Me­dia com­pa­nies take plunge, gam­ble on Ap­ple News Plus app

The Buffalo News - - TASTE - By Ed­mund Lee

Like many other me­dia ex­ec­u­tives, Pamela Wasser­stein was wary of tech gi­ants and their at­tempts to go into busi­ness with con­tent cre­ators.

“There was great op­ti­mism around part­ner­ships, and I think that op­ti­mism has largely cooled, and peo­ple are now more cau­tious,” said Wasser­stein, the chief ex­ec­u­tive of New York Me­dia, the pub­lisher of New York mag­a­zine and web ti­tles like The Cut and Vul­ture.

But like oth­ers in her po­si­tion at pub­lish­ers such as Conde Nast, Dow Jones and Meredith Corp., she put cau­tion aside and joined Ap­ple’s me­dia ini­tia­tive, the re­cently un­veiled Ap­ple News Plus app, which prom­ises to blast out con­tent across more than a bil­lion de­vices world­wide.

The tech gi­ant based the ser­vice on an app it ac­quired last year called Tex­ture, which gave read­ers ac­cess to some 200 pub­li­ca­tions with a sin­gle sub­scrip­tion. The re­vamped and re­named ver­sion, in­tro­duced with much fan­fare last week at the com­pany’s head­quar­ters in Cu­per­tino, Calif., charges sub­scribers $9.99 a month for con­tent from more than 300 ti­tles, in­clud­ing the New Yorker, Van­ity Fair, Vogue, Time, the At­lantic, Peo­ple, the Los An­ge­les Times and the Wall Street Jour­nal. (Also in­cluded: Airbnb Mag­a­zine, Birds & Blooms, Retro Gamer and Salt Water Sports­man.)

Weigh­ing the pros and cons, Wasser­stein con­cluded that Ap­ple News Plus would al­low her pub­li­ca­tions to reach “a new au­di­ence in an en­vi­ron­ment that feels right for us.”

Go­ing into busi­ness with a tech gi­ant was a cal­cu­lated risk. Like most pub­lish­ers, New York Me­dia has seen its rev­enue shrink in an in­ter­net en­vi­ron­ment where Google and Face­book scoop up ad­ver­tis­ing dol­lars

and have great in­flu­ence over what peo­ple read. There’s a sense among Man­hat­tan’s me­dia ranks that any deal with Sil­i­con Val­ley amounts to a fool’s bar­gain.

Now, by ne­ces­sity, mag­a­zines, news­pa­pers and web­sites have learned to be pro­mis­cu­ous trades­men to stop re­ly­ing on one rev­enue source. They have em­braced new busi­ness lines like branded con­tent, con­fer­ences and pod­casts just to di­ver­sify and stay afloat.

Wasser­stein was among the pub­lish­ers at the Steve Jobs The­ater when Ap­ple un­veiled the ser­vice. On stage, Tim Cook, the chief ex­ec­u­tive, con­trasted Ap­ple’s ed­i­to­rial ap­proach to the “very dif­fer­ent choice” other com­pa­nies have made. It was a no­table re­mark, given the crit­i­cism of Face­book and Google over their role in spread­ing mis­in­for­ma­tion.

Ap­ple’s plan was some­thing al­to­gether dif­fer­ent, Cook promised. “This is go­ing to take Ap­ple News to a whole new level,” he said. Cheers bounced around the room – half oc­cu­pied by Ap­ple em­ploy­ees – as glossy mag­a­zine cov­ers skated across the gi­ant screen at his back.

The mar­ket­ing event seems to have ac­com­plished its goal. More than 200,000 peo­ple sub­scribed to Ap­ple News Plus in its first 48 hours – more than Tex­ture had amassed at its peak, ac­cord­ing to two peo­ple with knowl­edge of the fig­ures who asked not to be named to dis­cuss con­fi­den­tial in­for­ma­tion.

