In March, Apple officially unveiled Apple News+, a brand new subscription service built upon digital magazine spines (and some digital newspapers). To build that service, Apple needed to acquire the “Netflix of magazines”, Texture. A new report aims to shed some light on just how much that acquisition last year cost Apple.
Texture recently confirmed that it was shutting down its services soon. For iOS users that’s not a huge loss, because Texture already cost $9.99 per month and that’s what Apple News+ costs. However, 30% of Texture’s users were on Android (and Windows), and those users won’t be able to access Apple News+ (unless they get an iOS device). That leaves them out in the cold for a subscription service with access to hundreds of magazines.
Now, The New York Post has put together a report that breaks down how the money situation worked behind-the-scenes. According to the publication, Apple’s acquisition worked out to be a total of $485 million, but it’s not just one lump sum of that size. To start, Apple reportedly paid $100 million upfront to companies Condé Nast, Rogers Media, Meredith, and Hearst — all of which are publishers.
Next, guaranteed payouts for those publishers upwards of $145 million for the first year. In the second and third years, Apple then guaranteed the companies an additional $240 million. Putting it all together, Apple’s acquisition of Texture is upwards of $485 million if all these numbers are the real deal.
Which means Apple sees a lot of potential with News+, but needs to see a return on that. According to a recent report, Apple News+ saw a total of 200,000 people sign up for the subscription service within its first 48 hours of availability. However, News+ comes with a 30-day free trial period (before it switches to $9.99 per month). Will all of those customers stick with the service? That remains to be seen.
Have you tried out Apple News+ yet?