Apple’s Purchase of Texture is About the Value of Direct Relationships
It’s been a busy news week for F.A.A.N.G., the coined moniker for the collective of the most popular tech stocks that includes Facebook, Amazon, Apple, Netflix and Google. Facebook’s Mark Zuckerberg testified on Capitol Hill regarding data misappropriations, Amazon absorbed the President’s Twitter assault and Apple announced a key hire in Oliver Schusser to run Apple Music and oversee their international content; however, these stories are overshadowing an interesting acquisition of which marketers should pay close attention.
Apple, rather quietly, acquired the digital newsstand, Texture. Texture has been called the “Netflix of magazine publishing” because it has bundled together around 200 magazines to offer monthly subscribers digital access to for around $10 per month.“We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users,” said Eddie Cue, Apple’s SVP of Internet Software & Services.
This is an interesting acquisition in three ways:
First, this acquisition reflects how a digitally native company like Apple found sustainable value in the print publishing business, proving, at least for now, that print still reigns supreme for reader engagement.
Secondly, as more publishers increase their exploration of direct monetization opportunities, Apple’s acquisition serves as a further endorsement that these strategies will prove more sustainable for media companies than relying too heavily on advertising revenue.
Finally, Apple is looking to keep pace with Amazon and Google and their respective subscription services, focused on establishing and maintaining constant connection to consumer and audience preferences. This article won’t focus on the subscription priority, but suffice it to say, subscription plays a huge role in why Apple is doing this.
Magazine Quality Has Never Diminished
The publishing industry has endured its fair share of negative press and doomsday headlines over the past decade. But there’s one area where magazines have remained virtually unscathed — their lasting quality in storytelling and photography. Even in the most tumultuous of market conditions for magazines, when all advertising seemed to be migrating online, they never sacrificed their product. Editors, publishers and sales reps alike have all stood behind their brands. Magazines have continued to produce stimulating stories married with beautiful photography on the interests and passions of millions of people.
You won’t find repurposed articles or stock images in the leading publications because they never lost sight of their mission to connect with their readers in a meaningful way. These print businesses simply couldn’t afford to compromise the quality of their product. That’s not to say they aren’t immune to cost cutting given their decline in revenue stream. But what has always differentiated a magazine experience is its ability to deeply and uniquely engage reader’s interests and passions.
Apple’s purchase of Texture reinforces that this rigor in reader engagement is more important than ever, and is the key to pivoting to more direct monetization strategies, and consequently, more sustainable business models. Digital-first publications have been too focused on volume and have lost focus on quality. It’s clear that consumers are willing to pay publishers directly for better content.
Long Live Print
Coming from the print director, the headline above may seem very self-serving. But Apple’s Texture acquisition lends tremendous credence in the value offered by the magazine-model for quality content production. Print circulation has certainly diminished, but most, if not all of it, can be tied to faltering at the newsstand. The number of loyal subscribers has virtually remained the same.
In fact, very few publications have lowered their monthly ratebase to account for the dip in single-copy sales because subscribers account for the majority of their readership. According to the MPA, the audience for print and digital magazines actually increased by 5.4 million in 2016. And in this digital era, printed magazines continue to launch successfully.
Hearst launched “The Pioneer Woman” from Food Network’s celebrity chef Ree Drummond. The initial print run sold out on newsstand so Hearst printed more copies to meet the marketplace demand. The same could be said of Meredith’s “The Magnolia Journal” from Chip and Joanna Gaines. The magazine is on its fifth ratebase increase since the premier issue in October 2016 and will reach 1.3 million readers each issue in 2018.
Print is no longer a significant, spontaneous purchase as it used to be. But print should not be viewed simply as a purchase of content. Print is a commitment by the reader to pursue passions and interests that have value well beyond the price of subscription.
Texture Incentivizes Trial
Texture’s subscription model provides consumers the option to browse available magazine choices to find things they like, and things they didn’t know existed. Readers have the ability to encounter a selection of curated content and can choose how and what they consume.
According to Texture CEO John Loughlin, the average new subscriber typically reads four to six of the 200 titles offered per month. But within six months, that number spikes to eight to 12, and overall time spent in the app expands by 60 percent.
This opens the door for magazines to acquire new subscribers, some of whom may not have any previous exposure to the brand. Texture should help print publishers expand their subscriber bases, further accelerating the pursuit of direct monetization. Texture stands to be another beacon for the publishing industry to pursue quality.
What Should Marketing Take Away?
Print, more than any other medium, may hold the most potential for relationship marketing; however, most marketers may miss seeing this because they’re stuck in an advertising mindset, thinking first to violate the reader’s space in order to derive value from the medium.
That misses the point entirely.
As the print-publishing business doubles-down on quality content, relying less on advertising revenue, and as marketers ratchet up their investments in content, it is now time that marketers rethink their relationship with print. Print may be the best medium for brands to sustain the attention from their best audiences to drive brand loyalty.