That was a weird press conference. It was ultimately fairly underwhelming, and I’m left wondering what the point of having it now was (though I have a theory at the end of this piece). But! There is tons of new media stuff to talk about. So let’s do that.
Apple News+
Apple News+ is what we all expected: a re-skin of Texture, costing $9.99/month for access to 300+ magazines, with some digital publications (notably theSkimm and a new brand from Vox) and newspapers (WSJ and LA Times in the US, The Star in Canada) thrown in too.
There are two ways to approach this: from a consumer’s POV and from the industry's POV. From a consumer perspective, this is a fantastic product. People can, and will, get their news from anywhere: there are enough free outlets out there that for the vast majority of people, actual news isn’t worth paying for. What people do want, and what’s currently difficult to access, is quality longform reading – the kind of stuff you read primarily to entertain you, rather than to inform you (though the latter is a nice side-effect). People are willing to pay for this, but the problem is that right now to get a solid daily supply of premium content you’d need to subscribe to a huge range of publications, which gets expensive fast. For consumers, magazine content is the perfect content for a bundled subscription. (If you’ll indulge me in being all “I told you so”, I said this to the founders of Compass News a few years ago – but they ultimately chose to focus on news).
Apple News+ is a wonderful product that gives you exactly that. From the press conference, news is very clearly not their focus (you do get full WSJ access, but they spent about a minute talking about that compared to ages on everything else). What they do want is to surface more thought-provoking, longform reads. Their usage of the dwell time metric for revenue share and choice of digital subscription partners (including Vox’s “signature features, essays, and explainers that are of the news but not on the news”) is evidence of that. And it’s a significantly better product than Texture ever was: not only will it be available internationally (Australia and UK this autumn, rest of Europe in the coming years), its integration into the main Apple News app means individual articles from magazine issues can be recommended to you, so you get a curated selection of the best content available without needing to trawl through all the filler stuff mags publish. Plus you can instantly share the subscription with your family, a feature Apple is clearly pushing very hard.
From an industry perspective, the product is less exciting. I sympathise with Joshua Benton’s lament that this won’t really help news publishers, and I get why companies like the NYT and Washington Post are wary about cannibalising their existing subscribers. But! The industry can pine for a different world all it wants, but ultimately it has to face the harsh reality of what consumers are actually willing to pay for. Yes, people exist who are willing to subscribe directly to newspapers. But the vast majority of consumers simply aren’t willing to pay for straight up news: it’s expensive, and the benefits of subscribing aren’t always clear. I think a good chunk of those people might be willing to subscribe to something like Apple News+, however, and with a free trial, decent pricing, and the millions of eyeballs Apple has, I think News+ will see decent adoption.
The economic value of a product isn’t what it costs to make it, it’s what people are willing to pay for it. A lot of journalists overestimate the value of their content – I think Apple News+ might finally prove that.
Apple TV Channels and Apple TV+
This hour-long segment of the keynote was very boring, but we gotta talk about it. Surprise surprise, Apple has been working with an all-star team of creatives (Steven Spielberg, Oprah, JJ Abrams, so many others) on producing original content, and they got them all on stage to tell you about their brilliant new shows.
So is this a Netflix competitor? Nope. Couple of stats: Apple’s spending $2 billion on content, Netflix is spending $15 billion. And, crucially, only 11% of Netflix’s catalogue are Netflix Originals: the vast majority of their content is licensed from other people. With that little spend and seemingly no third-party-licensing in place, Apple is clearly not even trying to compete with Netflix.
Recode’s Peter Kafka did a great job of explaining what’s actually going on here. The money to be made here is in the US-only Apple TV Channels product. Apple is going to sell people subscriptions to premium TV channels (HBO, Showtime, CBS All Access) through the Apple TV app, and Apple gets a cut of those subscriptions. This is a major money-printing machine: Amazon’s equivalent service made almost $2 billion in revenue last year.
In my estimation then, the original TV+ content has a few functions. One: it’s a way to get people to use the Apple TV app so they subscribe to HBO through Apple. Two: it’s a good branding exercise, associating the Apple brand with high-quality, social-impact-focussed content (diversity, feminism and tolerance were recurring themes in the keynote). Three: it’s a loss leader for its forthcoming bundled subscription.
That third point needs explanation, because Apple didn’t announce any such thing yesterday (so this is all speculation). But there were a few clues. Pricing wasn’t announced for TV+, nor was it announced for their gaming subscription service, Apple Arcade (which has a similar focus on niche, high-quality content). Both are apparently coming this autumn. And that’s when the new iPhones come out.
My elaborate explanation for all this: Apple announced all this services stuff yesterday to get it out of the way. They want their other keynotes (specifically this autumn’s iPhone keynote) to be product-focussed. But services are going to be a key part of the new iPhone. My guess is that after announcing the new iPhones, Apple will do a big reveal that you can get iCloud, Apple Music, News+, TV+ and Arcade in one subscription, it’ll cost $150 a year, be shareable with your whole family, and the new iPhones come with 3 months free. That’s the only thing that makes sense for me here: I can’t see TV+ or Arcade being worth anything as standalone products, but they are the most visible and sellable components of a bundled subscription.
I’ll revisit this paragraph in autumn to see how good that guess was. Fingers crossed, eh?
Final Thought
The media stuff was all well and good, but I think the biggest thing announced yesterday was the Apple Card, their new credit card in partnership with Goldman Sachs and MasterCard. It might not look that impressive to UK readers, who’ve had exciting challenger banks like Starling and Monzo for a while now, but my understanding is that something with this good a UX and zero-fees is pretty revolutionary for the States. And with it being so easy for iPhone subscribers to get, I think it’ll be pretty massive. (The UK challenger banks should be careful, too: if Apple bring the Card to the UK with their generous 1%+ cashback, it would blow Monzo et al out the water). Time will tell.
Thanks for reading this bonus issue of The Intersection, and have a lovely week.