The New York Times and the Wash­ing­ton Post did not join the ef­fort, de­spite in­tense lob­by­ing from Ap­ple. Mark Thomp­son, the chief ex­ec­u­tive of the Times, said the prob­lem with the app, from his per­spec­tive, was how it “jumbled dif­fer­ent news sources into th­ese su­per­fi­cially at­trac­tive mix­tures,” mak­ing it dif­fi­cult for users to know which pub­li­ca­tion they’re con­sum­ing. A spokes­woman for the Post said the pa­per’s “fo­cus is on grow­ing our own sub­scrip­tion base,” mean­ing that it was not in­ter­ested in of­fer­ing its wares through another com­pany.

Some ex­ec­u­tives who said yes to the plan seemed less than san­guine, but they de­clined to com­ment pub­licly for fear of up­set­ting Ap­ple or vi­o­lat­ing the iron­clad nondis­clo­sure agree­ments the news com­pa­nies had signed.

In ad­di­tion to al­low­ing their pub­li­ca­tions to be part of Ap­ple’s big bun­dle, pub­lish­ers have risked can­ni­bal­iz­ing their own sub­scrip­tion ef­forts by sign­ing on. At $9.99 a month, Ap­ple News Plus is a bar­gain, es­pe­cially for ca­sual read­ers. The Jour­nal, by con­trast, charges a monthly fee of $39 a month for dig­i­tal ac­cess. On­line sub­scrip­tions to the New Yorker, Van­ity Fair and Wired – all owned by Conde Nast – to­gether cost more than $10 a month. The New Yorker by it­self costs $7.50.

The day af­ter the splashy an­nounce­ment, the New Yorker found it­self on the de­fen­sive af­ter a Reuters head­line blared: “Is it time to dump your New Yorker sub­scrip­tion?” In re­ply, Michael Luo, the ed­i­tor of the New Yorker’s web­site, sounded off in a 13-part tweet­storm ad­vis­ing read­ers not to dump the mag­a­zine. Only a por­tion of its archive would be avail­able on the Ap­ple ser­vice, he wrote, and read­ers could miss out on cer­tain ar­ti­cles by Ro­nan Far­row, Jane Mayer and Doreen St. Felix, not to men­tion the weekly cross­word.

“The best way to read ALL that we do @newyorker every day and every week is to sub­scribe,” Luo tweeted.

Pa­trick Soon-Shiong, the owner and pub­lisher of the Los An­ge­les Times, seemed un­wor­ried about ty­ing the pa­per’s for­tunes to Ap­ple, say­ing in an email that the ser­vice would “en­cour­age more peo­ple to pay for qual­ity con­tent.”

The Jour­nal re­ported that, thanks to the deal with Ap­ple, it would add 50 peo­ple to its news­room. But the union that rep­re­sents the pa­per’s em­ploy­ees noted the new job list­ings were open to con­tract work­ers.

“It would be the first time that we’d see a move to­ward an un­pro­tected work­force,” Tim Martell, the union’s ex­ec­u­tive direc­tor, said. “We don’t like the un­cer­tainty.”

To abide by the union’s con­tract with the Jour­nal, Martell added, con­tract work­ers in the news­room would be al­lowed to work for a max­i­mum of 12 months. That sug­gests the Jour­nal sees th­ese hires as a tem­po­rary as­sign­ment – a com­pro­mise ap­proach – as it gauges the ben­e­fits and costs of the Ap­ple part­ner­ship.

The ma­jor­ity of Jour­nal sto­ries will ap­pear on the ser­vice, but with only a three-day archive. Con­tent for niche groups, such as CFO Jour­nal, which is aimed at the fi­nan­cial com­mu­nity, and CMO To­day, geared to­ward ad­ver­tis­ing pro­fes­sion­als, will not be in­cluded.

For Ru­pert Mur­doch, the owner of the Jour­nal since 2007, the part­ner­ship is a way for him to re­al­ize his long-held dream of turn­ing the pa­per into some­thing of in­ter­est to read­ers be­yond Wall Street and cor­po­rate board­rooms.

