones is difficult. And in September, 9to5Mac’s Bradley Chambers said, “Apple needs to focus less on trying to recreate a magazine experience inside of its News app and focus on the content.” These interface issues may be deterring subscribers.

Publishers unhappy with earnings

The slowing news subscriber growth is directly impacting publishers’ earnings. CNBC reported yesterday that for each Apple News+ subscriber, the company splits 50% of the revenue with the publisher. Out of the other half, the publisher is paid based on the reader’s time spent on the content.

In June, 9to5Mac reported Apple had promised publishers they would see ten times the earnings they saw from its now-closed Texture magazine app. However, publishers are receiving much less than that.

Competition for News+

Apple’s news service is set to have new competitors. In October, The Information revealed CNN’s plans to launch a news aggregation service with a mix of free advertising-based and premium subscription-based content. Additionally, News Corp has created a news aggregation service, Knewz.com, stated The Information.

Apple’s strategies to boost its paid news app

Yesterday, Bloomberg reported Apple might bundle its subscription services by 2020 to gain more subscribers. The bundle could include its news service, Apple Music, and Apple TV+. Additionally, Bloomberg cited sources hinting that Apple is already offering such deals to publishers, bundling the news app subscriptions with other paid digital services. This offer is something along the lines of Amazon Prime, where subscribers are shared across services. Bundling also helps create additional streams of income.

Apple is also working toward improving its news service. In May, 9to5Mac reported Apple senior VP Eddy Cue “says Apple has hundreds of employees from editorial to engineering and design working on Apple News+.”

Apple also needs to change the news service’s content strategy. In his September 9to5Mac article, Chambers suggested the iPhone maker must have a long-term vision about news creation and consumption. He said, “An Apple News+ strategy around the creation of independent content is the best path forward for a premium news service.”

Another deterrent to adding subscribers could be the service’s incompatibility across devices. Whereas Apple’s other subscription services, Apple Music and Apple TV+, are available across devices, its news service is only available to iOS devices. Texture, the news Apple acquired last year and then closed in May 2019, was compatible across devices.

A rebound in Apple’s news subscription is crucial

Like Netflix, Apple needs to start disclosing its paid subscriber count for more clarity. As Apple’s business model now depends heavily on subscription-based revenue, Apple News+ is integral. The iPhone maker has to strategize to focus on reviving the service. We’ll be watching closely to see if Apple succeeds in boosting the service’s subscription growth.