The tech giant bought the app in March. The magazine app allows users to have access to more than 200 magazines for $9.99 a month. Apple will add the app’s employees to its news team to create the premium subscription service. The news app is expected to debut within the next year. Magazine publishers, that are a part of the service, will be paid revenue.
This is not the first time that Apple has had a news subscription service. The tech company used to have an app, titled Newsstand. The app featured several newspapers and magazines. However, consumers had to pay for each publication individually. The company is hoping that their latest attempt will generate traction, much like its Apple Music counterpart.
Apple bought Beats Music in 2014 for $3 billion. After the acquisition, Apple was able to increase their amount of users by 40 percent. The streaming service now touts more than 40 million subscribers. It makes sense that Apple would try to recreate the success of Apple Music with its own news service. However, analysts warn that it may be a little harder to pull off.
“People pay for music, they pay for video, and most news services are ad-supported,” Apple Analyst Gene Munster said. “If Apple launches this as a similar business to Texture, they likely won’t have many subscribers.”
He believes that Apple could gain subscribers by charging a lower amount, but doubts that the company will be a massive success for the brand. Today, Apple is selling subscriptions for its iCloud storage and Apple Music. The company also makes money from subscriptions that stem from third-party apps in its App Store. Many believe that the tech giant will create a Netflix-style subscription service. However, nothing official has been announced.