The mogul was the driv­ing force be­hind the Ap­ple deal, ac­cord­ing to two ex­ec­u­tives close to Mur­doch. He wants the Jour­nal to in­clude more gen­eral in­ter­est, sports and life­style cov­er­age, and the part­ner­ship with Ap­ple gives the pa­per a con­crete rea­son to move be­yond its core read­er­ship.

Un­swayed by sen­ti­ment, Mur­doch, 88, re­cently sold off the bulk of his tele­vi­sion and film prop­er­ties as he re­fo­cused on the news busi­ness and re­shaped his em­pire into an en­tity built to sur­vive the fi­nal steps of the dig­i­tal revo­lu­tion. He was able to ex­tract bet­ter terms from Ap­ple than other pub­lish­ers, the peo­ple close to him said, in­clud­ing the abil­ity to exit on a time frame that would be more fa­vor­able to the Jour­nal.

Mur­doch has worked with Ap­ple in the past. In 2011, when tablets were sup­pos­edly go­ing to save jour­nal­ism, he poured mil­lions into an iPad pub­li­ca­tion, the Daily, with the help of Ap­ple’s chief ex­ec­u­tive, Steve Jobs. The ef­fort failed to make its mark and was shut­tered af­ter less than two years.

Pub­li­ca­tions that orig­i­nated at the now de­funct Time Inc. – like Time, Sports Il­lus­trated and For­tune – are also part of Ap­ple News Plus. They were pushed into the ar­range­ment as part of a deal struck by Meredith, the com­pany that pur­chased them in 2017, ac­cord­ing to two news ex­ec­u­tives fa­mil­iar with the mat­ter. Al­though Meredith sold Time and For­tune last year and is look­ing to move Sports Il­lus­trated, the three pub­li­ca­tions ap­pear to be locked in to Ap­ple News Plus, at least for the time be­ing. (Meredith and Ap­ple de­clined to com­ment.)

The eco­nom­ics of Ap­ple’s ven­ture will vary from ti­tle to ti­tle. Af­ter the com­pany takes half the sub­scrip­tion price, its part­ners will split the rest. How much each me­dia com­pany re­ceives is based on the amount of time read­ers de­vote to its con­tent. That model mim­ics Spo­tify and Ap­ple Mu­sic, which pay record la­bels based on how of­ten their tracks are streamed.

The vis­i­bil­ity of in­di­vid­ual ar­ti­cles will de­pend on Ap­ple’s al­go­rithm, which takes into ac­count a user’s pref­er­ence – you can “fol­low” a par­tic­u­lar mag­a­zine or topic – as well as the judg­ments of Lau­ren Kern, the ed­i­torin-chief of Ap­ple News, and her team.

In con­trast with Google and Face­book, Ap­ple has pro­moted the hu­man touch. The pres­ence of Kern, a for­mer ed­i­tor at New York mag­a­zine, has to some de­gree as­suaged pub­lish­ers’ fears of al­go­rith­mic tyranny.

“Lau­ren be­ing there gives me con­fi­dence, but it’s not that she knows who we are, but that she knows what great con­tent is,” said Wasser­stein, of New York Me­dia.

Al­though Kern pro­vides a link be­tween the news me­dia and Sil­i­con Val­ley, Ap­ple will also have to get used to the jour­nal­ists now part of its team. The New Yorker weighed in on the Cu­per­tino event with a satir­i­cal story head­lined “Tim Cook’s Big Ap­ple Cir­cus.”

Ap­ple got another taste of what it has signed up for af­ter it hosted a party last week for its new part­ners at the com­pany’s Lower Man­hat­tan loft. In its cov­er­age of the event, Van­ity Fair, one of those part­ners, in­cluded a quote from an un­named par­ty­goer who summed up the mood of the room and, per­haps, the in­dus­try at large.

The quote be­came the story’s head­line: “Are we at a party, or a wake?”

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