Tim Cook, CEO of Apple Inc.
Adam Jeffery | CNBC
Since Apple launched its paid news app, Apple News+, in March and signed on 200,000 subscribers in 48 hours, the company has struggled to add customers, according to people familiar with the matter.
Apple promoted the service at the time, telling potential customers that they could access over 300 top publications in categories including news, entertainment and sports for $9.99 a month. But while Apple doesn’t reveal the exact numbers of News+ subscribers to publishers, the figure hasn’t increased materially from its first couple days, said the people, who asked not to be named because those details are confidential.
By comparison, Apple Music, the digital music service that launched in 2015 to compete with Spotify, topped 60 million subscribers by mid-2019, according to Eddy Cue, Apple’s senior vice president of internet software and services. Subscriber growth for Apple News+ has disappointed several publishers who thought the product would bring in more revenue, the people said.
In recent months, Apple hasn’t put much marketing heft behind Apple News+, a premium product to regular Apple News, which curates top stories for iPhone and iPad owners. Apple News+ includes magazines such as People and Vanity Fair, newspapers such as The Los Angeles Times and The Wall Street Journal, and online publications like Vox, New York Magazine and theSkimm.
Bloomberg News reported Thursday that Apple is considering bundling Apple News+ with Apple Music, also priced at $9.99 per month, and Apple TV+, which costs $4.99 per month, as soon as next year. Apple News+ may have more value as part of a wider content bundle, similar to Amazon Prime, rather than as a standalone product. Regardless of which direction it takes, Apple is committed to improving its news product for years to come, the people familiar said.
For every subscriber of News+, Apple takes 50% of the revenue. The publishers split the other half based on time spent reading their content. One publisher told CNBC that his company received between $20,000 and $30,000 per month from Apple News+, a number far lower than it had initially expected.
Another publisher said that while subscription revenue growth was lower than anticipated, advertising revenue from Apple News, the free product, has slowly but consistently climbed. The person also said Apple News+ has brought in a different demographic of readers — younger and more female — than more direct forms of distribution.
An Apple spokesperson declined to comment.