Why Bundling Could Save Apple News+ From Becoming a Newton-Level Flop

“They feel they’re wasting their money,” Samir Husni says of News+ customers

So far, it hasn’t been pretty for Apple News+.

The $9.99 per month service, offering Apple device users access to hundreds of magazines and major newspapers like The Wall Street Journal and the Los Angeles Times, has only grabbed about 200,000 subscribers since its late March debut, according to a recent report from CNBC. Considering there are 189 million active iPhones in the U.S., Apple has only enticed 1 out of every 945 iPhone users to sign up. That’s not an optimal conversion rate for a company with a $1.18 trillion market cap.

Right now, News+ is heading towards joining the Apple Newton as one of the company’s all-time flops. That’s why bundling News+ with TV+, its new streaming service, and Apple Music is it’s best — and perhaps only — path to long-term survival.

“A [bundle] would be one way to force feed adoption and drive up subscriber numbers, which alone could have positive marketing impact that drives overall Apple News+ awareness in the increasingly congested news marketplace,” CREATV Media chairman Peter Csathy said.

Paying for each service on their own comes out to $20 per month, yet the only service with established cachet at this point is Apple Music, which has more than 60 million customers. Apple is currently aiming to hook subscribers on TV+, and spent $20 million last month on advertising to help make it happen. Apple News+, on the other hand, hasn’t received much of a marketing push from the company since its launch; you’d be forgiven if you couldn’t remember what the service even is.

That’s a problem for its long-term prospects, and Apple would be wise give its customers another reason to check out News+. Shaving $5 off the trio and offering a $15 per month bundle package would work on several fronts. It would cover the monthly fee of Apple Music while helping Apple continue its pursuit of Spotify, the world’s leading music streaming service. Customers would then essentially be offered a buy one, get one free option when it comes to both TV+ and News+.

Apple representatives did not respond to TheWrap’s request for comment on News+ or a potential bundle.

At first blush, this may sound like a plan more appropriate for a small retailer than the world’s biggest tech company. But Apple’s chief priority right now should be acquiring customers for its two fledgling subscription services — to give people a reason to watch its shows or read print stories on News+. Apple seems to understand this when it comes to its new TV streaming service, since it’s giving TV+ away for “free” for a year if customers buy a new Apple device. News+ doesn’t have a similar deal and has since been either forgotten or shrugged off by Apple’s legion of supporters.

(The Apple Newton was such a notorious black eye for the company that “The Simpsons” lampooned in 1994.)

Talk to enough Apple users and you’ll hear a familiar refrain: Apple News+ simply isn’t compelling enough to pay for.

“It’s not that I’m opposed to paying for content — I have an online subscription to our local newspaper — but the value proposition just isn’t there for me,” Kirk Lennon, an Apple customer from Seattle, told TheWrap. “I occasionally see a subscription-required article when browsing the News app that looks interesting, but not $10-per-month interesting.”

The same goes for Anthony Dominguez, an avid Apple customer from Miami. “I have definitely seen [articles] I wanted to check out,” Dominguez said about browsing Apple’s standard News app and deciding whether to upgrade. “But it’s a bit pricey for news I can probably just find elsewhere online.”

Compounding matters, Apple News+ only offers limited access to its publications. For example, subscribers only receive the most recent three days worth of Wall Street Journal content; afterward, those stories go into the archive and users cannot read it. Content from outlets like Wired, which publish both magazine and digital articles, is also curtailed. Subscribers end up having access to some, but not all, of the prestige publications included in their monthly deal.

“This wholesale business will never work,” Samir Husni, director of the Magazine Innovation Center at the University of Mississippi, said. “People would rather pay $10 to get all of a magazine, even if it’s digital, than pay $10 to get something they don’t need and don’t want. They feel they’re wasting their money.”

That’s where a bundle could reengage customers that were initially turned off by News+. Bundle strategies “have proven to work for others,” Csathy said. He pointed to Disney’s recent bundle package of Disney+, ESPN+ and Hulu for $13 per month, as well as Amazon Prime including its Prime Video service as part of its membership, as two bundles that make sense.

A bundle would not only get News+ in front of customers again, but if it works, would help drive more business by keeping customers inside the Apple ecosystem. This is something Amazon has leaned on for years — knowing there’s a direct connection between customers watching its shows and toggling over to buy books, gadgets and toilet paper. Looking at this as simply a giveaway of News+ or TV+ would be too cynical: News+ is already in a hole and not adding much value to Apple. Including it in a bundle would, at minimum, give customers more reasons to interact with Apple services — and make them more likely to spend money in the Apple ecosystem.

Sean Burch

Sean Burch

Tech reporter • sean.burch@thewrap.com • @seanb44 


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