What does it mean for publishers when the world’s most valuable company buys Texture, the publishers’ own “Netflix for magazines” app? Probably something really good, though really different, for an aging industry grasping at any life preserver amidst the economic and technological squalls washing over it.
Apple this week announced that it had bought for an undisclosed sum Texture, a $10-a-month app that gives unlimited reading access to dozens of magazines, ranging from Adweek to Maxim to Yoga Journal, as well as prominent titles such as Sports Illustrated, National Geographic and The New Yorker. Texture launched in 2009, backed by a group of mostly New York-based publishers, and continues to enjoy a stout 4.8-star rating (out of 5) on the iTunes Store.
But the Apple acquisition promises to supercharge the app, perhaps with added Apple interface magic and promotion, but certainly with more prominent and regular exposure to hundreds of millions of iOS users. That could quickly benefit publisher bottom lines, too, even if it means unbundling the carefully targeted niche content they’ve been making for decades (or more, in the case of the Atlantic, founded in 1857, before the Civil War).
The news came during this week’s SXSW conference. Apple executive Eddy Cue took the stage to talk about Apple’s plans for video, news and much else. Cue oversees the company’s Internet software and services businesses, including Apple Music and its burgeoning investment in original programming.
Though Cue talked a fair amount about Apple’s billion-dollar investment in original video programming, the Texture acquisition provided an intriguing new dimension to Apple’s content investments.
Cue said Apple believes a shift coming in the way people consume content, and it has been spending significant money accordingly, if in a strategic and “picky” fashion rather than the wholesale acquisitions of Netflix.
And I think he’s right about that coming shift in audience preferences. Facebook’s fake-news and privacy black eyes, among much else, are helping encourage even younger audiences to pull back their use of social media. Those changing consumption patterns may lead to new business opportunities elsewhere, even for the most for media and entertainment companies.
Certainly major magazine chains sounded pleased about the potential of the Texture deal: “This new relationship with Apple not only will deliver new audiences and further the reach of our collective brands, but reflects the way consumers are engaging with media today as they look to discover content and subscribe with more convenience and ease,” said a joint statement from three of the chains.
It’s the latest sign of strength in the business of subscription content, an area where Apple has already invested heavily as it builds up the “Services” component of its ridiculously large bottom line. In the company’s most recent quarterly earnings, those Services – which include the iTunes Store, Apple Music and Apple Pay – topped $8.5 billion, up 18 percent from the same quarter a year ago. For comparison, an annual revenue rate of $34 billion in services would be two-and-half times the $13.3 billion market capitalization of Viacom.
Other companies and apps – including such as Medium, WattPad, Scribd, Zinio, Flipboard, and Apple’s own News app –have packaged text-based content from newspapers, magazines and online sources in varying ways and with varying success. Later this year, the Scroll app is expected to debut. It’s a $5 a month app with content from an array of formerly print-centered media companies, and is owned by Gannett and News Corp. among others.
Cue said that Apple is now “making big investments” on original content. Not surprisingly, given the more than $200 billion cash hoard Apple controls, Cue said spending on content “isn’t an issue.”
Even if Cue was talking at the time about Apple’s video investments, that mindset has to be the monetary equivalent of manna for most cash-starved traditional publishers. A little extra Texture could look very good on this very big Apple.