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Why do Apple want to sell news?

Apple wants to increase its revenue from the services sector by launching its subscription service, Apple News,which is expected to be announced at its annual event on March 25.

Here we will try to read between the lines, how Apple is trying to redefine the news sector on the Internet, and why do you want to enter this sector? And why should you, as a user or digital publisher, be interested?

First there are five facts you should know:

  1. In the first quarter of 2019, service revenues in Apple grew by 28.2%.
  2. Revenue from subscription to the news application will increase the profits of this sector.
  3. Apple recently acquired digital texture applications.
  4. But the digital media sector suffers from poor returns.
  5. There are layoffs in large media outlets. !!

After you know the facts above, I think you have a perception of where the market is heading. Apple wants to enter a sector that suffers from low returns but wants to share profits with major media outlets. Such a thing can be hard to understand.

Apple is also suffering from some trouble. After more than a decade of growth and prosperity for iPhone, data for the first quarter of 2019 showed a decline, with iPhone sales revenue reaching 51.98 billion dollars compared to 61.6 billion dollars for the same period last year Reaching 15.6%.

On the other hand, services sector revenues grew by $ 10.9 billion, a growth of 28.2%. Apple will maximize the revenue of this segment through the service of movies and serials and then through the launch of subscription service in its news application.

The story began early after Apple’s acquisition of Digital Texture, entered into negotiations with the New York Times, the Wall Street Journal and the Washington Post to make their paid content available through the application, but faced reluctance.

According to the leaks, the subscription fee will be $ 10 and Apple will charge 50% to the publishers. Which is slightly higher than Apple’s application developers, which is 30%.

The presence of all these competitors in one service seems to be something that is not attractive to service providers, so sharing sharing revenue with Apple is crazy.

But Apple can use the number of its two billion active devices, to market the service and ensure more publishers. Has a ” more than 1.4 billion ” , even with the participation rate of Apple 50% of revenue will be the remaining remaining window of sale and important for these media, in order to achieve more revenue in this sector, which is suffering from crises.

There are three sources of income that depend on the media. First, the advertising, which is monopolized by Google and Facebook, then there is revenue from the sale of the content. Finally, there is the paid subscription system, which is dependent on major media outlets such as the New York Times, the Wall Street Journal, Apple reorganization or control this sector, you name it!

The crisis in revenue weakness accelerated the emergence of mass layoffs in major media companies, with Buzzfeed announcing a 15% reduction in its employees, Verizon said it would again cut the number of employees in the affiliate unit by 7%. Which includes HuffPost, Yahoo and AOL combined, means losing more than 1,000 jobs.

It is no secret to Apple that Apple has previously changed and redefined the music industry on the Internet. On April 28, 2003, Steve Jobs appeared on stage to announce iTunes Store, and then told us that the services available at the time Napster Napster “Kazaa” is bad and we must leave piracy. Eddie Keo, who was in charge of the store, expected Apple to sell 1 million songs in six months, but the store sold one million copies in six days. “History will remember this as a turning point in the music industry,” Jobs commented.

Apple will be used to the post-iPhone era, and perhaps the future will sell the iPhone at a very low price or cost, while the proceeds will come from other sectors , especially the service sector.

Locally, the Saudi Research and Marketing Group, the largest media group in the Middle East with more than a dozen publications and websites, has invested in digital content through partnerships with global media groups.

Where it announced its partnership with the Bloomberg Group and the launch of Bloomberg East . And then launched the Arabic version of the Independent newspaper in partnership with the British newspaper “The Independent”.

In terms of local content, it completed its acquisition of a 51% stake in numbers, while one of its subsidiaries also announced the launch of the mall .

In the publishing and distribution sector, National Distribution Company, a company owned by several press organizations, launched the Bookstore.com bookstore based on its large fleet of 1,400 vehicles and trucks covering all the cities of the Kingdom.

However, these moves are not enough and will not save the local press, whether paper or digital.

From here until next March we will see how Apple will change the way we follow the news. We will wait.

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